State RegulationsFL specificDifficulty 2/5
An agent convinces a policyowner to surrender her existing life policy and buy a new one by falsely telling her the current policy will expire worthless when she retires and that the new policy costs less - when it actually costs more. Under Fla. Stat. 626.9541(1)(l),(aa), this is
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Under Fla. Stat. 626.9541(1)(l),(aa), twisting is inducing a policyowner to lapse, surrender, or replace an existing policy through misrepresentation. Both operative statements - the worthless-at-retirement claim and the false cost comparison - were lies aimed at dislodging existing coverage, which makes this twisting even though the customer signed the paperwork.
Why the other options are wrong
- B) Churning uses an existing policy's own cash values within that same policy; this was a surrender-and-replace across insurers.
- C) No part of the commission or premium was returned to the customer; a false price claim is misrepresentation, not rebating.
- D) A signature does not sanitize a sale procured by misrepresentation - the replacement was induced by lies.
Memory hook
Lie them out of their policy = twisting.