Question

An agent tries to sell insurance over the phone to an applicant who appears to be confused, but is eventually able to give enough information for the application to be completed. After the policy was issued, the agent talked to the insured's family and they explained that the insured was recovering from a surgery and might have been under the influence of medication at the time of application. What should the agent do in this situation?

1) Cancel the policy and refund the premium
2) Continue with the policy as it is
3) Contact the insurance company to inform them about the situation
4) Ask the insured to provide additional documentation

Answer 1

An agent who discovers that a client may have been under medication influence should contact the insurance company, talk with the client post-recovery, and act accordingly, possibly canceling the policy and refunding the premium if necessary.

Step-by-step explanation:

What Should an Agent Do After Selling Insurance to a Possibly Confused Client?

When an agent learns that a client may have been confused due to medication following surgery at the time of a sell insurance transaction, it is crucial to address the issue to ensure that the transaction was made in good faith and that the client was able to give informed consent. In this scenario, the agent should:

1. Immediately contact the insurance company to inform them about the situation.
2. Discuss the matter with the insured after they have recovered from the surgery to confirm their intentions and understanding of the insurance policy.
3. Depending on the outcome of the discussion with the insured and the insurance company's policies, consider if action such as canceling the policy and refunding the premium is necessary.

An insurance premium is the amount of money an individual or business pays for an insurance policy. The agent's responsibility here includes ensuring that all parties are adequately informed and that the insured had the capacity to understand the agreement at the time the insurance was sold. It's important to address these concerns with transparency and professionalism to maintain trust and adhere to legal and ethical standards.