What should an insurance agent do with premium money when received from a client?

When an insurance agent receives premium money from a client, it is essential that the funds are managed responsibly and in compliance with legal and ethical standards. Placing the premium money into a trust account is the correct practice because it ensures that the funds are kept separate from the agent's personal finances. This segregation protects the client's funds and provides transparency in financial transactions.

In a trust account, the premium funds are held solely for the purpose of paying insurance premiums on behalf of the clients until the policy is issued or other agreed-upon purposes are met. This also helps in maintaining clear records of all financial transactions related to insurance premium payments. Additionally, using a trust account helps in alleviating any potential conflicts of interest, as the money is handled in a fiduciary capacity to benefit the clients, rather than for the agent's personal use.

Using personal accounts or investing the funds immediately would raise ethical concerns and conflict with the legal obligations that agents have in handling client money. Holding the funds until the policy is issued, while aligned with the agent's role, does not provide the necessary financial safeguards and oversight that a trust account would offer.