New Jersey Life Insurance Exam Practice Question
A producer who encourages an insured to lapse one policy and buy a new one based on an incomplete comparison of the policies may be engaged in the act of
Correct Answer: D
Rationale: Engaging a client to lapse one insurance policy for another based on incomplete comparisons reflects a deceptive practice known as twisting. This act misleads the insured about the benefits of the new policy, often to secure a commission for the producer.
Option A, misrepresentation, involves providing false information, which is not the primary issue here. Option B, rebating, refers to offering a portion of the premium as an incentive, which is unrelated to policy comparisons. Option C, tampering, implies altering documents or information, which is not the focus of this scenario. Thus, twisting accurately describes the unethical encouragement of policy replacement.
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