Illinois Life Producer State-designated Practice Exam

If a policyowner cancels an insurance policy within 90 days of issuance, when is the producer required to refund a portion of the fee?

1. Within 15 days

2. Within 30 days

3. Within 45 days

4. Within 60 days

The correct answer is: Within 30 days

When a policyowner cancels an insurance policy within 90 days of issuance, the law typically mandates that the producer must refund a portion of the premium within 30 days of the cancellation notice. This requirement ensures that consumers are protected and not left waiting unduly long for any refund. The prompt process following a cancellation is critical in maintaining trust in the insurance system and ensuring that policyholders are fairly treated, particularly in the early stages of a policy when they might still be evaluating its usefulness and affordability. Understanding this timeframe is essential for producers, who must not only know the legal requirements but also ensure that they communicate these effectively to their clients.