Glossary

Twisting

Persuading someone to drop or replace an existing policy by misrepresenting or leaving out key facts, an unfair trade practice under state law.

Also called: insurance twisting

Twisting is the use of misleading statements or incomplete comparisons to induce a policyholder to lapse, surrender or borrow against an existing policy in order to buy a new one, usually from a different insurer. State unfair trade practices laws prohibit it, and regulators can fine agents or revoke their licenses. When the same thing happens within one insurer, it's usually called churning.

Typical tactics include exaggerating the new policy's projected returns, hiding its surrender charges or the fresh contestability and suicide periods, understating the old policy's guarantees or dividends, or failing to mention that the buyer is older and will pay more for the same coverage. Hypothetically, an agent who tells a retiree that her old whole life policy is "losing money" and moves its cash value into an indexed annuity, without disclosing a 10-year surrender schedule, may be twisting.

Not every policy replacement is twisting; a switch can serve the buyer when it's disclosed and compared honestly, which is why replacement rules require a signed notice and comparisons. If you're urged to switch, get an in-force illustration of the old policy and ask your current insurer for its view. See twisting and churning: replacement sales abuses and replacing a life insurance policy: when it makes sense.

Last reviewed October 4, 2026

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Related terms

Policy replacement Buying a new life policy or annuity while dropping, surrendering or borrowing heavily against an existing one, a sale states regulate closely. Churning Replacing a client's policy or annuity with a new one, often from the same insurer, mainly to earn fresh commissions rather than to help the client. Rebating Giving a customer part of an agent's commission or anything of value as an inducement to buy insurance, a practice most states prohibit. Producer The legal term for a person licensed by a state to sell, solicit or negotiate insurance, covering agents and brokers alike. Surrender charge A fee deducted from a policy's or annuity's value if you cancel or withdraw too much in its early years, usually shrinking each year. Suitability The requirement that an agent recommend an annuity or other product only after gathering enough information to judge that it fits the buyer.

Related guides

Replacing a life insurance policy: when it makes sense Replacing a policy can save money or fix a poor fit, but it restarts clocks and can cost you coverage. The NAIC replacement rules, the risks and a checklist. Twisting and churning: replacement sales abuses Twisting and churning are misleading replacement sales that benefit the seller. What the NAIC models require, warning signs and how to check a replacement.