L&HIllinoishard
Which of the following transactions is NOT considered a replacement under 50 Ill. Adm. Code 917 and therefore does not trigger the regulation's Notice and conservation requirements?
Application of dividends from an existing policy to purchase paid-up additions under that same contract
BA new individual term policy purchased with proceeds from the surrender of an existing whole life policy
CUse of an existing policy's cash value through a financed-purchase arrangement to fund premium on a new policy with another insurer
DSurrender of a deferred annuity to fund a new immediate annuity with a different carrier
Why this is the answer
Part 917 excludes from its definition of replacement transactions that simply enhance an existing policy with the same insurer — including the application of dividends to purchase paid-up additions under the same contract. Surrender-and-buy transactions, financed-purchase arrangements involving cash values from an existing contract, and annuity-to-annuity surrenders are all replacements that trigger the full notice, conservation, and free-look process.
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