Question

K is running a funeral home that markets preneed life insurance. Which of the following must K consider under advertising regulations?

A: K must establish in all advertising materials that the preneed plan is a life policy
B: K must inform all representatives of the deceased that they have a right to change their preneed provider if they feel necessary
C: K must advertise that if the preneed benefit exceeds the funeral cost, a contingent beneficiary will receive the excess benefit
D: All of the Above

Answer 1

K must comply with specific advertising regulations for preneed life insurance policies, which include establishing the nature of the plan, informing representatives about their rights, and detailing the handling of excess benefits.

Step-by-step explanation:

When K is running a funeral home that markets preneed life insurance, under advertising regulations, several considerations must be taken into account:

• K must establish in all advertising materials that the preneed plan is a life policy. This is to ensure transparency and clarity for consumers regarding the nature of the product being offered.
• K must inform all representatives of the deceased that they have a right to change their preneed provider if they believe it is necessary, to uphold consumer rights and provide flexibility in their choices.
• Advertising must convey that if the preneed benefit exceeds the funeral cost, a contingent beneficiary will receive the excess funds. This gives potential customers details on the policy's terms and the management of surplus benefits.

In summary, K must comply with all of the above considerations as per advertising regulations for preneed life insurance policies.