A producer convinces a client to let an existing life policy lapse and buy a new one by grossly exaggerating the new policy's benefits and hiding its limitations. What is this practice?

Why D is correct

Twisting is inducing a policyholder to lapse, surrender, or replace existing insurance by misrepresenting the terms, benefits, or drawbacks of the new policy. Exaggerating benefits and concealing limitations to force a replacement is the textbook pattern. The New Jersey Department of Banking and Insurance enforces the prohibition on twisting as an unfair trade practice, because replacements driven by misrepresentation strip policyholders of coverage value they already earned.

Why the other options are wrong

• A) Rebating requires offering something of value not in the policy; the vice here is misrepresentation, not a gift or discount.
• B) Commingling concerns the handling of premium funds, which plays no part in this scenario.
• C) Coercion involves forcing a party's action through threats or pressure; the misconduct here is deceptive misrepresentation to induce a replacement.

Memory hook

Twisting = lying to force a swap — exaggerate the new, hide the fine print.