What does the act of inducement/twisting refer to in insurance?

Inducement or twisting in the context of insurance refers to the process of persuading an insured individual to either lapse or replace their existing insurance policy with a new one. This often implies that an agent or broker is encouraging a customer to forgo their current coverage in favor of another product, typically by highlighting perceived benefits, discounts, or incentives associated with the new policy while potentially downplaying or misrepresenting the advantages of the existing policy.

This practice is closely monitored and regulated because it can lead to unnecessary financial loss for the insured, especially if the new policy comes with higher premiums, reduced coverage, or losses in policy benefits from the original policy, such as lapse of benefits or loss of accumulated cash value. It's crucial for agents and brokers to adhere to ethical standards and provide clients with transparent and accurate information regarding all options available to them.