How do Medicare agents get paid? - Find Medicare Agent - How do I find a Medicare Agent? Free direectory lists Medicare Agents by Zip Code

Medicare agents get paid based on what you buy

Medicare agents get paid

  • A commission that’s build into the product pricing.
  • Generally there are ‘first year‘ amounts and ‘renewal‘ payments.
  • Insurance premiums are set, agents can offer a better deal.
  • Commissions are set by the insurance company.
  • Sometimes additional monies may be paid.
  • Commissions are for agent income as well as to cover expenses.
  • Agents often pay all their own expenses (from rent to phone, etc).
  • Amounts vary by product (Medicare Advantage versus Medigap).
  • Prescription Drug Plans typically pay very little.
  • Commission amounts are not disclosed.

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What do Medicare agents get paid — and what you should know

A commission that’s build into the product pricing.

Medicare-agents-get-paidThe premium you pay for any insurance policy includes a portion that covers compensation to those who market and sell the various products.  This is referred to as the commission.

Commissions can vary based on the particular insurer, state regulations (some actually set some limits), the type of policy (Medicare Supplement versus Medicare Advantage).

And, even if a particular policy is set to pay (say) 10 percent, he or she may only get a portion of that amount.  It’s like real estate, where the commission is (say) 6 percent.  But the selling agent only gets a quarter of that (1.5%).

Commissions for Medicare insurance products are generally much lower than for other insurance products (such as long-term care insurance).  That’s merely because there is greater demand (meaning agents have to spend less money and time marketing).

Generally there are ‘first year’ amounts and ‘renewal’ payments.

The commission is designed to compensate the agent.  For the vast majority, it’s their only source of income (their salary).  And, it’s designed to cover their expenses.  That can range from office space and telephones to marketing costs.  Agents often have to advertise, host seminars, host websites along with a host of other expenses which are all part of their business.

Typically, the commission amounts are higher for the first year that the policy is in force.  Most insurers also pay what’s called a renewal commission during subsequent years.  That is intended to cover the agent’s time and expenses serving their client base.  So, never feel guilty about calling with questions.

Insurance premiums are set, agents can offer a better deal.

Agents can not get you a ‘deal’.  The premiums you pay are set by the insurer and filed with each State.  No agent can say, I can get you a better deal than any other agent.

Sometimes additional monies may be paid.

Some agents and brokers are independent.  But they are affiliated with distributors, often called a General Agency.  These agencies may receive compensation from the insurance company which takes the form of an ‘override’ or ‘bonus’.  Again, this is all built-into the cost of your insurance policy.  You do not pay anything extra.

Commissions are for agent income as well as to cover expenses.

As we indicated, an independent agent generally pays for all of hie or her expenses.  Whatever is leftover is their income which, of course, is then taxed.

Most agents work very hard for their clients.  Those selling Medicare insurance often work nights and weekends when their clients and prospects are available.  During the busiest times of the year (Medicare’s Annual Enrollment period) may work seven days a week for 12 or more hours a day.

Prescription Drug Plans typically pay very little.

The Medicare Prescription Drug Plan is one of the most important overages you can have.  And, it’s one that you can change every year (during Medicare AEP).

However, the commissions generally are low – especially when you consider the amount of time and effort that’s typically needed to input all the data and advise clients.  For that reason, a growing number of resources are enabling individuals to compare their Medicare Prescription Drug Plan options.

Commission amounts are not disclosed.

Medicare-agents-get-paid-2We know, you were reading this hoping we would tell you exactly how much Medicare agents get paid when they sell you a policy.

Let’s just say, in general, it might amount to anywhere from $100 to $300 for the first year (and much less in any subsequent years).  Considering their costs and time, it’s a living when you dedicate yourself to it.  But, it’s not winning the lottery.  We salute the many hardworking agents out there … and hope you’ll give them your trust and opportunity to work with you.

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