- Uncategorized (86)
- June 22, 2007: Rx Nopays
- May 6, 2007: STM for College Grad
- January 19, 2007: Agent Compensation
- January 18, 2007: Self Insuring
- January 17, 2007: Over Medicated
- January 10, 2007: How Much Do I Need to Say I Weigh?
- January 7, 2007: Underwriting rejection
- December 13, 2006: Pre-existing Conditions
- December 12, 2006: Questions & Opinions
- December 4, 2006: Half a Plan
Agent Compensation
Q. I am a well educated, intelligent individual who is perfectly capable of finding the health insurance plan I want without agent involvement. Why should I pay extra to have an agent tell me which plan to buy?
A. I can appreciate the fact that you seem to be intelligent and well educated.
Someone once said, we are all ignorant, just in different areas.
While you may be quite informed in many areas, it is highly unlikely you have absolute, or even adequate knowledge in others. You may know how to drive a car, but that does not mean you know how to design & build a car.
Health insurance is a highly specialized area that balances the dynamics of risk management with price competitiveness. Any agent can offer quotes on multiple plans but few can effectively balance underwriting savvy and the ability to anticipate final offers from carriers with plan design and price point.
I have been involved in the health insurance industry for more than 30 years on a daily basis, and I still learn things that surprise me. What is available today may not be next month. I can’t imagine how difficult it is for those who only occasionally have to look for insurance.
As for agent compensation, it should be comforting for you to know you are not paying any more to use the services of an agent. The premiums charged by the carrier are exactly the same regardless of whether you go direct to the carrier, buy through an online “direct seller”, buy through a third party endorser or buy through an agent.
Given this scenario, would you rather deal direct with a carrier that can only tell you what they have to offer and cannot, or will not, tell you what their competitors offer?
Or would you like to go through an online direct seller that can only show you 15 - 20% of the plans available?
Possibly you would prefer to buy from a warehouse club or social organization that has been paid to promote a handful of products from a single carrier.
You can also deal with a knowledgeable agent who represents multiple carriers and can take the time to explain the differences in one plan over the other.
Your choice.
February 5, 2007 at 2:40 am
Hello Bob Vineyard,
Well you are absolutely right about an agent, who knows more information about policies because he has to be updated with all new policies and suggest a right policy for the person after understanding clients need. Good question and answer…
February 10, 2007 at 9:23 pm
In Australia agents play a very important role helping people. At GMHBA where I work we even promote our agents and brokers on our home page
May 4, 2007 at 11:50 am
It’s true that you don’t have to pay an agent, at least in the USA. And the really nice thing about that is that not only can you get an agent to compare various carriers for you, but you can talk to a couple agents and make sure that they’re giving you your best options. I’m one for finding the information I need and doing things myself, but in the case of insurance (and taxes, and some other areas) some help is appreciated.
May 6, 2007 at 10:15 am
Hardly a day goes by that I do not talk to someone who “thoroughly researched” their purchase only to discover the product does not do what they thought it would.
Health insurance in parcitular is very complex and, sad to say, most agents don’t even know what they are offering.
I give prospective clients a great deal of information for free, and even tell them where to find answers & do their own research. Less than 5% actually follow through and take even 10 minutes to do a few things that are absolutely necessary before making a decision.