South Carolina Life and Health Practice Exam

When a life insurance policy is issued to replace another, which information does NOT need to be provided to the purchaser at or before policy delivery?

1. The replacing insurer's financial statements

2. A summary of policy benefits

3. Coverage limits of the new policy

4. Disclosure of policy exclusions

The correct answer is: The replacing insurer's financial statements

When a life insurance policy is issued to replace another, it is essential for the purchaser to receive clear and comprehensive information about the new policy to make informed decisions. Among the information that is typically required to be provided at or before policy delivery are a summary of policy benefits, the coverage limits of the new policy, and any exclusions that may apply. The financial statements of the replacing insurer, while important for assessing the stability and reliability of the insurer, are not legally required to be provided directly to the purchaser as part of the replacement process. Instead, the focus is placed on practical aspects of the policy that affect the customer's immediate understanding of their coverage—namely, the specifics of benefits, limits, and exclusions. This helps ensure that the buyer fully grasps the implications of the new policy in comparison to what they are replacing, promoting informed choices rather than overwhelming them with financial statistics.