What term describes an unethical practice of misleading policyholders about expected dividends?

The term that best describes the unethical practice of misleading policyholders about expected dividends is misrepresentation. This involves providing false or misleading information about the nature of an insurance policy, particularly in regards to the benefits, such as dividends. Misrepresentation can occur through exaggeration or omission of key details that would influence a policyholder's decision, ultimately undermining their ability to make informed choices about their insurance coverage.

In the context of insurance, a policyholder relies on the accuracy and honesty of the information presented to them in order to make a sound investment. Misrepresenting expected dividends not only violates ethical standards but can also lead to significant financial repercussions for policyholders if they are promised returns that are not delivered. This practice erodes trust between the insurance provider and the consumer, making it particularly detrimental in the industry.

The other terms, while related to unethical practices, are not specific to misleading information about dividends. Twisting refers to convincing a policyholder to replace an existing policy with a new one for the benefit of the agent rather than the insured. Rebating involves giving something of value as an incentive, which can also be unethical but is different from direct misrepresentation of policy benefits. Fraud incorporates a wider range of dishonest behaviors that include but are not