Is honesty the best policy always?
It is interesting, that the term honesty comes from the term honour – that which is worthy of esteem.
In this sense, being truthful is usually worthy of honour, and sometimes not. Sometimes being truthful is not in keeping with one’s highest values (if one values life above all else for example).
Thus, it seems to me, that honesty is always the best policy, in terms of always being true to one’s highest values (that which brings the greatest honour to self in one’s own estimation), even if occasionally that requires being less that truthful, or truer to a higher sense of understanding than the recipient of one’s words is capable of understanding at that time.