Life Insurance Basics
What is life insurance churning?
Life insurance churning is the illegal practice of replacing an existing life insurance policy with a new policy from the same company, primarily to generate a new commission for the agent, when the replacement is not in the policyholder's best interest. Churning is prohibited in all states.
Key Points
- Churning: illegal practice of replacing a policy with a new policy from the same company
- Primarily to generate a new commission for the agent
- Prohibited in all states
- Replacement must be in the policyholder's best interest
- Report suspected churning to your state insurance department