We introduce periodic boundary conditions (PBCs) for the induced electrostatics in the polarizable embedding (PE) model through the minimum-image convention (MIC). It is a simple yet effective approach that includes a more physically accurate description of the polarization throughout the molecular system. Using PE with MIC (PE-MIC), we shed new light on the limitations of commonly employed cutoff models, such as the droplet model, when used in PE calculations. Specifically, we investigate the effects of the unphysical polarization at the outer boundary by comparing induced dipoles and the associated electrostatic potentials, as well as some optical properties of solute–solvent and biomolecular systems. We show that the magnitude of the inaccuracies caused by the unphysical polarization depends on multiple parameters: the nature of the quantum subsystem and of the environment, the cutoff model and distance, and the calculated property.