Photo by Mirko Macari

Photo by Mirko Macari

A life insurance agent argued that the agent has to incur high expenses and deserve the commission that is paid. This is only one part of the story, as seen from the perspective of the agent.

The agent should also see this issue from the perspective of their client. The agent has a duty to take care of the interest of the client. This includes recommending a suitable life insurance product that is good for the client. In the case of an investment plan, there is a duty to advice a plan that offers a fair return for the long term savings. In the case of a term insurance policy, the agent has to recommend a policy that charges a fair rate of premium (but does not need to be the lowest).

The problem arises when there is a conflict of interest. Many agents recommend a policy that pays a high  commission but this is at the expense of the client (who trusted the agent). The agent is trained to give the marketing  reasons to sell the policy, but they are not honest advice. Read more…