Licensees must avoid engaging in the practice of 'tied selling.' The following is an example of tied selling: a) re-marketing of the insureds' coverages on expiry without their con... Licensees must avoid engaging in the practice of 'tied selling.' The following is an example of tied selling: a) re-marketing of the insureds' coverages on expiry without their consent. b) adding a warranty or condition to the insureds' policy without informing them. c) charging a fee on an individual policy of insurance in excess of the premium charged by the insurer. d) making the issuance of an insurance policy conditional on the purchase of another insurance policy.
Understand the Problem
The question is asking which of the options provided represents an example of 'tied selling' in the context of insurance advice. The user needs to identify the correct answer based on the definitions and practices associated with tied selling.
Answer
Making the issuance of an insurance policy conditional on the purchase of another insurance policy.
The final answer is: d) making the issuance of an insurance policy conditional on the purchase of another insurance policy.
Answer for screen readers
The final answer is: d) making the issuance of an insurance policy conditional on the purchase of another insurance policy.
More Information
Tied selling is illegal because it limits consumer choice by forcing them to buy products they may not want.
Tips
A common mistake is misunderstanding tied selling as just bundling products, but it's specifically about making one purchase conditional on another.
Sources
- Tied Selling: What it Means, How it Works, Example - Investopedia - investopedia.com
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