What should an agent do to act in the best interests of the applicant or insured?

Choosing to make suitable recommendations for the customer's needs is fundamental to acting in the best interests of the applicant or insured. This approach emphasizes the importance of understanding the individual circumstances, preferences, and requirements of the client. By evaluating their specific situation and providing tailored advice, the agent ensures that the coverage aligns with the needs of the insured. This not only fosters trust and a positive relationship between the agent and the client but also promotes responsible ownership of insurance policies.

In contrast, limiting disclosures to only essential information can hinder the client’s understanding of the policy, potentially leading to uninformed decisions about coverage. Misrepresenting policy terms, even if intended for client satisfaction, undermines the integrity of the insurance profession and places the client at risk. Charging fees based on policy complexity may create a conflict of interest where the focus shifts from the client's needs to the agent's compensation model, which is not in the best interest of the insured. Hence, making suitable recommendations is vital for ethical and effective insurance practice.