Minnesota Life Insurance License Practice Exam

Which of the following would be considered prohibited advertising?

1. Comparative advertising showing premium differences

2. Advertising that uses the MN Life and Health Insurance Guaranty Association

3. Advertisements that promise guaranteed returns

4. Advertisements featuring customer testimonials

The correct answer is: Advertising that uses the MN Life and Health Insurance Guaranty Association

In the realm of insurance advertising, the use of certain organizational seals or names can create misleading impressions if not used appropriately. Advertising that utilizes the name or branding of the Minnesota Life and Health Insurance Guaranty Association is prohibited because it could imply an endorsement or guarantee that may not actually exist. This association provides a safety net for policyholders if an insurance company fails, but referencing it in advertising could mislead consumers regarding the security or quality of the specific policies being sold. Other forms of advertising mentioned in the options can be permissible under specific regulations and guidelines in the insurance industry. For instance, comparative advertising may highlight differences in premiums as a way to inform consumers. Additionally, while advertisements promising guaranteed returns may require careful wording to align with legal compliance, they can still be within bounds if presented transparently. Customer testimonials can serve as valid marketing tools, provided they are truthful and not misleading, aligning with ethical advertising standards. Thus, the advertising that involves the Guaranty Association stands out as the most problematic and directly misrepresentative option.