Certified Financial Consultant (CFC) Practice Exam

Which of the following is a generic consumer publication that explains life insurance policies in general terms to help applicants make educated decisions?

1. Insurance Binder

2. Buyer's guide

3. Policy Summary

4. Insurance Report

The correct answer is: Buyer's guide

A generic consumer publication that explains life insurance policies in general terms is known as a buyer's guide. This type of document is specifically designed to educate consumers about the different types of life insurance available, along with the important features and benefits of various policies. The primary goal of a buyer's guide is to empower individuals to make informed decisions regarding their insurance needs by presenting information in a clear and accessible manner. A buyer's guide is particularly useful for those who may not have a background in insurance, as it demystifies complex concepts and terminology that are often used in policy documents. By providing a straightforward overview of life insurance options, it helps applicants understand the differences between policy types, such as whole life, term life, and universal life, along with considerations like premiums, coverage amounts, and riders. Other options listed serve different purposes: an insurance binder is a temporary document that provides proof of insurance coverage until a formal policy is issued; a policy summary is a brief description of features and benefits specific to a given policy; and an insurance report typically contains more detailed analysis or data regarding insurance coverage or claims, rather than serving as an educational tool for consumers.