Getting Health Insurance Appointments: Tips on How to Contract

One of the most important decisions any health insurance agent can make is getting appointed with the carriers. Most agents, however, do not know the proper questions to ask or what to look out for when contracting.

Far too often agents find themselves trapped in bad situations and cannot escape. Why? Because one of our industry’s dirty little secrets that is often not found in print:

Once you sign appointment paperwork and start writing business you are more often than not trapped. If you choose at any point in time to move your appointment you’ll find out you need a release. The problem is releases are difficult or impossible to obtain. Most agencies as a business practice do not sign releases.

In order to get around needing a release most health insurance carriers require that you not submit any business for a six month period of time before you can move your appointment without a release. This, of course, can prove to be a career killer.

Let’s go over how to get appointed through some of the major health insurance carriers such as Aetna, Assurant, Celtic, Cigna, Coventy, Blue Cross, Golden Rule, GTL, Humana and World.

Do You contract Direct or Through an Agency?

You can contract directly through almost every health insurance carrier. However, that is not always the best way to get appointed. If you are in need of product training and support you’re better off with a solid agency.

Do You Need a Commission Advance?

You can choose as-earned or advances commissions. That decision is mainly determined by your current financial state. If you need advances you’ll need to make sure the agency you’re contracting through can advance of most of the major carriers such as Assurant, Aetna, Golden Rule, Humana and World. Also note that if you contract directly you may not be able to obtain advances through the major carriers. Some carriers will indeed offer direct advances while others require that you sign with an agency.

Do You Own Your Book of Business

The entire reason you’re an independent agent is to build your own book of business. It defeats the purpose of independence if you do not own your book of business from day one. What does this mean? It means that from day one everyone you sign is your client. You receive all commission and renewals during the life of the policy and you reserve the right to move your client to another carrier if that’s in the best interest of your client. Owning your book of business needs to in writing.

Are Y0u Receiving Top Commissions?

You should be receiving top “street level” commissions through each carrier. There is absolutely no reason to take reduced commissions as an independent agent. Some agents may state that since you’re new and need to be trained you’ll start at reduced commissions. However, there are far too many agencies that will not only give new agents top commission, but also provide them with detailed training and support

The Reduced Commissions vs Free Leads Pitch

A few agencies will attempt to place you at lower commissions in exchange for free leads. This is a game you can’t win and ofen it’s a sucker’s bet. Assume they’re going to place you at 15% commission instead of 20% and offer 20 free leads per week. If you write $10,000 in volume that’s $1,500 instead of $2,000 in commission for a difference of $500. Divide 20 leads into $500 and each lead cost $25! You can get leads for an averge of $7. So if you’re giving up $500 in commission per $10,000 written they need to compensate you with at least 70 leads per week. Aside from that, many agencies will give free leads in addition to top commission. Shop around!

How Many Carriers Do You Represent?

If you’re deciding on any agency you need one that offers contracts through as many carriers as possibly. Why? If you choose an agency that only offers two or three carriers you then have to find yet another agency to handle the rest of the carriers.

Where is Y0ur Office Located and How Much Support Staff do You Have?

You’re looking for an agency with a physical business location that has support staff. If not it’s likely they do not have the system in place to handle the training and support their agents need.

How is Training Conducted?

The better agencies have scheduled training sessions through webinars.

How are Releases Handled?

If you choose to move your appointment at any point down the road you’ll want to know their polices on releases. If they do not offer releases yet a promising things such as free leads you’ll want to get that in writing.

How are Commissions Paid and When?

You need a schedule of each carrier; if commissions are paid by the carrier or agency and when each carrier pays commissions.

Is the Agency Bashing Carriers They Don’t Represent?

Some agencies only represent a few carriers. The main reason is they do not have the production required to obtain general agent contracts with most of the carriers. In some of these cases the agency may bash the carriers they don’t represent by stating things such as they are not competitive, they don’t play claims, etc…The best advice we can give is to continue shopping for another agency.

Can I Hire Sub-Agents?

At some point in the future you may decide to hire agents and earn overrides. However, unless your agency can make you a general agent you’ll need a release to obtain your own general agent contract. If you cannot get that release you’ll be trapped as a writing agent.

One of our top recommendations for agencies? Health Choice One

For any questions about this article contact the Independent Health Insurance Agent Association at admin@ihiaa.com