What term is used to describe the practice of forcing a client to buy insurance from a particular lender as a condition of granting a loan?

The correct term to describe the practice of forcing a client to buy insurance from a particular lender as a condition of granting a loan is coercion. Coercion involves using pressure or intimidation to compel someone to act against their will. In this context, a lender might leverage the loan approval process as a means to require the borrower to purchase insurance exclusively from them or a specified provider, which limits the borrower's ability to choose freely.

While extortion, fraud, and manipulation involve unethical or illegal behaviors, they don't precisely capture the scenario of using conditionality in the lending process. Extortion typically connotes a more direct threat to harm or consequences if demands aren't met, fraud implies the use of deception for personal gain, and manipulation suggests influencing someone to act on misleading premises rather than coercing them through conditional terms. Therefore, coercion is the most fitting term for this particular situation regarding loan conditions and insurance purchases.