Becoming an Independent Health Agent

So you either are currently selling health insurance with a captive agency or want to go independent right out of the gate? Not a problem, however there are some steps to follow. First, let’s cover the benefits of becoming an independent health agent:

• You are truly self-employed. You don’t get calls from your “manager” pestering you for production. The carriers don’t care if you submit five applications a day or 1 per year. There are no production requirements from any carrrier for independent agents. You only get into production requirements if you want to become a general agent. 

• You own your book of business. What’s a book of business? Your clients! Chances are if you’re with a captive agency you do not own your book. Simply put, if you leave you can no longer contact your clients. This is called a non-compete clause. Also, depending on your contract you also need to be with your agency for a certain period of time before you keep renewals. This is called the vesting period. For example, if you contract states that it takes “1 year to vest” this means if you leave before 12 months you lose everything – your clients and future renewals. 

• Write with all the major carriers. If you’re captive you can only sell through the carrier(s) your agency with contracted with. This greatly limits the choices you can offer your client. The problem with this system is you live or die depending on whether or not that carrier(s) is competitive. If they are not competitive you  have to convince your client to take an uncompetitive offer. You also will have a high lapse rate as your clients, over time, cancel to take a better offer. When you’re independent you can obviously write with the most competitive carrier(s) in your state. 

• Keep your client at the time of renewal. All carriers increase rates annually. A lot of carriers also come out with new plan designs and rates. What you’re find is when it comes time for renewal you’re going to have to explore the options with your client. You’re either going to: A) Stay put. B) Re-write through same carrier to get new business rates or another plan (if possible – not all carriers allow re-writes.) C) Write through another carrier. If you cannot explore all possible options due to being captive you’re going to have a very high lapse rate as time goes by. 

• Security. Carriers either have gone out of business, become uncompetitive or acquired a bad reputation. If you’re captive with a carrier you will watch your sales plummet if the carrier goes south. Either that or you’ll find yourself conducting “hard close” presentations to gain business. If that’s the case you might as well sell time shares. When you’re independent it doesn’t matter if your main carrier goes south. All that means is another carrier now takes over first spot which means you don’t skip a beat. 

• Not trapped by advance debt. If you’re captive and taking commission advances chances are your debt is due within 30 days of leaving. This can be a financial catastrophy and the liablity of taking advances through captive agencies is often not explained. When captive agents quit to become independent more often than not they find that they owe thousands of dollars due to unearned advances. 

So we’ve covered all the benefits of being an independent health agent. The next question is obvious; how do you make the switch? 

First things first. If you’re with a captive agency you’ll need to find out if you have any advance debt and how that will be handled if you choose to leave. You also need to read your contract. In some cases it’s a violation of the contractual terms to obtain other appointments while you’re still with your agency.

Some state department’s of insurance report appointments online. If your agency smells a rat they may be able to simply go online to see if you’ve obtained other appoitments. 

Before you pull the trigger you need to do your homework. Pull up a list of all available carriers in your state. You can always email us at admin@ihiaa.com if you want us to email the list. You need to make sure you’re in a competitive state before you become an independent health agent. If you’re not in a competitive state you might want to consider selling online in other states. 

After you’ve determined that your state is competitive you simply need to get contracted with the carriers. At this point you can read our post titled “How to Get Health Insurance Appointments.” 

As aways, if you have any questions about this topic feel free to contact us at www.ihiaa.com