State RegulationsNY specificDifficulty 1/5
A licensed life settlement broker's New York radio spot promotes the purchase of a new life insurance policy and promises listeners 'free coverage — no cost to you.' Under the New York Insurance Law, this advertisement is:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why D is correct
Under N.Y. Ins. Law §7809, no life settlement provider, intermediary, broker, or any person acting on their behalf may use the words 'free', 'no cost', or words of similar import in the marketing, advertising, soliciting or otherwise promoting of the purchase of a policy. A premium-financed policy is not free — the loan must be repaid — and the ban is categorical rather than dependent on who is named in the spot. Failure to comply is a defined violation under the Insurance Law's unfair trade practices provisions.
Why the other options are wrong
- A) Literal accuracy does not save the advertisement; the prohibited words themselves may not be used to promote policy purchases.
- B) Identifying the lender in the same advertisement does not cure the use of banned wording.
- C) The prohibition has nothing to do with whether a specific insurer is mentioned in the advertisement.
Memory hook
In life settlement advertising, 'free' and 'no cost' are banned words when promoting policy purchases.