Questions to Ask:
A Shopper's Guide to Life Insurance Advertisements
Is the person selling the product a properly licensed and appointed agent or representative?
Does the material use terms that are clearly defined for you?
- Tax-deferred does not mean tax free.
- What tax - - state, local, federal, or estate?
- Who is taxed - - insured, beneficiary?
- Dividends are declared by the company's Board of Directors: they are not guaranteed.
Is the cost of the insurance protection clearly and concisely stated?
Is incomplete information provided in what is presented to you?
Examples are illustrations that show:
- How much a consumer pays, but not how much coverage is provided.
- How much money is accumulated, but not how it is accumulated.
- Maximum benefits, but not how one receives maximum benefits.
- Projections based on current interest earnings or dividend accumulations (which are subject to change), without including figures based on guaranteed elements.
- Cash values, without noting applicable surrender charges.
How is the coverage provided and are there any restrictions?
- Materials provided really explain a combination of policies and riders.
- Evaluate by looking at individual policy materials.
Does the advertisement rely on puffery, buzz words, or opinions to convey its message?
- Look for helpful information.
- Rely on facts, not advertising hype.
What manner is used to contact prospective customers?
- Investment-type material.
- Cold leads where the agent has no prior contact with customer.
- Referrals.
Call the Department of Insurance when . . .
- you have questions regarding policy terms.
- you are not sure what the advertisements are promoting.
- you do not feel comfortable with the sales process.
- you want to check if the sales person is properly licensed and appointed.
