Question

The act of using misrepresentation to induce an insured person to terminate an existing policy and purchase a new policy is referred to as

1. twisting
2. subrogation
3. a life settlement
4.coercion

Answer 1

The unethical practice of misrepresenting facts to convince someone to cancel an insurance policy and purchase a new one is called twisting.

Step-by-step explanation:

The act of using misrepresentation to convince an insured person to cancel their existing policy and buy a new one is known as twisting. This unethical practice often involves deception or inaccurate information and is illegal in many jurisdictions. Insurance is a system for protecting individuals from financial loss, where policyholders make regular payments to an insurance company, which then compensates members who suffer financial damage from an incident covered by the policy. Issues such as moral hazard can arise, where people insured against a risk may take fewer precautions against it, knowing they have coverage.