California Life-Only & Accident and Health AgentCalifornia Law - GeneralMedium
An insurance agent is advertising a life insurance product. According to California regulations, which of the following is considered an unfair advertising practice?
- AStating that the policy is 'guaranteed renewable' if it truly is.
- BPromising 'free' insurance coverage without clearly disclosing that it requires the purchase of another product.
- CUsing a testimonial from a policyholder that accurately reflects their experience.
- DIncluding the agent's license number in the advertisement.
Show answer & explanationAnswer & explanation
Correct answer: B. Promising 'free' insurance coverage without clearly disclosing that it requires the purchase of another product.
Promising 'free' insurance when it's contingent on purchasing another product without clear disclosure is a deceptive and unfair advertising practice, as it misleads consumers about the true cost and conditions. Unfair advertising practices are strictly prohibited to protect consumers.
Why the other options are wrong
- A. Accurately stating policy features like 'guaranteed renewable' is permissible.
- C. Truthful and accurate testimonials are generally allowed in advertising.
- D. Including the agent's license number is often required or good practice, not an unfair practice.
Unfair Advertising Practices
Advertising methods that are deceptive, misleading, or misrepresent insurance products, benefits, or conditions to consumers.
- Prohibited by California Insurance Code.
- Aims to protect consumers from being misled.
- Includes misrepresentation, false promises, and incomplete comparisons.
Memory trick: Don't Be Unfair: Truth is Your Ad's Best Air.