Texas Life Agent Practice Exam

Which of the following is considered an unfair or deceptive act in the sale of a life insurance policy?

1. Providing incomplete policy details

2. All answer options are correct

3. Misleading comparisons to competitive policies

4. Failing to disclose commissions

The correct answer is: All answer options are correct

In the context of the sale of life insurance policies, an unfair or deceptive act encompasses a variety of practices that may mislead or misinform consumers. The choice that all answer options are correct highlights the understanding that multiple practices can contribute to an unfair sales environment. Providing incomplete policy details is problematic because consumers need comprehensive information to make informed decisions. When agents or insurers fail to provide all necessary details about a policy, it can lead to misunderstandings about coverage, exclusions, and limitations. This omission is seen as an attempt to manipulate or deceive potential buyers. Misleading comparisons to competitive policies constitutes another unfair practice because it can pressure consumers into making choices based on inaccurate or biased information. If an agent compares policies without providing accurate representation or omits key differences, it can result in consumers choosing a policy that may not truly fit their needs. Failing to disclose commissions is significant as well, since transparency about how agents are compensated is crucial for maintaining trust in the sales process. When agents do not disclose their commissions, it can create a conflict of interest, leading consumers to question whether the advice they receive is genuinely in their best interest. Thus, each of these actions—providing incomplete policy details, making misleading comparisons, and failing to disclose commissions—are considered