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1.11.3 Churning

Churning is slightly different and is called internal replacement. It is the practice of inducing a person to drop their existing policy to buy another policy; however, it is within the same company and usually with the same producer who sold the original policy. Churning typically takes place when policy values are used to purchase another policy with the same insurer for the sole purpose of earning additional premiums or commissions.

The agent bears the burden of proving a policy replacement is in the client's best interest.

Ordinarily speaking, replacing a policy is not usually in the client's best interest due to the following factors:

Following are some excellent guidelines and questions to reconsider when contemplating policy replacement.