The sad reality in this business is that many agents promote companies that compensate them (the agents) the most.  Many carriers offer big incentives and bonus commissions to agents and agencies that meet certain sales goals. So, agents are instructed to show a few carriers to appear objective and independent, but then steer you towards one particular carrier.  

Some Medigap carriers pay lower commissions than others.  In fact, a couple of very well known top-tier carriers pay the lowest commissions (by a significant amount).  When I talk to other agents at educational and training events, I’m disheartened to hear that many agents refuse to even quote a few carriers due to their lower commission structure. 

Ask the Tough Questions

If you’re shopping for a Medicare plan, then it’s perfectly acceptable to ask how much commission your agent will earn for various plans and carriers. Medicare Advantage plans have a more uniform commission structure, but carrier bonuses and incentives can play a larger role.

You want to see ALL the plans on the market in your area.  When we prepare Medigap quotes, we’ll show a list of every carrier, but we’ll highlight the ones we recommend.  Out of 35+ carriers, we typically only recommend between 5 and 7 carriers. Based on feedback from our client and their particular needs, we’ll usually narrow that down to two or three. 

We explain why it’s important to select a carrier with strong financial rating and a history of lower-than-average rate increases. There are other important factors, such as length of time in the Medicare market, customer service (to name a few). 

Ask About Rate Increases

You don’t want to choose a carrier just based on rates.  Often times, carriers will buy up market share with very low rates. However, they increase rates MUCH higher than average over the next 3 to 5 years. 

That might be fine if you are healthy and can switch carriers.  If you have (or develop) serious health issues, then you could be locked into that carrier for life. 

Bottom Line

In order to get the best rates without sacrificing quality, make sure you work with an independent agent who shows you rates for all the carriers.  Ask questions about the company he or she recommends. Make sure the company you select has a very good reputation and has a proven track record of taking good care of their policyholders.  

Many times, one or two of the top carriers also have very competitive rates.  Take your time to find out which carriers your agent recommends and why. They will realize you are asking tough questions and will realize they need to provide thorough answers.