State RegulationsCO specificDifficulty 1/5
A life insurance advertisement used in Boulder presents projected dividends as if they were guaranteed and overstates the policy's benefits. Under standards enforced by the Colorado Division of Insurance, the advertisement is objectionable primarily because it is:
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Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Advertising standards administered by the Colorado Division of Insurance require that life insurance advertisements be truthful and not misleading. Presenting projections as guarantees and overstating benefits creates a false impression of the policy, which is precisely the type of misleading marketing the Division's rules for life insurance sales and advertising, including Reg. 1-2-18, are designed to prohibit.
Why the other options are wrong
- A) Targeting prospective applicants is the normal purpose of advertising and is not itself objectionable.
- B) Agencies routinely distribute insurer advertisements; who distributes the piece does not cure misleading content.
- C) Whether an advertisement includes a photograph is irrelevant; the standard is that the content be truthful and not misleading.
Memory hook
Projections are hopes, not guarantees — ads must say so.