900 N. Kings Highway, Cherry Hill, New Jersey 08034
856.667.4100 ·
215.563.0276 ·
Fax: 856.667.3652
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Financial Planning |
Insurance twisting is illegal. Twisting is the replacing of an old established
insurance policy with a new policy or investment with fewer benefits to the insured.
Despite the best efforts of reputable companies and the various state insurance commissioners, there are some sales
people who will take advantage of you. Unfortunately, a twister could be employed by a local agency, a bank, or
broker that you have trusted for years.
An unethical sales person is often very polished with their comparative information. They are also rather secretive
about certain aspects of what they are proposing you do, and, accordingly, they avoid giving you a signed, written
proposal. What is presented as an advantage to you in the new policy or investment is often not the case. The benefits
of the new policy or investment will be going to the sales person in the form of a commission.
It is almost impossible for the average person to determine whether a new policy or investment is better than the
one they have had for years. The twister will often state that what they are offering is so new that "your
other trusted advisors would not understand it." It is safe to say that since you are older than when you
bought the old policy, you will be paying more for less.
To assist individuals in evaluating proposals, the regulatory agencies have offered the following information:
The National Association of Insurance Commissioners has stated: "If replacement is suggested, the policyholder
should insist upon a written and signed proposal setting forth all the facts with respect to and comparing the
relative benefits of the two policies. The policyholder should feel free to submit this written statement both
to the company whose policy is proposed to be issued and to the company whose policy is to be replaced."
The Securities and Exchange Commission recognizes that an investment under their jurisdiction may be proposed as
an alternative to a current insurance policy. They have adopted a rule to require that policyholders be given a
full written description of the disadvantages, if any, of dropping an existing insurance policy.
If we can be of assistance, please contact us. We are here to
help with all your financial matters.
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