"Advertising Guidelines"

[TomZack]

I am looking at a major Life insurance carrier's advertising guidelines and it says:

A life insurance policy cannot billed as an "investment", "investment plan", "savings plan", "savings", "retirement plan", or "retirement vehicle".

As I am considering doing some advertising....

and having read Ben Feldman's books where he did just that - label policies as "retirement plans" or something similar, I guess the rules have changed since those days.

But....there IS a savings component to cash value policies, so I don't really understand why you cannot say that in advertising/marketing.

Any thoughts on this?

Also...

Do you put "Insurance agent" on your biz card, etc?

Or do you use something more generic like Independent broker or agent?

or Financial consultant, etc?

I am just licensed as Life & Health currently, so I know there are certain titles/terminology I cannot use.

I am attached to a group that does everything in financial planning and retirement planning, but can market myself individually.

Thoughts?

 

[DHK]

Are you advertising a policy (which would require pre-approval from the company) or are you advertising your planning services/strategies?

Remember that all advertising must be based on the consumer's understanding.

What is an investment? It is a security - according to the understanding of a consumer. We know that it can really be anything purchased for the intention of appreciating in value or for income purposes (like real estate), but people think stocks, bonds, mutual funds most often.

What is a retirement plan? It is an IRS qualified plan - according to the understanding of a consumer. They think 401(k), 403(b), or IRA.

What is a savings plan? It is a bank account - according to the understanding of a consumer.

I doubt Ben Feldman placed ads in the newspaper or created flyers for the mass public. Ben Feldman created direct mail pieces and custom proposals for individuals (business owners). He studied their Dunn & Bradstreet reports, discovered a problem that he could solve using life insurance, then pursued them (made cold-calls) to make sure they learned about it from him.

Maybe we need to re-remember what an 'advertisement' IS? It is a written or spoken piece that is sent or presented to more than 25 "retail investors". Well, that's FINRA's definition and you'd better believe that NAIC and insurance companies follow suit:
FINRA.org

My title is Chartered Financial Consultant. It also happens to be a designation that I hold. I do insurance and financial planning. Note that "financial planning" is not a regulated term, but some companies tend to think it is because of the CFP board.

Keep your advertising about YOU, your COMPANY/AGENCY, and your services NOT about "policies". That's how I draw the line.


There is no problem talking about how the IRS would treat loans taken from a life insurance policy during retirement years. You may be able to call it a 'retirement strategy' with an individual client, but you shouldn't do a mass advertisement talking about life insurance as a retirement plan when it is not an IRS qualified plan.

I hope this helps.

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Oh, I also stay away from quoting any rates - either premiums or % you could earn with a cash value policy too.

 

[TomZack]

Thanks for the thoughts, DHK.

Yes, that's true, Mr. Feldman probably didn't advertise like that. But he would label his "solutions" that contained cash value life as such. Or so it reads.

Yes, no plans for quoting specific policies or rates, but I can't quite see the harm in mentioning savings as a component of CV life. It sounds like it's better not to.

Thanks for the thoughtful response.

TZ

 

[Matthew King]

It is exactly as DHK says. It's all about the consumer. If you say "savings and investment" it drives the consumer to believe that's what it is when it's not. It's insurance. That's why you use the term it builds cash value. For instance, I have IUL. It builds cash value, but it wasn't dollar for dollar during the first year. I could have put $5,000 in, but the cash value would not have been $5,000.

In savings plan, you put $5,000 in, and it's $5,000. See his point?

 

[VolAgent]

If you want a simple answer, I have one for you.

Insurance regulations say that you cannot refer to cash value life insurance as savings or investment. It doesn't have to make sense to you, it simply is. There are a lot of other reasons, some of which were given here. But ultimately the people who regulate your license say you can't, so you can't.

 

[Matthew King]

If you want a simple answer, I have one for you.

Insurance regulations say that you cannot refer to cash value life insurance as savings or investment. It doesn't have to make sense to you, it simply is. There are a lot of other reasons, some of which were given here. But ultimately the people who regulate your license say you can't, so you can't.

Also a good answer! You can't because you can't!

 

[VolAgent]

Also a good answer! You can't because you can't!

While it is great to challenge the rules at times, with regulators don't. Sometimes you just have to accept the rules if you want to play in the sandbox. If you don't like it, create your own sandbox.

 

[TomZack]

Got it. No savings

 

[jboussea]

I didn't know that you can't use the word savings.. is that just for advertising?

Anyway .. Advertising is way too short for you to get into all that. Keep it simple with the ads. Cash value life doesn't seem like a good product to advertise IMO.. I may be wrong, some may have done it well but I wouldn't try it.

 

[rgfii]

Cash Value Life Insurance, which is part of the tax code of 770, Is known as a LONG TERM asset.