An Alternate to Doom and Gloom About IFP

Aug 6, 2015

  1. FLM2
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    Many of us are preparing for the worst case scenario in the next few years, which is IFP commissions going away. There is certainly anecdotal evidence that commissions will continue to be reduced and possibly eliminated.

    At the same time, though, there is some significant investment money behind the larger companies in this space. eHealth is public and their primary revenue stream is IFP, companies like Health Sherpa and GoHealth are VC backed (Health Sherpa has Kapor Ventures, founded by Lotus founder Mitch Kapor, one of the legendary figures in the beginnings of the commercial software business). I'm sure there are others as well.

    If I take a dispassionate perspective on this, I have to come to the conclusion that none of the VC investments would have been made had there been anything turned up during the due diligence investigation that indicated commissions would be ending. eHealth, while having the usual Risk Factor indication about commissions 'could be reduced or eliminated' (along with 50 others) is really counting on IFP even though it is expanding its Medicare business.

    Disclosure: before getting into the insurance business I had mergers, acquisitions, and venture capital experience with companies I worked for or with-the due diligence process for the lead investor is very extensive and these investments, while having risk factors, have to pass with flying colors.

    So, with all of that being said, are our businesses truly at risk in either the short term (or long term) or are we just so used to getting beaten over the head that we have just come to expect the worst?
     
    FLM2, Aug 6, 2015
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  2. Ann H
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    In some states it's already happened.

    In most states, at least one carrier has done it. Here in AZ, we have three or four.

    In other states, one or two carries dominate, and that's frightening.

    Historically, carriers realize later that agent-driven business was the best, and revert to paying commissions. Unless they dominate the market, that is.

    So, who knows. Any agent must do a SWOT, and analyze their Strenghts, Weaknesses, Opportunities, and Threats. It's certainly a Threat. But, sometimes the Opportunities make it worth facing the Threat, especially if your Weakness isn't that you're low on cash reserves and have no other income stream as a back-up.

    Hopefully, it won't happen. I think it will happen, but if it does I can just pivot to other things until the market comes back again. Even if we go single payer, supplement products will arise.
     
    Ann H, Aug 6, 2015
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  3. Yagents
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    Yagents, Aug 7, 2015
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  4. Bob_The_Insurance_Guy
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    Bob_The_Insurance_Guy Guru

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    You have a Life and Health license. You can still sell:

    Life Insurance
    Disability
    Long Term Care
    Critical Illness Coverage
    Medicare
    D/V
    Pet Insurance

    I don't concentrate in just Health, FE, or Medicare. That's why I sell all year round with all the products at my disposal.
     
  5. FLM2
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    it's the same avenue, helping people enroll in individual health insurance...

    ----------

    that wasn't the question, all of us have alternative options we are pursuing in addition to IFP...
     
    FLM2, Aug 7, 2015
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  6. Yagents
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    Yagents, Aug 7, 2015
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