While it may not seem ultimately important to you, who you talk to or use to sign up for a Medicare Supplement plan can be very important. Most people, for good reason, have no reason to understand the inner-workings or classifications of various positions with the insurance industry. However, it does have some impact on you. So what are the differences between the different types of agents?
The “captive” agent is just what it sounds like. This agent sells only for one company and is only authorized to “pitch” or sell for one company. Most companies that employ captive agents place some restrictions on them to prevent them from going out to get contracted with other insurance companies. Captive companies typically place the focus, in our experience, a little more on salesmanship. Agents go through a lot of sales training, teaching them how to explain the products and sell the products that their company sells.
Independent agents are not tied in to one particular insurance company. An independent agent can sell any company in the state that he is contracted to represent. There are a few companies who do not allow independent agents to sell their products at all – these are typically priced more highly (possibly they don’t want their plans compared with more moderately priced options?). An independent agent can enable you to compare all of the options in a centralized, unbiased place.
A sales rep is a representative that works specifically for an insurance company, usually in a call center. These are very similar to captive agents – they are just usually a little less personal because they work remotely in many cases.
If an agent you speak with is not presenting multiple companies/options to you, it is highly likely you are dealing with a captive agent or a sales rep. While you can certainly sign up for a plan through one of these agents, and they are licensed agents, you will not get hte opportunity to compare plans in an unbiased way. Also, and maybe more importantly, after you sign up for a plan, if you are dissatisfied or have questions, the captive agent or sales rep has ultimate loyalty to the company, whereas an independent agent can place your needs in a more prominent place, since they can simply enroll you in a different company.
Choosing a Medigap plan can be a very difficult or overwhelming thing to do. It is important to have someone who is knowledgeable to guide you along the way. This doesn’t cost you anything and is very helpful. Who you use is important too – and it is certainly important to understand whether they are presenting one of your options or have the ability to present all of the options.