You might think that working with an experienced, independent agent is your best option when shopping for insurance. Whether it’s life insurance or Medicare insurance, an independent agent should shop the market for you and help you find the best coverage. However, there are some important items to consider when looking for an independent health, Medicare or life insurance agent.
Incentives to Place Business with Certain Carriers
It’s not surprising that insurance companies provide agents with incentive for selling their products. I continually receive emails touting great incentive trips to Ireland, Italy or other vacation spots. Sure, I’d love to win a trip to one of those places. However, that usually means I have to place almost all of my business with one particular carrier. As an independent agent, carriers are vying for my business.
It’s not just the incentive trips. Most insurance companies pay higher commission levels based on production. Again, the only way to qualify for higher commissions is to place most business with just one or two companies.
Recently, I participated in a webinar where one of the country’s top agents explained his secrets of success. He was an independent agent (this means he wasn’t under contract to only write business for one company). He shared some good marketing strategies. However, I was floored when he explained how he won two trips. He explained that once he sold enough policies to win a trip with “company A”, he only focused on “company B” so he could qualify for their trip, too.
Wow! He had no problem telling us that he valued those trips more than he cared about meeting the needs of his clients. Even though “company A” was the best deal (lowest cost and best benefits, etc.), he steered people towards “company B” just to win another trip. That’s truly sad.
Never won a trip
Although I have consistently been in the top 10% of all producers for the past 17 years, I have never won a trip – much to the chagrin of my wife and kids! As an independent agent, I realize that there isn’t a one-size-fits-all product for any type of insurance. Each carrier has it’s strengths. Some carriers have very low premiums for certain age brackets, but higher premiums for others. Some carriers work best for folks with certain medical conditions, but not others. It’s the job of an independent to shop the market, but also determine the best possible plans for a client’s unique situation.
So, I’ve never won a trip, but I also rarely lose a client. I don’t worry another agent replacing a policy because I know I’ve place my clients with the very best policy.
Large Independent Agencies
Whether the agency is primary online or “brick and mortar”, large agencies must continually train employees to be knowledgeable on the various product offerings. Most of these agencies will only offer a limited number of companies simply because it is too costly to train agents. Especially with the high turnover at call centers, it’s much easier to train agents on just a few companies.
Several of the “mega agencies” pay their agents a minimal commission per policy. So, they don’t have the time or desire to assist clients with difficult situations. Also, doing the hard work of shopping, comparing, answer questions, etc. can be time consuming. They aren’t worried about keeping clients happy long-term, so it’s easy to take short cuts.
Of course, I’m sure there are ethical agents who want to do the right thing for their clients, but their supervisors don’t want them to spend too much time helping clients.
Captive Agents
There is nothing wrong with being a captive agent. Captive agents can only represent one company. So, if you call Humana directly to inquire about their Medicare Supplement plans, they’ll send out one of their agents. A captive agent cannot sell any other company’s insurance. At least you know they will be experts with respect to their products. However, it’s unlikely they will mention the negative aspects of their company or products.
What I like about captive agents is that they don’t pretend to shop the market; they are very straight forward and highlight the best features of the products they sell.
Using Humana as an example…they have very good Medicare Supplement and Medicare Advantage products, but they definitely have their weaknesses. At one point, I called the local Human rep and we did a side-by-side comparison with Humana’s leading competitor. It was clear that Humana was the better option in limited circumstances. When discussing plan options with clients, I am free to point out the strengths and weaknesses with each carrier. Helping people make informed decisions is what a good, independent agent does.
Independence isn’t Everything – Questions You Should Ask
It’s important for you to ask an independent agent how many carriers they represent. Ask them if they have any favorites or preferences. In addition to asking about carriers, you should consider the following:
- Experience Ask how years he or she has been working as an agent. I recommend a minimum of 10 years.
- Reputation Check for review or testimonials. Make sure they are legitimate, verifiable testimonials, not just “John W. from Atlanta, GA”
- Expertise Ask tough questions. Do some homework online and see if your agent really knows his or her stuff. See if they have written articles and have proven themselves to be experts in their field.
- Service Ask about the agents ability and willingness to help with things like claims, billing or benefit questions. This is an overlooked, but very important consideration when choosing an independent agent.
How to Find an Independent Insurance Agent – Not Always What You Think! Conclusion
Hopefully, you have found this article informative. It’s nice when you have a great recommendation from a friend or advisor. Even then, do some additional investigative work. When you are looking online, these pointers should help you in your search. If you have any questions, please give me a call at 678-236-1600.
