If a producer sells a life insurance contract without providing an illustration, what must the applicant do?

When a producer sells a life insurance policy without providing an illustration, the applicant is required to sign a statement confirming that no illustration was provided. This requirement serves to ensure transparency in the insurance application process and protects the consumer by documenting that they were informed about the absence of an illustration, which typically details the benefits and values of the policy over time.

Illustrations are important because they help potential policyholders understand the projected growth of their policy, the costs involved, and the benefits they can expect based on certain assumptions. Without this tool, the applicant may not have a full understanding of what they are purchasing. Therefore, by signing the statement, the applicant acknowledges that they have been informed about the lack of an illustration, which is a necessary compliance measure for the producer.

The need for this statement also helps keep producers accountable for adhering to regulations designed to protect consumers in the insurance marketplace.