Florida Health Insurance Terms:
"Twisting"

Define: "Twisting"

The illegal practice of inducing a policy owner to replace a policy by providing inaccurate, incomplete or misleading information.

More Examples of Twisting

"By definition, twisting occurs when an agent, for the purposes of generating a commission, persuades a client to lapse, surrender, or otherwise terminate an insurance product and replace it with another product that provides little or no economic benefit to the client. Often, the accumulated cash value of an older policy is used to mask the true cost of the new policy, allowing the agent to provide a favorable (but misleading) comparison. In the insurance business, “churning” often is used interchangeably with twisting, though churning can refer more broadly to excessive trading or financial product replacement for the purpose of generating commissions.

“Vanishing premiums” refers to inflated claims about the length of time a policyholder will need to pay premiums, such as “you only have to pay premiums for seven years, and then the policy will pay for itself.” Unfortunately, many consumers who were sold vanishing premium policies in the 1980s and 1990s later found they needed to cough up more premium dollars to keep their policies from lapsing.

These practices not only are misleading and unethical, but also are becoming illegal. There are valid reasons for replacing a policy, such as changes in your financial situation or financial goals and objectives or a true, relevant benefit with the new policy. "

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