What is the purpose of a Suitability Form in the insurance process?

The Suitability Form serves a critical role in the insurance process by ensuring that the insurance product offered is appropriate for the customer’s individual needs, financial situation, and objectives. This form helps agents and insurers assess whether a specific policy aligns with the customer’s requirements and risk profile.

The use of a Suitability Form is a protective measure designed to prevent customers from purchasing products that may not be suitable for them, potentially leading to financial hardship or dissatisfaction. By gathering relevant information about the customer's circumstances, such as their financial stability, investment goals, and other insurance policies they might hold, the insurer can recommend or issue policies that are genuinely suitable for the client rather than just focusing on selling a product.

Other aspects, such as documenting medical history, calculating premium rates, or verifying the policy delivery method, although important in the overall insurance process, do not specifically address the intent of ensuring that the chosen policy aligns with the customer’s best interests and needs.