Clients view insurance as reduced uncertainty and only hope that the policy you sell them is appropriate for their needs. The greater due care you exercise in solving their needs, the more valuable your service. Our Suitability Issues course uncovers the mystery of suitability and what happens when products fail to match client needs. View this book for free.

Let’s look at a few excerpts to see why product suitability is high priority for the professional agent:

Agent Legal Duties

While it may not be your legal duty to secure full insurance protection against every conceivable need an insured might have, but there is definite legal obligation to explain policy options that are widely available at a reasonable cost (Southwest Auto Painting v Binsfield – 1995). Likewise, an agent has a legal duty to use reasonable skill in asking certain questions during the application process to determine types of coverage needed (Smith v Dodgeville Mutual Insurance – 1997). Further, failing to determine the nature and extent of the coverage requested as in Butcher v Truck Insurance Exchange – 2000, may subject you to a lawsuit — page 5.

The Importance of Applications

Proper attention to the completion and submission of client applications cannot be stressed enough. Spend at least 50% more time than you do now on applications. Not only is there valuable risk information, but mistakes by you or a client can void, decline or reduce coverage. Be accurate, timely and explain to clients the serious nature of misrepresenting any information they provide — page 13.

Needs-Based Selling

The purpose of a needs-driven sales system is to analyze a client’s needs and determine how insurance can best meet those needs. It is not meant to generate the sale based upon the obvious points of the product or the need of the salesperson to simply produce. It uncovers a prospect’s general financial problems or deficiencies so that the prospect begins to recognize the need. The problem is personalized to arouse interest in a possible solution — page 15

The Heart of Suitability Conduct

Getting to your client’s true need and matching appropriate product is the heart of suitability conduct. However, the issues we present here underscore the fact that finding a single need for a client is not enough. Surely, a serious conversation with a prospect about current challenges, unrealized opportunities, hassles and trends would uncover multiple needs. Wouldn’t it? Therefore, you need to dig deeper with your questions and resist the urge to jump at the very first need your client revealed. In addition, you should always ask your client for clarification of their needs . . . never assume without their input — page 77.


Whether or not the client actually purchases the product offered, the agent should keep a detailed record of the information gathered from meetings with the client, and it the documentation, brochures and other information shared with the client about the product. Copies of signed disclosures, the application, the fact-finding document, and any other customer-related forms, should be kept on file by the agent. Such a file will not only help the agent should there ever be a question about the suitability of the agent’s recommendations, but will also assist the agent in his or her ongoing relationship with the client — page 196.