As more and more new agents join this board I think it's important to create a sticky - something easy to refer to where you don't have to search through 6 months of posts. If other senior agents want to add something just reply and I'll add it into this sticky.
First: Join the Independent Health Insurance Agent Association - IHIAA-Home. We are set up for A to Z training and support also offering discounts on the top lead sources.
THE VERY BASIC ADVICE IF YOU'RE JUST LICENSED:
If you want to become and independent health insurance agent you should have at least three months of bills in the bank. Basic marketing is around $300 per week so you'll either need marketing money for at least six weeks or be prepared to cold call. The mindset you should have is you're going to be a small business owner. Owning a business in the past or at least past 100% commission sales experience is extremely helpful.
Ask yourself these questions:
1) Do I have an entreperneurial spirit? Can I manage my time on my own without anyone hanging over me?
2) Am I good on the phone? Whether you see your client in person or sell over the phone you'll need sharp phone skills.
3) Do I have spousal support? If your spouse is dead set against this or you have never been on commission during your marriage then.....
WHAT CAN I EXPECT TO MAKE:
Not to sound smug but that depends on you - zero to $100,000 1st year. A good hard-working agent can submit $10,000 per week in volume if you're busting your butt. At 15% that's $1,500 a week - at 20% that's $2,000 a week. Renewal income doesn't really kick in until month 13 however renewals are lifetime as long as the policy stays on the books. The more years you spend in the biz the more you'll have in renewal income.
WHICH COMPANIES WRITE INDIVIDUAL BUSINESS?
This is a list of companies that offer individual health insurance. Not all of these companies will offer coverage in your state so I'd suggest going to you state's department of insurance to get a list. Companies that offer an advance on commissions are in blue.
Aetna, [COLOR=black]American Medical Security[/COLOR], [COLOR=royalblue]American Republic[/COLOR], [COLOR=royalblue]Assurant Health[/COLOR], Blue Cross (find your state's Blue Cross) Celtic, [COLOR=royalblue]Continental General,[/COLOR] Coventry, [COLOR=RoyalBlue]Golden Rule[/COLOR], GTL, Humana, Kaiser Permente, [COLOR=royalblue]Unicare, [/COLOR][COLOR=royalblue]World[/COLOR] and United American. You can Google any of these companies for their website.
To make a living just selling individual health insurance you will need Golden Rule and Assurant Health.
HOW DO COMMISSIONS WORK?
With the exception of some Blue Cross companies that pay a flat "per policy" commission you will earn a percentage of the annual premium. The average monthy premium is $300 X 12 = $3,600 average annual premium.
Commissions range from 10% to 25% depending on the company. Companies also pay either as-earned or advanced commissions.
As-earned: You will receive a monthly commission each month the policy is in force during the first 12 months. Take a 20% commission and a $4,000 premium to make the math simple. In this case it's $4,000 X 20% = $800 commission divided by 12 months. This means you'll earn $66 a month for 12 months.
Advanced: Same example: $4,000 premium X 20% = $800. In the case of a 12 month advance you'd receive the entire $800. In the case of a six month advance you'd receive $400 - the rest would come as-earned. In the case of any advance, if the policy lapses before the advance is earned you will be charged back. Example: Get advanced the full 12 months for $800 and the policy cancels after 8 months. In this case you will be charged back just over $260.
WHO DO I CONTACT TO GET APPOINTMENTS?
This is where it gets complicated. Some companies offer direct appointments. You simply go right to the webite, download the forms and fax 'em back. Aetna is an example.
With other companies you can choose a general agent or brokerage. What you'll want to do is interview several general agents or brokerages and simply find out who's offering the best total package of commission, training and support. One general agent might offer 15% with tons of training and support - another might offer 20% and you're on your own. The point is shop several offers.
Important note: In most cases once you contract through a general agent or broker it's binding for at least 6 months. That means if you come to find you have a bad deal you might not be able to get out of it quickly. Do your homework.
1) Get a list of small business owners and start telemarketing. I use Mailing List - Sales Leads , Telemarketing, Business, Consumer - GoLeads which is $9.95 per month. You can make about 50 calls an hour and generate 2 leads. You'll close about 1 out of 15 so you can do the math: For every 7 hours of calling you have a deal.
2) Business to business. Print up flyers and hit business areas. Ask for the owner and offer them free quotes for health insurance.
3) Doorhangers. You can get 10,000 for $300 at Door Hangers - Printing - DoorHangers.com That's 3 cents a pop and you'll get 1 deal per 1,000 placed. I'd hit townhome areas where you can slap up 200 per hour. At 200 per hour that's 1 deal for 5 hours worked.
If you have marketing money:
1) Internet leads. They cost around $8 a pop and if you're new count on closing 1 out of 20. That's still $160 spent for around $600 return on average so you'll need a high volume. Realize that you will be going head to head with other agents.
Great John. This is very helpful. Takes all the guess work out for a new agent (like myself). This kind of thing is what makes this board different from some others. A big THANK YOU from me (and I am sure all the other newbies!)
And for the newcomers...Don't forget to check out UnitedHealthCare in your State (they market many companies including AMS, which John mentioned, Golden Rule etc...)
If you're new and go direct, which means you contract right through their site, you start out at 15% as-earned commission an as you write more business you can get to 20%. But it's still as-earned. You will get paid directly by Golden Rule. Commissions are paid once a month
You can go through one of their Key Brokers and they can advance you. However, Golden Rule will only advance the Key Broker, not you directly. That means the broker would have to write you a check. If you really need an advance and Golden Rule is very competitive in your state then you might search for a Key Broker. Commissions are paid once a month.
[COLOR=Red]WARNING: [/COLOR]If you choose to go through a Golden Rule Key broker and you write more than 2 applications in a six month period of time you need a written release to move to another broker, go direct or become a Key Broker yourself. You might want to get a document signed where the broker agrees to release you under certain situations. In any case, interview a Key Broker very carefully before you agree to contract with them.
Imporant note about Assurant:
You have three ways to go when contracting with Assurant. Assurant could be very imporant since they advance the full year weekly.
GA contract: You don't need any production requirements to get a general agent contract. You simply go here: http://assuranthealth.com/corp/ah/Ag...eDirectory.htm and click on your state. You'll want to ask for a 20% contract and go to 25% after $75,000 is written. You also don't want a per-deal commission cap of less then $1,500.
The benefits are you're a direct general agent, get dedicated underwriting and a sales assistant after $150,000 is written, many bonuses that only GAs get and trips. You can also hire agents and Assurant will pay them directly and put the overrides in your check. The downside is next to no training. If you need to be trained and supported this is not your best couse of action.
Writing agent under a GA: You can sign a writing agent contract under any general agent. They will give you with either 15% or 20% - negotiate but be prepared to actually write business if you want 20% plus training and support. Remember, the GAs makes nothing is you don't write so take it seriously. Some GAs will "woo" you into signing - then come to find there's almost no support or training. And you're trapped for 6 months. Ask a lot of detailed questions about training and support. You will be company direct and be able to call pre-screen for underwriting questions. Always say you want to get paid directly by Assurant and again, no commission cap of less than $1,500 per deal.
Writing agent under a MGA: You can sign under a managing general agent. You can still get paid directly by Assurant and they can even offer you a general agent contract. The difference is your are not company direct which means everything has to go through their admin person. It's possible to get a higher contract and possibly free leads but you must weigh that against not being company direct.
MY GENERAL ADVICE:
Without training and support don't worry too much about your commission percentage. What's 20% of 0? You will need detailed training on the software, underwriting, applications and daily support. When interviewing brokers make sure you're gonna get training, not unreturned voicemail messages. There are a lot of fantastic GAs and MGAs. There are also just as many who mass hire and have a "throw it against he wall and see what sticks" mentality.
Last edited by healthagent : 07-06-2007 at 01:10 PM.
Would you be kind enough to expand upon the commission caps for some of the new guys and gals and why you recommend $1500 versus $1000, $2000, etc?
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[COLOR=#000066]"Tell me and I will forget. Show me and I will remember. Involve me and I will understand." Confucius
When you contract with Assurant your per-commission cap can be between $500 to $2,000 max. This does not have to be explained to you or agreed upon by you. A RSD or GA has full power to control your cap.
If you really need money, write a nice $600 a month premium X 12 = $7,200 and you're at 20% you might be expecting and needing that $1,440 commish. If you have a cap of $1,000 then you only get $1,000 - the other $440 will be paid as-earned.
I'd actually recommend a $2,000 cap but very few GAs have that high of a cap themselves.
Last edited by healthagent : 03-22-2007 at 11:11 PM.
You'll want to do a thorough pre-screen. No sense if going over plans for 30 minutes to find out their diabetic. No sense in spending 30 minutes on the phone only to learn they have group coverage and aren't looking to switch for 5 months.
Rule 1 - You cannot solve a problem if a problem doesn't exist. Although salesmanship comes into play, unless the client has a problem with their rate, plan or is dismayed that they don't have coverage you bascially don't have a deal. People who say "Yeah, I'm pretty happy with what I have now. The rate's fine, we love the plan but you can show us quotes if you want." That's nothing. Move on. What you're looking for is people to complain.
PRE-QUALIFICATION QUESTIONS:
You want to make sure the client qualifies for coverage. Not only that, but until you do a pre-qual you can't recommend a company or plan.
1) "Are you taking any prescription medication? (If so you'll need name of med, how long they've been on it, dosage and frequency taken.)
2) Do you have any diagnosed medical conditions? (Some people think small ones don't count to I'll get specific with allergies, asthma, high blood pressure, high cholesterol, anxiety and depression.)
3) Have you been hospitalized in the past "X" years? (see your underwriting guideline to see how far back you have to go.)
4) Do you have any scheduled doctor visits? (This is a BIGGIE! If they have a visit scheduled for next week for some type of testing you have to wait. Someone may say "Yeah, I need to go back for cholesterol readings in two weeks to see if I need medication." Can't write them.)
5) Do you have any condition now that you're planning on seeking treament for? (Another biggie. This is especially important to ask people without current coverage. Sometimes they're getting insurance just to get something looked at. If they're planning on seeking treatment for something you cannot offer them coverage. Ex: "Yeah, my back's been acting up and I need to see a doctor.")
FIND OUT WHO THEIR CURRENT DOCTORS ARE
You think the wife is leaving her OB/GYN who she's been seeing for 20 years? Are they gonna change pediatricians? You need to ask who they see and run a network search. You need to make sure their doctors take the network your recommending.
Thanks, John for the lesson. My experience here in CA is that underwriting by all the carriers has gotten very hard. More experienced agents are telling me that cases that would be rated up last year are getting declined this year. I'm to the point that I don't even want to mess with IFP and want to move to the senior market or group. All the carriers in CA want to write are young, healthy people... no one with even minor medical conditions. Many of the carriers have these cut-down plans targeted at 'kids' that I think are just a waste of money.
John I think you included AMS in your list of companies that advance commissions and I've never heard of them doing that. In fact Assurant is the only one I am familiar that advances.
You're right - my mistake. AMS doesn't advance. Regarding other compaines, Pinnicle advances CGI and American Republic - also SEIG advances CGI. Unicare advances 6 months and Golden Rule key brokers can advance a full year.
Can you go into the strategy of using a trial app in the case you are not sure if the client will be approved or decline? Or is it best to call and ask someone at the carrier?
Can you go into the strategy of using a trial app in the case you are not sure if the client will be approved or decline? Or is it best to call and ask someone at the carrier?
The only carrier I know of that doesn't have pre-screen available nor underwriting guidelines is my Blue Cross in MD - Carefirst.
Assurant, Golden Rule, Aetna, etc...all have published underwriting guidelines and also pre-screen available.
For those who are brand new agents, pre-screen is simply contacting the insurance companies and giving them the pre-existing condition and they will tell you the most likely outcome. This solves putting deals in underwriting that will be declines.
Sometimes you run into "compounding" conditions. High cholesterol might be fine, overweight might be find and depression might be fine. But combine all three and you could have a decline. Again, this is when you contact the insurance company and say:
"Ok, he's 55 years old, 6.0 260 pounds, on Lipitor for Cholesterol and Lexapro for depression."
Even if it's not a decline the company will tell you the likely offer. Maybe it's a 75% rate increase in which case you convey that to your client. Maybe a condition will be excluded and again, you'll want to convey that to your client. Nothing in underwriting should be a suprise as long as your client's being honest with you.
John is not only very generous with his time, he is very helpful in getting a health insurance broker's business off the ground. He and I started working together in January and, in my 3rd month, I'm on track to write over $60,000 in annualized premium this month and expect to be doing that (or more) consistently in the future.
John is not only very generous with his time, he is very helpful in getting a health insurance broker's business off the ground. He and I started working together in January and, in my 3rd month, I'm on track to write over $60,000 in annualized premium this month and expect to be doing that (or more) consistently in the future.
Nice! Do that every month and you'll be on your way to a nice six-figure income! Congrats.. I will concur.. John is knowledgeable and very helpful!
CLAIMS REVIEW - DETAILING ALL PRE-EXISTING CONDITIONS ON THE APP.
Health insurance is a unique insurance product since clients actually use it - some use it quite often. Most health insurance companies simply underwrite the application. All the means is they take the application at face value for being entirely accurate in noting all pre-existing conditons.
Almost without fail if a client files a decent sized claim or seeks immediate treatment for something not noted on the application the insurance company will conduct a claims review to make sure there was no deception in the application. Full medical records will be ordered and compared to the application. If the insurance company believes a misrepresentation was made they can deny the claim or rescind the policy and return all premiums.
Examples:
1) Client doesn't tell you he has high blood pressure. Application gets approved - client gets the policy. The client then goes to the doctor for another blood pressure check then off to the pharmacy to fill his prescription. Insurance company gets the claim and says "hey, there's nothing about high blood pressure on the application."
2) Client conveys to the agent that he hurt he back a few weeks ago, hasn't seen a doctor yet and it's really hurting badly. Since he hasn't see a doctor yet both of you think you can beat the system and not note it on the app. Client gets cards, runs off to the doctor, company gets the claims and goes a review. Coverage is rescinded. Why? During the visit the client had to be honest with the doctor about when the accident occured, which the doctor noted on his records. Busted. And if you as the agent facilitated him or even recommed that his condition not go on the app you're looking at loss of your appointment/license.
3) Client forgets to tell you that three years ago she had a major accident and has pins in her leg. After receiving the policy, moths later, she had trouble breathing and is diagnosed with a lung disorder. A claims review is done which catches the pins in her leg. If she would have disclosed that on the app there might have been an adverse underwriting decision so the policy would be rescinded.
Don't let you client roll you under the bus:
You really need this commission - car payments due. Going through the health history an older lady says that she's been getting more frequent headaches and thinks something might be wrong but hasn't seen a doctor. You write the app and don't note it. She seeks treatment, telling the doctor her headaches have been getting worse for moths. Compay gets those medial records and rescinds coverage. Upon notification the client calls the insurance company and says "But I told my agent all about the headaches and he told me that it doesn't need to go on the application." Game, set and match.
It's your job as an agent to explain claims review and protect your client by going over, in detail, their entire medical history. New agents, trying to get their first few deals and excited about the commission, tend to hope clients don't say anything about their past health.
This is what I tell every client before we do an application:
"I really need to protect you just in case you file a major claim. The insurance company will most likely check your medical records so we really need to make sure we're noting all the times you sought medical treatment over the past "X" years."
Becoming a health insurance agent
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