New State Regulated Life Insurance Program: A Bold-Face Lie [2024]

What is the new state-regulated life insurance program you keep reading about? Is it a legitimate plan?

Let’s be clear: there is no truth to the existence of a state-regulated life insurance program.

These mailers are not affiliated to or endorsed by any government entity and represent a deceptive marketing strategy utilized by insurance companies to increase their sales.

If you respond to these cards, you’ll find a life insurance agent knocking on your door. 

While the phrasing of these mailers may vary slightly from place to place, they all essentially come with the same purpose. Here are some of the most popularly used subject lines:

Local agents use these life insurance mailers as prospecting tools to generate life or burial insurance leads and sales. If you were to respond to one, the following situations are likely to take place:

These leads are frequently distributed to multiple agents for months or even years. As a result, you start receiving repeated calls from many agents trying to sell you life insurance for final expenses. 

Choose kindness.

You never know what battles people may be fighting.

Does The Government sponsor these?

For those navigating the maze of life insurance options, it’s essential to be wary of misleading information and instead consider reputable sources like Open Care life insurance when evaluating final expense plans for seniors.

None of these offers are associated with any government agency or state-run program. At the bottom of each mailer, you will most likely find a fine print disclaimer stating that it is not linked with any government agency.

“Is there any government entity that covers funeral expenses?” This is one of the most frequently asked questions among policy buyers.

Well, the truth is that no state or federal benefit offers thousands of dollars for a person’s funeral, but protection from high funeral costs can be sought through other means.

The only money provided for end-of-life expenses by any government entity is $255 from Social Security.

That leads us to the question, “Why do these insurance companies use the term ‘state-regulated insurance’ when it’s not true?”

It doesn’t take a rocket scientist to figure it out. These are deceptive marketing strategies used by insurance providers to gain the trust of prospective buyers and make them believe the government is offering such benefits.  

The truth is that most individuals have a high level of faith in the government. It’s doubtful that a government entity will misuse your identity or steal your money. When you call the IRS or Social Security, don’t hesitate to give them your SSN since you know it’ll be safe.

Even though government entities have their share of flaws, you can be confident that they won’t trap you in some illegal scam. The level of trust people have in the government makes all the difference. 

As a result, the whole perception of government-sponsored insurance plans dramatically increases the number of sales leads. While it’s never an honest way to sell policies, most providers reap the benefits quickly.

What does the term ‘State-Regulated’ actually mean?

Simply put, the term ‘state-regulated’ commonly used in these mailers is just a half-truth and merely a play on words.

Here’s how we can explain it:

All insurance, including cash value life insurance, is governed at the state level. All insurance companies require prior approval from your state’s insurance department to sell an insurance product legally in the concerned state. 

Details related to the rates, application, and other financial information must be presented to the government during approval. The insurance department will approve the product if and when it meets the prescribed requirements.  

This is the origin of the term ‘state-regulated’ that you often find in these mailers. 

While technically not a lie, insurance companies twist this fact to mislead people into thinking that some government entity manages the offered program. Rest assured that nobody at any level of the government knows about this “offer.” 

Check Out: The Impact of Smoking on Life Insurance Policies

Choose kindness.

You never know what battles people may be fighting.

Your State Does Not Matter

You will likely find specific references to your state in several of these mailers.

They may include catchy subject lines, such as:

  • 2022 benefit information for North Carolina citizens only
  • Benefits information for Mississippi citizens only
  • Texas state-regulated life insurance program
  • Or Virginia, Texas, or any other state…

Such deceptive marketing strategies are often characterized by changing the state’s name for each bulk mailing campaign. This further enhances the disguise and improves the possibility of developing trust among people that state authorities regulate these programs. 

It doesn’t even matter where you live. Remember that none of these advertisements that include the name of your state are affiliated to or endorsed by your state government. 

These “benefits” are not limited to the state to which the policy is mailed. Most life insurance policies are available in almost all states, with certain exceptions.

Mentioning the state’s name is just another deceptive mechanism providers use to make people believe a particular state government explicitly offers it

Are These Mailings Legitimate Or Scams?

While these mailers are dishonest and unethical business practices, they are not a scam.

Let’s take a look at both sides of the equation:

If you return one of these, you will be bombarded with multiple insurance agents attempting to sell you life insurance.

Since they’ll be fully licensed agents, you don’t necessarily need to be worried about your identity or money being stolen. 

That, however, is just one way of looking at it. You must ask yourself: ‘Do you want to do business with an insurance company that uses deceptive advertising techniques to mislead customers into buying plans?