What Is Twisting In Insurance

What Is Twisting in Insurance? How to know that you’re getting twisted? What Can And Cannot Be Considered Insurance Twisting?

5 min read
By Prerna
What Is Twisting In Insurance
Photo by Headway / Unsplash

We want to strike a balance between a specific coverage level, a manageable deductible, and reasonable premiums when looking for insurance. We don't want to overpay for premiums or be stuck with an option that may cost more in the future. That is why, when it comes to choosing an insurance policy, we consult with an agent.

Unfortunately, some agents engage in the unethical practice of insurance twisting on occasion. As a result, it is critical to be aware of this practice to avoid becoming involved. Let's continue with the blog because we're here to provide detailed information about insurance twisting.

What Is Twisting in Insurance?

Whether you're about to purchase your first insurance policy or change the policies you already have, you'll seek advice from an insurance agent – which, depending on the latter's personality, could be the best experience of your life... or a total disaster.

Why is this so? Unfortunately, insurance agents have a lot of leeway in the insured-insurer relationship, and some of them aren't afraid to defraud their clients for personal gain. But let's get back to the topic at hand.

Insurance twisting occurs when an insurance agent intentionally persuades you to switch to a supposedly better insurance policy that would benefit only one party – the agent. You are duped into purchasing insurance policies that you do not require.

Agents rely on commissions to make a living, and the temptation can be too great. Insurance swindling is a form of fraud and, in some states, a crime. In this case, an insurer manipulates your policy by convincing you to replace your current insurance with insurance from a different company.

There appears to be no harm in having an agent suggest that you change your current policy if it is not providing you with what you require. It is considered a violation if they do not recommend a change in this scenario. However, the policy shift becomes unethical when they claim that the insurance policy you are twisting will provide financial benefits and advantages that do not exist. Though it can occur with any insurance, it is most commonly seen with life and health insurance.

How to know that you're getting twisted?

Typically, we review our existing policy only when a significant life event occurs, such as purchasing a new house and car, having a baby, or starting a new job. Consider it a red flag if an agent asks you to change your policy if there is no primary event.

Furthermore, premiums provide protection, and when dividends are high, you tend to have more coverage levels. It's good to replace your policy if you can get better coverage or the same coverage for lower premiums. However, if the tips are surprisingly soft and the agent makes numerous promises, it could be a case of insurance twisting.

Consider it unethical insurance twisting if, while comparing the existing policy to the policy they are selling, you feel that something is missing in the policy. Furthermore, an accurate agent will share the commission with his clients, but they will be hesitant to do something incorrectly. As a result, if anyone knows these things from the start, they can save themselves from such illegal acts.

What Can And Cannot Be Considered Insurance Twisting

Now that you know what twisting is, let's look at two examples to help you understand what isn't twisting:

  • Twisting: An agent advises you to drop your existing life insurance policy in favour of a cheaper term life insurance policy without informing you that you will have to forfeit the cash value of your current life insurance policy or pay taxes on it as a result of the change.
  • Not Twisting: An insurance agent suggests that you replace your current insurance coverage with a more expensive but broader policy.

It would be best if you never put your trust in insurance agents. Having second thoughts is a good thing, especially because unscrupulous agents may have more tricks up their sleeves than just insurance twisting.


You'd probably consult with your current agent first if you wanted to change your recent coverage, wouldn't you? Unfortunately, unscrupulous agents may resort to churning. Churning is very similar to insurance twisting, except that the same company dupes you in the former case.


On the other hand, insurance sliding is the most difficult because it involves addendums and riders, which are often the most overlooked aspects of insurance.

Insurance sliding occurs when an agent intentionally fails to disclose all aspects of the coverage – including addendums and riders – resulting in a higher insurance premium or when an agent sells a rider that provides no additional coverage.

Sliding would occur if you were not informed of the increase in premiums or did not authorize the addendums and riders.

Protect Yourself Against Insurance Agents' Tricks

Most states have anti-twisting legislation in place. For example, life insurance replacement requirements endorsed by the National Association of Insurance Commissioners (NAIC) are widely adopted. Still, the definitions and terms about insurance twisting are so ambiguous that it is frequently unreasonably tricky, if not impossible, to bring unscrupulous agents to justice. As a result, you must protect yourself on your own, which you can do if you are armed with common sense and the following checklist:

You can protect yourself from insurance swindling by focusing on a few key factors when you are uncomfortable with your agent's strange behaviour, such as forcing you to change your policy. In such cases, request more information. Consider it reasonable if you obtain all of the details because they know what they are selling. They will inform you of all the benefits and drawbacks of the policy selection process. Also, tell them that you require additional time to consider the policy change and adequately review the disclosure statements. If the agent is unwilling to provide you with the information in writing and is reluctant to give you adequate time, this is a red flag for you.

  1. Make sure you're comfortable with the agent. If you're feeling overwhelmed by the amount of information and the agent's language, there's a good chance they're trying to sway you. A direct and pushy hard sell in the insurance industry is regarded as a poor sales technique.
  2. Slowly peruse all the details of the proposed insurance. It may take some time to grasp the policy's nuances, but a good agent is also an educator. Regardless of how many you've asked, any signs of annoyance or unclear answers to your questions would be a huge red flag.
  3. Look for the right balance between coverage level, premium, and deductible. Consider all of the benefits and drawbacks of the coverage, and read the disclosure statement thoroughly. This is all about striking the right balance. You would benefit from switching to a more coverage policy while maintaining the same premium and deductible. On the other hand, an unreasonably good offer could be a ruse.

The Gut Instinct

As absurd as it may sound, it may be a good idea to listen to your gut instinct in addition to being educated. Most insurance codes of conduct are based on natural law, which propagates intrinsic human values and makes the most customer-friendly behaviour the only natural and logical one. In other words, if your gut instinct tells you otherwise, it may be best to double-check, postpone, or even avoid the transaction.