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INDEPENDENT BROKERS
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USING AN INDEPENDENT BROKER
There is a misconception out there that you will pay more for your Health Insurance if you use an Independent Broker to purchase it. Nothing could be further from the truth! The Insurance Industry is much more regulated and controlled than other Industries such as Mortgage Lending. Insurance companies are not allowed to offer special rates through their company versus buying it from one of their agents or and Independent Agent. They must charge all classes of people the same rate based on age, sex, and health risk. So, they can’t offer two people of the same sex, age, and with the same health risk different prices from each other because one person is willing to pay more or less for the insurance.
This protects everyone and places everyone on a level playing field. As an Independent Agent if I quoted you a price on a plan through BCBS and you went directly to BCBS Home Office they would be forced to quote you the same price I quoted you for the insurance. If the insurance company wants to raise the premium after you bought your policy they have to raise it the same amount for everyone in your class. You will be placed into a class when you buy your insurance. Your class is determined by your age, sex, health risk, and geographic area. So, if there are 1,000 policies in your class they have to raise the premium on all 1,000 policies the exact same amount.
You are probably wondering how an Independent Broker/Agent makes any money if they have to charge the same rate as the Insurance Company and their agents. A commission is built into every premium when the Insurance Company sets up the rates for their insurance plans. The commission that is built into the rate is paid to the agent who sells the policy whether the agent works for the company or is an Independent Agent. When you buy your Health Insurance you will be paying the same rate for the coverage regardless of who you buy it from. This is the law.
So what are the advantages of working with an Independent Agent versus going to the insurance company? Independent Agents usually represent between 10 and 20 insurance companies, so they have hundreds of plans to show you. They also have field underwriting guidelines so they can tell if you will qualify for a plan. They also know what the insurance companies will accept and what they won’t accept when it comes to health risks. They know what you can leave off an application and what has to be put on the application when it comes to your past health history. Most importantly the Independent Agent represents you and not the insurance company, so whatever you tell them stays with them and does not get passed on to the insurance company. The Independent Agent is not tied to one company, so they are not trying to force the one fits all policy on you like an agent who works for just one company. The Independent Agent is going to ask you what you want and need in terms of Health Insurance and what can you afford, and then he will find the perfect plan for you from the many companies he represents.
Wouldn’t you rather work with one agent and get the info and prices on hundreds of plans versus calling 20 different insurance companies who are trying to force you into a plan that might not meet all your requirements. Choices and options is what you will get when working with a Independent Agent. Plus you get someone who is working for you and not the insurance company.
