Which practice involves misrepresenting a policy to persuade a policy owner to surrender their current insurance?

The practice that involves misrepresenting a policy to persuade a policy owner to surrender their current insurance is known as twisting. This unethical behavior typically occurs when an agent informs a policyholder that a new policy is superior to their current one, often exaggerating the benefits or downplaying the drawbacks of the new policy while providing misleading information about the existing coverage. The intent behind twisting is to induce the policyholder to replace their old policy with a new one, which might not actually provide better or more suitable coverage.

Twisting is particularly concerning because it undermines the trust inherent in the agent-client relationship and can place the policyholder in a worse financial situation. In contrast, the other practices mentioned have distinct definitions, such as churning, which involves the same agent convincing a client to exchange one policy for another to generate commissions without a clear benefit to the insured. Understanding these terms is critical for recognizing ethical versus unethical practices in the insurance industry.