Maryland Life and Health Insurance License Practice Exam

Any advertisement that mentions a dollar amount must disclose which of the following?

1. The exceptions, reductions, and limitations affecting the basic provisions of the policy

2. The total amount of premiums paid by the policyholder

3. The number of claims paid in the previous year

4. The insurance company's history and ratings

The correct answer is: The exceptions, reductions, and limitations affecting the basic provisions of the policy

When an advertisement mentions a dollar amount related to an insurance policy, it is essential to disclose the exceptions, reductions, and limitations affecting the basic provisions of the policy. This requirement is in place to ensure transparency and help consumers understand the full scope of what the policy covers and any potential drawbacks that may not be obvious at first glance. By providing this information, consumers can make more informed decisions, avoiding any misunderstanding about what they are purchasing. This approach aligns with regulatory standards that prioritize consumer protection, ensuring that important details that could impact the value and efficacy of the insurance product are clearly communicated. Thus, proper disclosure helps build trust and clarity in the insurance process.