10 Myths and Misconceptions About Working With an Insurance Agent
When I say “insurance,” what immediately comes to mind? Perhaps you thought of different types of insurance, like car insurance or life insurance.
Now, what comes to mind when I say “buy insurance?”
You probably thought of a company, like Geico or Blue Cross Blue Shield.
But there’s another way to buy insurance that offers a much kinder experience.
Working with an insurance agent is a way to:
- Save money and
- Have a personal advocate.
Instead of waiting on hold and screaming at a robot, you can call up your agent and get help when you need it.
But not everyone sees agents this way.
We’ve gathered up 10 common myths and misconceptions about insurance agents, and we’re ready to bust them all.
Myth #1: Buying from an insurance agent is too expensive.
When you think of an “agent,” you might also think of an advisor – someone who evaluates your finances, gives you recommendations, and steers you in the right direction.
Tax advisors, for example, can be pretty expensive. Even a simple tax return can cost upwards of $500. So, it’s easy to think that an insurance agent would be expensive, too.
But they’re not! Insurance agents are actually free.
You never pay a consulting fee or an hourly fee, and you definitely won’t be getting any mysterious invoices.
Insurance agents work on a commission structure, so you never pay them a dime for their services, even if you don’t purchase anything.
Myth #2: I’m better off buying directly from the insurance company.
Many individuals think you get a price cut if you buy directly from the insurance company. For example, Blue Cross Blue Shield is a very popular health insurance company.
Perhaps you’ve had their insurance all your life, and you don’t plan on changing that. You might think that going to Blue Cross directly would save you time, money, and hassle.
But that’s actually not true!
You will pay the same exact price whether you purchase your insurance directly from the carrier or through an insurance agent.
But the difference?
With an agent, you don’t have to deal with the “corporate” feel of an insurance company. You know, the “Press 1 if you speak English” and “Tell me in a few words what you’re calling about.”
With an insurance agent, you’re not a number in a system – you’re a human being with a name, and the service is much better. The agent will deal with the company for you, so your life is so much easier.
Myth #3: Agents are like middlemen, so the prices must be higher.
Let’s picture a business structure for, say, a can of paint from Walmart.
That paint first gets made by a manufacturer. The manufacturer sells the paint to a wholesaler. Then, Walmart buys that paint from the wholesaler and sells it to consumers.
You can see how each time the paint can gets resold, the price gets higher and higher. If you could only buy it from the manufacturer, you’d save so much money!
And you might think the same thing about insurance. You have the insurance company, and the insurance agent is like the “middleman” – but that’s actually not true.
You can think of insurance agents as the sales force of an insurance company.
Insurance companies rely on independent insurance agents to sell their products, and you’ll never see a “middleman markup” when it comes to insurance prices.
And in reality, you can save money by using an agent!
An agent has the advantage of comparing prices for many different carriers. They’ll let you know which insurance company has the cheapest price, which you save you literally hundreds of dollars on insurance costs.
Myth #4: Insurance agents are scammers.
We’ve all seen the headlines about insurance agents who have pocketed premiums and embezzled money.
And it’s easy to see how these stories of swindlers and cheaters have changed how we feel about insurance agents.
For example, this individual posted on a public forum about his concerns. He says, “I’m terrified that the insurance company itself will be crooked.”
As with anything, there are people who seem to ruin it for everyone. The same goes for bankers, policeman, doctors, and so on.
Just because there were a few bad ones in the bunch doesn’t mean that all agents are out to steal your money.
You never have to be concerned about the legitimacy of Medicare Allies, as all of our agents have done the proper training, and we’ve been helping seniors for over 30 years.
However, if you’re concerned, ask for the agent’s license number, and find out the state they’re licensed in.
Then, you can go to that state’s Department of Insurance website, and you can verify their license number.
It’s also important that you read your contracts to fully understand what you’re purchasing. If you’re confused about something but are feeling shy, don’t be afraid to ask questions!
Myth #5: All insurance agents are the same, so it doesn’t matter which one I choose.
While insurance agents often sell the same products, the way they treat you as a customer can be completely different!
A great insurance agent will get to know you, while a bad one will cut straight to the sale.
A great insurance will take their time, while a bad one will rush you.
A great insurance agent will follow up with you after you’ve received your policy, while a bad one will forget about you.
A great insurance agent will schedule an annual review to go over your insurance plan, while a bad one will disappear.
We see it all the time – agents who seem to treat their clients like a herd of sheep rather than individuals with specific, personalized needs.
That’s why our team at Medicare Allies takes a different approach – our goal is to develop a relationship with you, because we truly care about our clients. We offer a variety of services that many insurance agents don’t.
- We offer a free, personalized Medicare Planner to all new clients.
- We create free, helpful guides and content such as our Turning 65 Checklist and the Medicare Checklist for Ages 66+.
- If you aren’t ready to make a decision when we first talk to you, we give you some time to consider your options. We’ll follow up with you, but we’ll never pressure you.
- Our team puts together a Medicare Allies newsletter that’s full of helpful articles.
- We actually get to know you so that we can call you by name and develop a relationship with you.
Most of the members on our team didn’t get into insurance because they loved the idea of contracts and policies – they want to help people, and getting to know you is what we all look forward to!
Oh, and you know you’ve got a thoughtful agent when they send you a kind note on special holidays.
Myth #6: Insurance agents only make recommendations based off of how much commission they’ll make.
Unfortunately, this is often true when it comes to insurance agents. However, that’s not how Medicare Allies operates, and we’ll give 3 examples to explain why.
Example 1: The Medicare Planner
Insurance is all about risk. That’s always the downside – you may pay into a policy for years and never even use it!
Think about it – when was the last time you used your car insurance? Do you think you’ve paid more into it than you’ve gotten back?
And that’s what makes insurance sales so difficult. We’re often betting on the odds.
That’s why our team does that free, personalized Medicare Planner with you. That planner actually considers all of the insurance types we offer to the senior market.
We get to know you and your family history, and we’re able to make specific recommendations on what you need and what you DON’T need. An insurance agent just after the commission wouldn’t take the time to do a full review and make specific recommendations based on your needs.
Example 2: Our Goal Is to Save You Money
A service we often offer to seniors with a Medicare Supplement is price shopping. For example, you might be 67 years old, and you’ve had your Medicare Supplement for 2 years. You’ve had a few rate increases, and you want to see if there’s a cheaper option out there.
Our team checks the prices of all the carriers we represent to see if we can get you a deal.
So, in general, our team’s goal is to actually save you money, not make money off of you!
Example 3: We Don’t Offer Variable Annuities
Annuities can get complicated, but the kind we offer are actually incredibly simple.
They’re called Multi-Year Guaranteed Annuities (MYGAs), meaning that you sign a contract for a few years, and the interest rate is guaranteed. The most common example is a 5-year annuity with a 3% interest rate.
With that said, we do not offer nor do we ever recommend a variable annuity. These annuities are more complicated, and they’re best suited for a younger clientele.
When you’re a senior, your concern is preserving the money you’ve made, not gambling against your odds. These annuities are also longer term, which don’t make sense for an older audience.
We tell you this because many agents try to sell variable annuities to the wrong people because the commission is higher. (A lot higher.)
But we don’t sell variable annuities, because it’s not what’s best for you.
Myth #7: All agents are pushy – you shouldn’t talk to them unless you want to be forced into buying an insurance policy.
This is another common misconception that sprouted up from a few pushy agents in the industry.
Some agents ARE pushy. There’s no doubt about that.
But you shouldn’t be forced into buying anything. You need to have a clear mind.
- You need to understand what the product is,
- why you need it, and
- you need to feel comfortable that you can afford it.
Our team takes our time with you, and we would never make you feel obligated to buy something.
As we said before, our mission is often to save you money, so more often than not, our clients are thrilled to switch plans!
Myth #8: Insurance agents sell you something and then completely forget about you.
We’ve seen this happen quite often, and it’s very concerning.
If your agent sells you something and then falls off the face of the earth, you got a bad one! It’s time to talk to a different agent.
Be sure to ask the right questions so that you know you have a good agent.
A few examples of questions to ask would be:
- Will you do an annual review with me? (Each year?)
- Will I be able to rely on your help if I ever have a claim?
An agent is your source of support. Make sure they plan on staying by your side for as long as you’re their client.
And per usual, you can be sure our team at Medicare Allies will always be there for you.
Myth #9: Insurance agents have no respect for my time.
This all stems back to some agents being pushy and treating clients like a herd of sheep. When you’re just a number in the system and not an individual, you’re likely to be treated as if your time isn’t valuable.
There are always exceptions – perhaps an emergency occured – but your agent should respect your time and meet with you as planned.
Most agents know how valuable you are, and they will treat you with the respect you deserve. After all, this isn’t the doctor’s office, right?
Myth #10: Insurance agents aren’t trustworthy.
When you’ve had a bad agent or have heard nightmare stories from a friend, you probably think that all insurance agents aren’t to be trusted.
As always, there are a few bad ones in the bunch, but there’s a quick, easy way to find out if your agent is trustworthy:
- Ask for testimonials.
You might be able to find these on the agent’s website or brochure, but ask for some proof that they have other happy customers.
- Don’t buy the first time you talk.
If you’re meeting an agent for the first time, don’t buy something right away. If that agent is trustworthy, they’ll kindly follow up with you. An agent who shouldn’t be trusted will move on to the next victim.
- Look at their website.
Find the agent’s website (it might also be the agencies website), and look at the blog. Are the articles up-to-date? Are they well-written? An outdated, poorly done blog is a good indication that the agent or the agency isn’t serious about helping you.
While this isn’t always the case, a blog is created to help you, so if a team spends the time and money to keep it updated, you know they’re serious about helping you learn.
- Look at their Facebook page.
While this isn’t always a tell-tale sign that an agent is trustworthy, a serious agent or agency will have an active Facebook page. They’ll post often, showing that they’re active.
- Trust your instincts!
When you talk to the agent, feel them out for how genuine and honest they are. You’ll often be able to tell if they’re trustworthy by a simple conversation.
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