Licensed Health Insurance Agents
A health insurance agent is a sales person who is familiar with many insurance carriers and many polices. The agent is licensed in the states in which the insurance is sold and has to abide by the state department of insurance.
Frequently Asked Questions (FAQs)
How does a Health Insurance Agent Get Paid?
Insurance carriers pay agents directly, and there is ZERO cost to using a health insurance agent. Most health insurance companies pay the same amount. So the agent’s only incentive is to build relationships leading to strong customer loyalty.
Can I Get a policy for Less by Going Directly Through a Carrier?
NO. All costs are the same. It is illegal to manipulate or inflate insurance policies at different rates. That same exact plan must cost the same rate everywhere. If it was priced differently, it would be insurance fraud. Furthermore, all rates are approved by the state department of insurance. So once the rates are finalized everyone quotes the same rates.
Why Do Insurance Companies Use Agents?
Most insurance companies house very few licensed agents. It is not cost effective for them to provide the salary, education, work station, phone lines, and health insurance benefits to employ an agent. Agents are a way for carriers to outsource their sales activities. Instead, insurance companies out-source sales to independent agents, and pay them only when a policy is sold.
So the insurance company can focus on managing their medical claims and coordinating care with healthcare providers.
Are All Agents Good?
No. First make sure your health insurance agent is licensed. Simply ask them if they have a license. If you don’t feel comfortable with the agent, check with the Department of Insurance and reference their license number.
Second, see if your health insurance agent works independently with many companies or is exclusive to one insurance company (captive). It’s hard to get an unbiased opinion if the agent only represents one company and is a captive agent. Therefore, shoppers who call the insurance companies directly are most likely to end up over-paying for their policy, or ending up with a policy that is not the best fit.
Only Work With One Agent
After you find a health insurance agent you like and trust, only work with that agent. If that agent works with many carriers, he or she can show you all the possible choices of coverage. On some occasions I’ve had clients sign up with a proven popular plan and soon cancel. When I make an inquiry into the cancellation, I learn that the replacement policy, sold by another agent, was not thoroughly explained. The client ended up buying something different than what they expected! Sadly, this all could have been prevented by just calling the original agent and asking about the coverage of the other plan in question. Remember, a good agent’s ultimate goal is to get you a policy that you are happy with and keep for a long time.