What is the main ethical dilemma when a broker sells a policy without explaining its limitations?

When a broker sells a policy without explaining its limitations, the core ethical dilemma revolves around a lack of transparency. Transparency is fundamental in the insurance industry, as clients depend on brokers to provide clear and comprehensive information about the products they are purchasing. Failing to disclose limitations can lead clients to have unrealistic expectations or misunderstandings about the coverage, making informed decision-making impossible.

This lack of transparency not only undermines the trust in the client-broker relationship but also exposes clients to potential financial risks if they are unaware of critical aspects of their policy. In the context of ethical practices, brokers have a responsibility to ensure that clients fully understand the products they choose and the limitations associated with those products. Thus, the essence of this ethical dilemma is that the broker's actions can significantly impact the client's ability to make informed choices about their insurance needs.