What is twisting in life insurance?
Understand the Problem
The question is asking about the concept of 'twisting' in the context of life insurance. Twisting refers to the unethical practice of persuading a policyholder to switch from one insurance policy to another for the benefit of the agent rather than the policyholder. This often involves misrepresentation or failure to fully disclose information about the new policy.
Answer
Twisting in life insurance is inducing a policyholder to replace an existing policy with a new one using misrepresentations.
Twisting in life insurance refers to the practice where an insurance agent induces a policyholder to surrender or replace an existing policy with a new one from a different carrier based on misrepresentations or incomplete comparisons of the benefits and disadvantages of the policies.
Answer for screen readers
Twisting in life insurance refers to the practice where an insurance agent induces a policyholder to surrender or replace an existing policy with a new one from a different carrier based on misrepresentations or incomplete comparisons of the benefits and disadvantages of the policies.
More Information
Twisting usually involves misleading information to convince a policyholder that the new policy offers better or equivalent benefits, often to the policyholder's detriment.
Tips
Common mistakes include confusing twisting with churning, which involves replacing a policy within the same company for a commission.
Sources
- Twisting - IRMI Insurance Definitions - irmi.com
- Insurance 101: Churning and Twisting - AgentSync - agentsync.io
- Twisting - American Safety Council - course.uceusa.com
