Question

7 fred meets with a client, ian, to sell him a life insurance policy. ian provides fred with the necessary information to complete the application. fred recommends a $1,000,000 policy after analyzing ian’s needs and informs him that he will be required to pay $450 in monthly premiums. ian feels that the premium is too high and hesitates to proceed further. since ian is reluctant to sign, fred offers to pay the premiums for the first three months as an incentive. which deceptive sales practice is fred using? a. trafficking in insurance b. tied selling c. inducing to insure d. premium rebating

Explanation:

To determine the deceptive sales practice, we analyze each option:

• a. Trafficking in insurance: Involves illegal trade of insurance policies, not relevant here.
• b. Tied selling: Requires buying one product to get another, not seen in this scenario.
• c. Inducing to insure: Pressuring to buy insurance, but Fred's action is about premium payment, not pressure.
• d. Premium rebating: Returning part of the premium (Fred paying premiums for first three months) as an incentive to buy, which matches Fred's action.

Answer:

d. Premium rebating