Montana State Life Insurance Exam 2025 – 400 Free Practice Questions to Pass the Exam

When a life insurance policy has a death benefit exceeding $5,000, the insurer is indeed required to notify the policy owner when there are changes to non-guaranteed elements of the policy. This requirement is in place to ensure transparency and keep the policy owner informed about how changes might affect the policy's performance, coverage, and future benefits. Non-guaranteed elements can include things like dividends, interest rates, and other factors that may affect the cash value or death benefit of the policy over time.

The obligation to notify policy owners helps ensure they are aware of any adjustments that may impact their policy's value or terms, enabling them to make informed decisions regarding their coverage. This is critical for maintaining trust and ensuring that policyholders understand their insurance product fully, particularly when the financial stakes, such as in the case of a higher death benefit, are significant.