Convincing a prospective insured to buy an insurance policy based on exaggerations is known as?

The practice of convincing a prospective insured to purchase an insurance policy based on exaggerations falls under the definition of misrepresentation. Misrepresentation occurs when an agent or representative provides false or misleading information about the terms, conditions, or benefits of an insurance policy. This can create an inaccurate understanding of the insurance coverage being sold, leading consumers to make decisions based on incorrect information. In the context of insurance, this is considered unethical and can also have legal implications, as it undermines the foundation of trust and transparency that is essential in the insurance industry.

While other terms like fraud and deceptive practices are related, they have broader or different implications. Fraud typically involves intention to deceive for personal gain, and deceptive practices encompass a wider range of dishonest conduct beyond mere exaggeration. Misleading advertising refers specifically to marketing tactics that can be misleading but not necessarily through direct conversation with the insured. Thus, misrepresentation is the most accurate term for this scenario, as it directly addresses the act of providing false information to persuade someone to buy insurance.