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Are life insurance advertisements truth or fiction?

I have recently been hearing a lot of life insurance advertisements on the radio. While I have a great faculty for tuning out most radio and TV ads, being that I’m in the life insurance business, I must say ads about life insurance pique my interest every time. It was a well-produced ad for a reputable company, but one of the claims made by the announcer really got my attention, as I didn’t believe it to be true.

When I got to work this morning, I decided to do a little research on Google to see if this “untruth” was duplicated by other companies. Not only was this statement used by several companies, but I found other statements that were also misrepresentations. Not knowing the intentions of those writing these fictitious statements, I will give them the benefit of the doubt and suggest that they are either misinformed or not editing what others might have written.

Here are some of the offending statements, starting with the one I heard on the radio:

Save up to 70% on Life Insurance.


This is one I see on a lot of websites, in this exact language. I believe this one has been around since the beginning of term life insurance sales on the Internet and was actually true at the time. Term life insurance rates dropped significantly between the mid-’90s and the early part of the following decade so, yes, you are saving 70% from 1995 prices. However, someone reading (or hearing this statement might be misled into believing that this company’s rates are 70% lower than most recent prices or those of other companies. There are few variations of this one, including:

Call now and save up to 70% on your term life policy compared to the same coverage from other carriers.

Because of the competitive nature of the business,  when you compare term life insurance quotes online, you will find that there is only a slight difference in price for the same coverage from different carriers. You would be hard-pressed to find a quote that was 70% less than most others presented.

On average, you’ll save over 25% on your life insurance.


Seriously? 25% of what? Compared to other websites or brokers, from the same coverage from other carriers, as suggested above?

Save up to 75% when you buy online term life insurance.

Wow, this is even better than 70%. It also suggests that buying term life insurance online will save you money, I’m assuming from the cost of buying from a brick and mortar establishment. The truth is, while buying online might be more convenient, it is not less expensive than buying it from your local agent who represents many insurance companies.

Save up to 80% when you compare.

A variation on the same theme, but misleading nonetheless. I would have to ask, “80% from what?” How much would I save if I didn’t compare?

Apply online and save hundreds.

Depending on the cost, this could be 25%, 70% or 80%. I think I’ll take my chances and go with the 80% savings since that seems better. However, I don’t have to compare to get these savings. What’s a life insurance buyer to do?
Here are a few more of my favorites:

We only quote guaranteed rates from highly rated insurance companies.

I can cut this one some slack, as they probably mean that they only quote premiums that are guaranteed for the length of the term period. However, to an uninformed eye, it appears that the quoted rates are guaranteed, which is not possible. Quotes are estimates, at best, and might differ from the rates the insurance company presents upon the completion of underwriting.

Barring complicating factors, the final premium should be the same as your quote.

This is quite a bold statement, as it stops just short of guaranteed rates. Again, quotes are an estimate and statements like this are an exaggeration of the truth.

Historically low term life insurance rates or Rates are at an all-time low.

As I mentioned earlier, while these statements might have been true at one time, they are now false statements. Rates for term life insurance have been slowly increasing over the past few years, due to regulations requiring life insurance companies to reserve more capital for each policy they sell. As a result, companies have either increased premiums or, stopped selling some policies (as in the case of some 30-year term policies).

I have not mentioned the names of companies making these statements, as I don’t believe most of them are intentionally trying to mislead the public. However, I hope some of them read this post and recognize one of the blurbs above as their own and, consequently clean up the language that does mislead.

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Richard Reich
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