Whether you are looking for life insurance, health insurance, or Medicare plans, there are two kinds of insurance agents: captive and independent. Knowing how they differ and why working with an independent agent has advantages over working directly with an insurance company is important.
These reasons aren’t in any particular order, but this first reason may just be the most important. At the very least, it shows the starkest difference between the two options.
A captive agent works for just one insurance company. Now, we won’t throw them completely under the bus. A captive agent will probably know their plans inside and out. They’ll be able to give you tons of details about their plans. But that’s it. They won’t be able to compare their plans - as far as benefits or rates - to any other company. How will you know if their options are the best ones for you?
Independent agents, on the other hand, have many different options to choose from. They can choose which insurance companies to contract with based on the quality of the carrier. Independent Medicare brokers will typically contract with companies that have A or B ratings.
The most common rating you’ll see for insurance carriers is by AM Best. They rate plans based on benefits, rates, claims processing, customer feedback, and support. An independent agent can compare ratings across all carriers to ensure you’ll be taken care of.
Working with multiple carriers also allows agents to piece together multiple plans so you can get customized benefits. In Medicare, that could mean using one company for your Medicare Supplement and another company for your Part D prescription drug plan. Plus, if your needs change over time, you’ll still be able to work with the same agent.
Captive agents are salaried employees. Whether they win and keep your business or not, they’re paid the same. While we hope that still means they have your best interests in mind, it doesn’t give them much incentive to make sure you’re happy.
Most independent agents are paid on commissions. If you enroll in a plan through them, whatever insurance company you choose will pay that agent a commission. As long as you keep your plan, the agent gets paid. If you leave the plan or start working with another agent, they don’t get paid. That’s why you’ll get such excellent customer service from an independent brokerage.
So, what kind of great customer service are we talking about? First, responsiveness, which might be saying a lot in today’s changing world. If you call an insurance company directly, you might be on the phone for hours. Even then, you may not get a return call for days, weeks, or even months. Independent brokers (the good ones, anyways!) will return your phone call within 24 hours. And that’s only if you don’t get someone on the phone right away!
Second, they’ll help you through the claims process when needed. In most cases, your provider’s office will file your claims. But in cases when they don’t, independent agents will take that job on themselves and make sure your claims are processed in a timely manner. In addition, they’ll know how the benefits in your policy work, so they’ll be able to identify if claims are not paid correctly.
When you work with an independent agent, you are the priority, not the insurance company. Brokers know that Medicare - as well as any other kind of insurance - is never a one-size-fits-all quick-fix. They’ll make sure you have adequate and appropriate coverage for your specific needs.
An independent agent represents you. They’ll be concerned with the quality of the products they offer and will make sure it lines up with what you want.
Have we convinced you to work with an independent insurance agent yet? Great! The next step is to find a local Medicare advisor that can help you move forward with your enrollment. If you’d like to learn more about the services our agents provide, give Local Medicare Specialists a call today.
Schedule a FREE Medicare consultation with an agent in your neighborhood.