Life License Qualification Program (LLQP) Practice Exam

Which Unfair Trade Practice involves an agent suggesting that an insurance policy is like a share of stock?

1. Twisting

2. Intimidation

3. Misrepresentation

4. Sliding

The correct answer is: Misrepresentation

The scenario described refers to misrepresentation, which occurs when an agent provides false or misleading information about an insurance policy. In this case, suggesting that a policy is similar to a share of stock could mislead consumers regarding the nature, risks, or benefits associated with the policy. The fundamental purpose of misrepresentation is to create a false impression, which can influence a consumer's decision-making process, potentially leading them to enter into agreements under false pretenses. In this context, consumers are entitled to accurate and truthful information when making decisions about insurance products. When an agent presents insurance policies in a manner that distorts their true nature or benefits, it undermines consumer trust and can result in unfair advantages for the agent or the company, making misrepresentation a serious concern in the field of insurance.