Life Insurance Advertising

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.