Which statement about standard policy provisions is correct?

Which statement about standard policy provisions is correct?

• A. All life insurance contracts are required to contain the same standard policy provisions.
• B. Standard policy provisions apply mostly to group life insurance contracts.
• C. Insurance companies select the actual wording of the provisions, subject to state approval.
• D. Insurers may insert provisions that are different from state statutory provisions if the changes are to the insurer's advantage.

Answer: (C)

The key idea is how standard policy provisions are created and used. In life insurance, standard provisions are the required terms that must appear in policy forms, and their wording isn’t fixed nationally by the insurer alone. The insurance company drafts the actual language, but it must be filed with and approved by the state insurance department. Once the state approves the wording, that language becomes the standard provisions governing policies issued in that state. This ensures the provisions meet statutory requirements and protect consumers. So the correct statement reflects that process: insurers select the actual wording of the provisions, subject to state approval. The other choices don’t fit: there isn’t a single national standard that all policies share, standard provisions apply to individual policies (not just group), and insurers cannot insert beneficial language that isn’t approved by the state.

The key idea is how standard policy provisions are created and used. In life insurance, standard provisions are the required terms that must appear in policy forms, and their wording isn’t fixed nationally by the insurer alone. The insurance company drafts the actual language, but it must be filed with and approved by the state insurance department. Once the state approves the wording, that language becomes the standard provisions governing policies issued in that state. This ensures the provisions meet statutory requirements and protect consumers.

So the correct statement reflects that process: insurers select the actual wording of the provisions, subject to state approval. The other choices don’t fit: there isn’t a single national standard that all policies share, standard provisions apply to individual policies (not just group), and insurers cannot insert beneficial language that isn’t approved by the state.