Although the words "deceptive" and "advertising" are considered by many to be synonyms, there are certain industry standards that should be upheld for the good of the public. While mild exaggerations such as "the best" or "the brightest" are widely accepted, blatant Lying is usually frowned upon. For example, it seems obvious that one should not advertise toothpaste as a cure for the common cold, nor life Insurance as a retirement savings policy. However, the latter is exactly what MetLife did in the early 1990s to the dismay of many befuddled nurses.

But just how bad was telling nurses that a whole life insurance policy was actually a retirement savings plan? After all, whole life policies do have an investment aspect to them. In addition to the basic death benefit of all life insurance policies there is also a "cash value" with whole life policies. This cash value is made up of one's premium payments minus "administrative fees and a profit margin plus the cost of death protection" (Orman, 70, 2004). What's left after all these deductions and fees are taken out goes into a tax-deferred savings account.

That's right, a savings account...that could also be referred to as "retirement savings." By focusing on this aspect of the policy, all MetLife did was shift the focus from the insurance aspect of the policy to the savings aspect of the policy. So, was this really lying, or did MetLife just do what most advertisers do and cater their sales presentations to the expected needs or a particular group? Sure they may have used words like "contributions" instead of "premiums," but this is just a matter of semantics. After all, no one was being physically harmed or endangered by purchasing this product, and they were getting additional insurance coverage, something most people need anyway, even if they don't realize it. So, again, should this have been considered "lying"?

Apparently the courts thought so, and MetLife was ordered to pay out upwards of $2 billion dollars in damages (Hartley, 2005). Still I'm not convinced that what MetLife did was entirely wrong. Yes, it was first and foremost an insurance policy that they were selling, but it was also a savings account that could potentially be used for retirement. One could argue that advertisers and sales representatives need to disclose the entirety of a product to potential buyers rather than just one or two aspects, but in reality, what advertisers do that?

Sources:

Hartley, Robert F. 2005. Management Mistakes and Successes. Eighth edition. Hoboken, NY. John Wiley & Sons Inc.

Orman, Suze. 2004. Ask Suze...About Insurance. Riverhead Books. New York.