What is the term used when a producer influences a policyowner to convert a whole life policy to a different type of insurance?

The term used to describe when a producer influences a policyowner to convert a whole life policy to a different type of insurance is "replacement." This term specifically refers to the act of replacing an existing insurance policy with a new one, which can occur for various reasons, such as changing coverage needs or seeking better terms or benefits.

In the context of insurance, proper procedures must be followed to ensure that the policyholder fully understands the implications, benefits, and potential drawbacks of replacing their policy. This protection helps to ensure that consumers are making informed decisions about their insurance coverage.

The concept of replacement is significant in insurance regulation because it can sometimes lead to unintended consequences for the policyowner, such as the loss of guaranteed benefits or accumulated cash values in the original policy. Therefore, producers must provide thorough information and guidance during this process to facilitate a beneficial change for the policyowner.