Illinois Life Producer State-designated Practice Exam

When replacing an existing life insurance policy, what must a producer submit as part of the application?

1. A signed statement by the applicant regarding the replacement

2. Proof of previous policy and coverage

3. Financial statement of the applicant

4. Authorization for credit check

The correct answer is: A signed statement by the applicant regarding the replacement

When replacing an existing life insurance policy, it is essential for the producer to submit a signed statement by the applicant regarding the replacement. This signed statement serves as a disclosure that informs the insurance company about the nature of the replacement. It ensures that the applicant is aware of the implications of replacing their current coverage, such as potential loss of benefits, change in premium costs, or other considerations that might affect their insurance needs. This requirement is aimed at protecting the applicant's interests and ensuring transparency in the replacement process. Other options, while they might be relevant in different contexts, do not specifically fulfill the necessary requirement mandated when a policy is being replaced. The signed statement provides clear consent and acknowledgment from the applicant, which is a critical element in the process of replacing an existing life insurance policy.