What is the act of unlawfully inducing a policyowner to replace an existing life insurance policy with a new one known as?

The act of unlawfully inducing a policyowner to replace an existing life insurance policy with a new one is known as twisting. This practice involves misrepresenting the advantages of a new policy or downplaying the benefits of the existing policy to convince the policyholder to make a switch. Twisting is unethical and often illegal, as it can lead to financial losses for the policyholder due to surrender charges, loss of benefits, and interrupted coverage.

In the context of insurance practices, twisting is particularly concerning because it undermines trust between clients and insurance agents. Agents engaging in this practice aim to generate new commissions without regard for the welfare of the policyholder.

Rebating refers to offering something of value to a client as an incentive to purchase a policy, which can also be illegal in many jurisdictions, but it does not involve replacing policies. Churning is similar in that it pertains to the act of convincing a client to replace a policy, but it usually involves a situation where an agent encourages policy reissues without a valid reason, often to earn commissions unfairly rather than solely to change policies. Defamation concerns damaging someone's reputation, which does not pertain to the replacement of insurance policies.