Disclosure, replacement, and sales-practice rules for variable products.
This is where many variable-contract questions become easier to solve. Once the product mechanics are understood, the exam usually shifts to a customer-protection question: was the contract really appropriate, were the costs and limitations explained, and did the representative handle replacements or exchanges responsibly?
| Review area | What the representative should test |
|---|---|
| time horizon | can the customer reasonably hold through surrender periods and long accumulation goals? |
| liquidity need | will the customer need near-term access that conflicts with contract structure? |
| tax status | does tax deferral add real value for this customer? |
| existing contract | if replacing, is the change materially better after costs, surrender charges, and new features are compared? |
| disclosure | were fees, riders, market risk, and payout limits explained clearly? |
A representative focuses on the tax-deferral or death-benefit label and ignores the customer’s shorter horizon, lower risk tolerance, or existing suitable contract. Series 6 treats that as weak recommendation logic even if the product itself is legitimate.