When it comes to life insurance, there are certain elements that must be included in all advertisements and announcements. It is essential that the true nature of the policy is clearly and prominently described. Insurers should also keep copies of all marketing material and records about how they were disseminated, as these may be inspected by the Department of Insurance. The length of time that documents must be kept varies by state, with Texas requiring a minimum of three years and Michigan requiring four or more. For the contract to be enforceable, the application for life insurance must accurately disclose the insured's past and current health conditions and high-risk activities.
It is wise to re-evaluate your life insurance needs annually or after major life events, such as divorce, marriage, the birth or adoption of a child, or major purchases, such as a home. Each state has extensive laws and guidelines for every aspect of insurance sales, fee making, underwriting, licensing agents, and paying claims. Agents (producers) should review the complete Accident and Sickness Insurance administrative advertising rules and the Life Insurance and Annuity Announcement administrative rules for further guidance. State regulators compare what insurers are doing and look for practices that deviate significantly from the norm in advertising and related practices. According to the National Association of Insurance Commissioners, any communication that is designed to make people interested in life insurance or annuities, or any particular company or producer, is considered advertising. A popular type of term life insurance only lasts for a certain period of time, such as 10 or 20 years.
During this time, the policyholder needs to offset the financial impact of lost income. Fortunately, advertising compliance standards for annuities and life products rely heavily on common sense and ethics. Burial or final expense insurance is a type of permanent life insurance that has a small death benefit. All life insurance policies offer a death benefit in exchange for paying premiums to the insurance provider over the life of the policy. For wealthy individuals, life insurance can provide additional strategic opportunities due to its tax advantages.
These include tax-deferred cash value growth, tax-free dividends and tax-free death benefits. Term life insurance only lasts for a certain period of time and pays a death benefit in the event that the policyholder dies before the term expires. Insurers are supposed to maintain strict control over ads that use their name, including ads placed by their agents. This means that almost anyone can get some kind of life insurance policy if they try hard enough and are willing to pay a high enough price or accept a perhaps less than ideal death benefit. Life insurance is most useful for people who need to provide security for their spouse, children or other family members in the event of death.
Depending on their short-term or long-term needs, it is important to consider whether temporary or permanent life insurance is the best option.
