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How do health insurance agents get paid?

This is one of the questions we get asked most. And it makes sense why.

An agent is supposed to help you save money on insurance, but maybe you’ve wondered…

  • Will my family or business have to pay additional costs for a health insurance agent’s services?
  • Will there be a bill from the agent every month in addition to my insurance costs?
  • Are there any hidden fees or commissions that add cost to my monthly insurance bill?
  • Will an agent try to push me toward an insurance carrier who will pay them more money?
  • Would it be cheaper to shop for insurance on my own?

These are great questions, legitimate concerns. So, let’s get real for a minute, tear down the wall of mystery and break down the process of how insurance agents get paid.

1. Insurance Agents are paid a commission from the health insurance companies

The insurance marketplace is vast and sometimes complicated. An insurance agent acts as an intermediary between you and an insurance company. They are not employed by an insurance company; they are employed by you. Their job is to represent your best interests by researching and understanding the different plans available and matching you with the plan that best meets your needs and price range. An agent will provide you with quotes and information about different plans and even assist you with enrollment at no additional cost to you because they are paid a small commission out of the set monthly premium you pay to the insurance company. But this commission does not increase your premium. It’s the insurance company that takes a cut by paying the commission to the agent.

2. Insurance Agent commissions are fairly consistent

Health insurance premiums are regulated by the state. Insurance agents are paid either a predetermined percentage of the premium paid by a client, or a flat dollar rate per client, depending on the type of insurance and the contract negotiated between an insurance company and the agent. But because their commissions are fairly consistent, agents aren’t incentivized to sell one company or plan over another and can keep their focus on finding the insurance plan that will best meet your needs. At Optimized Health Plans, we’ve negotiated the same rates with all carriers, so we really do work for you!

3. Switching plans does not require switching agents

Don’t like your current plan or have a new insurance need? Your current insurance agent can help you find a new plan. Insurance agents rely on retaining their clients. They will continue to receive their commission as long as you are their client and keep paying your premium. If you switch to a new insurance agent, your previous agent no longer receives a commission from your premium. So, it’s in your agent’s interest to get you a health insurance quote and find you a plan that makes you a happy client.

Finding the right insurance can be like trying to find your way through an endless maze. Let an insurance agent be the expert to guide you through to the perfect insurance solution.