Pearson VUE Life Insurance Practice Exam

A producer can be found guilty of misrepresentation if they tell an insured that the deductible is less than it actually is. This scenario represents a clear instance of providing false information, which can mislead the policyholder regarding their financial responsibility in the event of a claim. Misrepresentation occurs when a producer provides untrue information with the intention of deceiving another party, which in this case would result in a misunderstanding of the actual terms and conditions of the insurance policy.

In the context of the other options, providing accurate coverage details and clearly explaining benefits are both actions that promote transparency and understanding, thus not falling under misrepresentation. Similarly, not disclosing commission rates, while potentially unethical or non-compliant depending on regulations, does not constitute misrepresentation of policy terms or benefits, making it distinct from the deceptive act of misstating a deductible.