How is an independent insurance agent different from a regular insurance agent ?
Why is that important to you as you shop to your Medicare?
I will have the answer to that question and more on today's video.
An Independent Medicare insurance broker.
Hi, I am Matthew Claassen with MedigapSeminars.org
Before we get into today's video I wanna be sure you know that whether you're new to Medicare, researching Medicare the first time
or you've had it for some time and you have questions about your rights or the things you can and cannot do you going to find answers
on my website MedigapSeminars.org. What I have done is create an entire series of videos and articles
on Medicare that can take you from start to finish. From how to enroll in Medicare,
the different types of plans within Medicare, to how to find and shop for the right plan for your needs and your budget.
The videos are laid out in a very easy to follow format. Or if you are looking for something specific use our search button and you can
search for anything that you need to know about Medicare
and it should show up. If it doesn't, then please use our
and a license insurance agent will have your answer within 24 hours.
At MedigapSeminars.org our mission is to make sure that you can make an informed decision about your Medicare needs.
I'm an independent insurance broker and I've been helping people with their Medicare from coast-to-coast.
On my website right on the front page at the top are the words
Because that's there I am often asked; what is an Independent Insurance broker and how does that actually differ from an insurance agent.
Well, the difference is significant. It's a difference between a person whose role is to represent
the best interest of the customer or person whose role is to sell you an insurance plan.
In the insurance world, no matter what type of insurance it is that you're looking for, there are two different categories of insurance people.
There is the Independent Insurance agent or insurance broker and there is the
"Captured Agent" also was the classic "insurance agent".
So, let's start with that. What is a classic, Captured Insurance Agent?
The captured insurance agent is an employee of an insurance company. So their contract with an insurance company
forbids them from having contracts with any other company. That means they can only show
you the products and services that their employer allows.
In other videos we talk about two important concepts.
These are critical concepts whenever you're shopping for Medicare supplement. First is that
an insurance company does not have to offer ALL the plans that are available. There are 10 different Medicare supplement plans and
maybe that they offer some plans but they don't offer Plan G or a Plan N.
Second is that although the benefits are standardize so a plan G is the same no matter which insurance company. A plan F
the same. The benefits will be the same no matter what insurance company use but there are no regulations that standardize the prices.
That means the prices for each plan can be wildly different from one insurance company to another.
In fact in any particular area of the country you're gonna find that the best price plan maybe half the price
of the highest price plan, with the exact same benefits.
So how does this fit in with the concept of a captured agent vs. an independent agent? Let me give you a quick example.....
Back in 2014, as many of you are aware, Medicare announced that as of 2020 Plan F and Plan C are going to be discontinued.
Well, Plan F was the most popular plan out there.
There is one insurance company, one of the largest insurance companies in Medicare, they do most of their business
direct, with a captured agent. They do most their business online
through their association with a particular retirement organization.
They didn't have a Plan G anywhere. They were caught completely off guard.
There was no state where they had a Plan G. What's happening; well everyone's moving to a Plan G, Plan G is mathematically a better
value in almost every place in the country, it costs less,
and they could not offer it. So what would happen to those who just call them directly? They agent will talk about Plan F, or maybe
they would talk about a Plan N. But you would not hear about a Plan G, at all.
Nor, of course, would they tell you that their Plan F might be
considerably more expensive than most of the Plan F's out there. If you did ask about a Plan G, ....you get some answer that
I was talking to a person the other day who called me up and said Matthew
I watched all your videos. You keep saying the Plan G is usually the best value. Well, I talked to this company and they said
that a Plan G is not available to me. That I can not get one!
The truth is there were 20 different companies offering a Plan G for that person, in her zip code.
20 different companies. It's not that the Plan G wasn't available to her. Plan G is available, but that company didn't have one.
Of course, they want sell something so they're not going to talk about all of the options that are out there and available to you.
So does this mean? If you are working with a captured agent you're gonna have to talk to a lot of people
to find and and talk about every plan that's out there. Because the prices are wildly different. You can see prices as much as 100%
difference between the best price plan and the highest price plan.
You have to talk to a Captured Agent from each different company
in order to get the full picture of what's available to you, and at what price.
Working with an Independent Insurance broker is a completely different experience!
The independent insurance broker is not employed by any insurance company. They will often run their own agency.
They will typically be contracted with all the major insurance carriers, and certainly the ones that are most competitive in your state.
That means that what they can do is offer you all full picture. You can see all of the plans that are available to you.
You can see all the price variations. A good independent insurance broker should also be looking at the price history of each company
as well as how stable they are, or how stable their finances are. Whether or not that you're price is predictably stable.
We've found that is very important.
The broker is paid by whichever company you choose to do business with because they are paid
to introduce your business to the insurance company, and
So it cost you nothing to work with an independent agent. You're going to pay the same price if you go direct to the insurance
company, or to a captured agent, or go to the independent insurance broker. It's the same cost to you, so there's no reason not to take
advantage of the services that an independent insurance broker can offer.
Let's take a look at the difference between working with at an independent insurance broker and working with a captured agent.
Take a look at this....
Visually, let's take a look at the difference between working with an
independent insurance agent and the captured insurance agent.
In this scenario we will start with the typical captured insurance agent and I am going to..
pick on Blue Cross and Blue Shield here. Blue Cross Blue Shield of Texas.
A lot people, by the way, will not know that BCBS is not a National Insurance company.
In this case, if you're in Texas, Illinois, New Mexico or Oklahoma
and use blue cross blue shield of Illinois, Texas, New Mexico & Oklahoma. If you are in Florida you might use Florida Blue.
you might use Anthem Blue Cross Shield elsewhere. These are all different companies
that have simply purchased the right to use the blue cross blue shield name.
I might touch on that later, but it's not important to this video.
OK, so you call up BCBS. In this case about person
who lives in Plano Texas at zip 7507. He is a 65-year old man who is a non-smoker.
Our example calls up BCBS and says "I want to know what the insurance prices are." BCBS will say, "for Plan F it's $161.00 / month."
Let's take a look at what else they have. What about a Plan G?
"For a Plan G it's $146 / month." You might want to write these down. We will reference them later. We have $161 for Plan F, $146
for Plan G. gee White House will reconsider plan and so how much as a plan and caught
"I also want to consider a Plan N. How much will a Plan N cost?" Let's take a look...
So, talking with the blue cross blue shield agent has a captured it works for blue cross blue shield...
You will know the Plan F is $161, the Plan G $146 and a Plan N is just $114 per month.
What is the difference if the person decides "well, I wan to go to low and independent insurance broker
and find out what the prices really are. Well, let's take a look!
So, this same person
and at the same place, looking in talking with a year and independent insurance broker says
"What's a Plan F cost? This is about what they look like ....
we have a a lot of different insurance companies in the market.
The highest priced products looks to be about $368 a month.
The lowest price plan as can be about $131.98.
and you can look it of the different companies. You can also love of look at more detail as well.
Let's find BCBS and the $161 and obviously the the same plan
you can purchase for about $30.00 less /m. $360 a year less per years. Something else, we can review expanded quotes
and get more information. I am going to pull up to the BCBS site hear for a second...
you can also see, talking to an independent agent that yes it's $161 at age 65. At age a 66 it's also $161 /m.
but at age 67 it takes a leap of about 14.9%.
There are two different ways that a company can have a price increase if they are an attained age policy. They can have regular
price increases. Just a little bit every year. Or we call it Attained age price increases. With BCBS...
they tend to have a jump somewhere. In this case it is at age 67.
They can also have price increases if they apply to the state to get a price increase. They do this if they need to keep up their
profit margins. We can see here this has a history of a low price increases in addition...
It looks like the price jumps 4% to 5% a year, and one year that was zero which lowered their average rate increase.
and then you get to see how this compares to other companies when you are with an Independent Insurance Broker.
I think what's important for you to see is that
with an independent insurance broker you can see there are a lot plans and rates and
that BCBS is certainly not the lowest cost out there. We go to Plan G we'll find something similar...
Again, you've got many, many different insurance companies available with a Plan G. A lot of competition!
You can see that the highest priced plan is actually about three times more than the lowest price plan.
The lowest priced plan is not always, by the way, the best one for you.
You maybe looking for price stability. But their are a lot of good companies in here as well. {looking for BCBS}
It's down here at $146 /month. Well off the best priced, more competitive plans available.
We could say the same thing with Medigap Plan N.
And again their lowest prices can be about the $94 - $95 range, and by the time we get to your BCBS at $114 it is somewhere in the middle.
A lot of different companies here, obviously, that are competing on price. The bottom line here; working with an independent agent
We're going to show you all the plans, or will show you the ones that are more competitive
Typical what we will do is come up into this area and look at the different companies that are offering the plans.
Some of them may not have a great history.
We'll know about it. They may actually actually intend on low-balling the price at first and then raising the price over time.
Others have a better reputation and their finances that can provide some stability. We would talk about all that said you have all the
information you need to make an informed decision. Don't just jump in with the cheapest and obviously
if you're going to only talk with captured agents, well you got to talk to captured agent
for each and every one of these companies before you'll have an idea of the prices and plans that are available to you.
Even after you have a Medicare supplement plan you will get more value and service out of an independent agent than from captured agent.
If your plan ever has an unusual price increases series of price increases that illustrates its not competitive in your
markets, the independent insurance agent can re-shop your plan amongst all the plans that are out there.
All a captured agent can do is hope you don't re-shop your plan.
At MedigapSeminars.org our mission is to help you make an informed decision about your Medicare choices. We want you to see all the
different plans that are available to you and their prices so that you can be confident that you make and the decision that is right for you.
I have found in my experience that
the cheapest plan is not always the best plan. Most of my clients are looking for a good value
and price stability. That's important because
there are some companies that will offer the lowest entry price possible with the intent of raising that price
once you own the plan. The simple fact is that once people have a plan and their comfortable
with it, they can often tolerate a lot of price increases before they start to consider
re-shopping. There are insurance companies that know that and have that in their planned price structure.
you will not hear about that, of course, from a captured agent. They want to buy their plan.
My role when we talk to individuals about their plans, I want them to know that yes this plan's got the lowest possible price
but you can expect price increase. As a matter of fact, many of them will only increase their price on existing policyholders
not a new policy holders. That way the price increase history doesn't show up on our quote engines.
So that's the difference between an Independent Agent and a Captured Agent.
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Please like our page, subscribe to our YouTube channel. I am Matthew Claassen with MedigapSeminars.org. Thank you for watching
Independent Insurance broker specializing in Medicare.