Which statement about life insurance code and ethics is accurate?

The correct choice emphasizes that acts of fair discrimination are permitted under certain circumstances in life insurance codes and ethical guidelines. Fair discrimination refers to the practice of differentiating between individuals in the underwriting process based on logical and reasonable criteria, such as risk factors or health status, rather than irrelevant factors like race, gender, or other discriminatory attributes. This principle acknowledges that not all individuals present the same level of risk and allows insurers to assess and rate applicants in a way that is justifiable and based on relevant data.

The other choices do not align with the ethical standards set forth in life insurance practices. For instance, advertising insurers as members of guaranty associations can mislead consumers about the safety and reliability of those insurers since not all companies necessarily participate in or are backed by such associations. Offering free insurance as an inducement is prohibited as it can create unfair competition and lead to misrepresentation issues. Lastly, twisting, which refers to unethical practices where an agent persuades a client to replace a policy for the purpose of earning a commission, is not acceptable and can lead to legal consequences for the agent involved. Thus, the understanding of fair discrimination as a permitted practice is crucial for navigating the complexities of ethical and regulatory standards in life insurance.