Becoming an Independent Insurance Agent

[Guest]

Thanks, John for the lesson. My experience here in CA is that underwriting by all the carriers has gotten very hard. More experienced agents are telling me that cases that would be rated up last year are getting declined this year. I'm to the point that I don't even want to mess with IFP and want to move to the senior market or group. All the carriers in CA want to write are young, healthy people... no one with even minor medical conditions. Many of the carriers have these cut-down plans targeted at 'kids' that I think are just a waste of money.

Al

 

[wilkin]

John I think you included AMS in your list of companies that advance commissions and I've never heard of them doing that. In fact Assurant is the only one I am familiar that advances.

 

[Crabcake Johnny]

You're right - my mistake. AMS doesn't advance. Regarding other compaines, Pinnicle advances CGI and American Republic - also SEIG advances CGI. Unicare advances 6 months and Golden Rule key brokers can advance a full year.

 

[James]

Can you go into the strategy of using a trial app in the case you are not sure if the client will be approved or decline? Or is it best to call and ask someone at the carrier?

 

[senior-advisor-indiana]

I got an email saying CGI is pulling out of Individual health. I am a career agent with them.

 

[Crabcake Johnny]

Can you go into the strategy of using a trial app in the case you are not sure if the client will be approved or decline? Or is it best to call and ask someone at the carrier?

The only carrier I know of that doesn't have pre-screen available nor underwriting guidelines is my Blue Cross in MD - Carefirst.

Assurant, Golden Rule, Aetna, etc...all have published underwriting guidelines and also pre-screen available.

For those who are brand new agents, pre-screen is simply contacting the insurance companies and giving them the pre-existing condition and they will tell you the most likely outcome. This solves putting deals in underwriting that will be declines.

Sometimes you run into "compounding" conditions. High cholesterol might be fine, overweight might be find and depression might be fine. But combine all three and you could have a decline. Again, this is when you contact the insurance company and say:

"Ok, he's 55 years old, 6.0 260 pounds, on Lipitor for Cholesterol and Lexapro for depression."

Even if it's not a decline the company will tell you the likely offer. Maybe it's a 75% rate increase in which case you convey that to your client. Maybe a condition will be excluded and again, you'll want to convey that to your client. Nothing in underwriting should be a suprise as long as your client's being honest with you.

 

[CHUMPS FROM OXFORD]

I got an email saying CGI is pulling out of Individual health. I am a career agent with them.

I am not surprised. Not an "A" rated company. I'm not allowed to use them anyway.

I'm sure you'll do fine elsewhere.

 

[Mike_Golden1]

John is not only very generous with his time, he is very helpful in getting a health insurance broker's business off the ground. He and I started working together in January and, in my 3rd month, I'm on track to write over $60,000 in annualized premium this month and expect to be doing that (or more) consistently in the future.

 

[joshril]

John is not only very generous with his time, he is very helpful in getting a health insurance broker's business off the ground. He and I started working together in January and, in my 3rd month, I'm on track to write over $60,000 in annualized premium this month and expect to be doing that (or more) consistently in the future.

Nice! Do that every month and you'll be on your way to a nice six-figure income! Congrats.. I will concur.. John is knowledgeable and very helpful!

 

[Crabcake Johnny]

CLAIMS REVIEW - DETAILING ALL PRE-EXISTING CONDITIONS ON THE APP.

Health insurance is a unique insurance product since clients actually use it - some use it quite often. Most health insurance companies simply underwrite the application. All the means is they take the application at face value for being entirely accurate in noting all pre-existing conditons.

Almost without fail if a client files a decent sized claim or seeks immediate treatment for something not noted on the application the insurance company will conduct a claims review to make sure there was no deception in the application. Full medical records will be ordered and compared to the application. If the insurance company believes a misrepresentation was made they can deny the claim or rescind the policy and return all premiums.

Examples:

1) Client doesn't tell you he has high blood pressure. Application gets approved - client gets the policy. The client then goes to the doctor for another blood pressure check then off to the pharmacy to fill his prescription. Insurance company gets the claim and says "hey, there's nothing about high blood pressure on the application."

2) Client conveys to the agent that he hurt he back a few weeks ago, hasn't seen a doctor yet and it's really hurting badly. Since he hasn't see a doctor yet both of you think you can beat the system and not note it on the app. Client gets cards, runs off to the doctor, company gets the claims and goes a review. Coverage is rescinded. Why? During the visit the client had to be honest with the doctor about when the accident occured, which the doctor noted on his records. Busted. And if you as the agent facilitated him or even recommed that his condition not go on the app you're looking at loss of your appointment/license.

3) Client forgets to tell you that three years ago she had a major accident and has pins in her leg. After receiving the policy, moths later, she had trouble breathing and is diagnosed with a lung disorder. A claims review is done which catches the pins in her leg. If she would have disclosed that on the app there might have been an adverse underwriting decision so the policy would be rescinded.

Don't let you client roll you under the bus:

You really need this commission - car payments due. Going through the health history an older lady says that she's been getting more frequent headaches and thinks something might be wrong but hasn't seen a doctor. You write the app and don't note it. She seeks treatment, telling the doctor her headaches have been getting worse for moths. Compay gets those medial records and rescinds coverage. Upon notification the client calls the insurance company and says "But I told my agent all about the headaches and he told me that it doesn't need to go on the application." Game, set and match.

It's your job as an agent to explain claims review and protect your client by going over, in detail, their entire medical history. New agents, trying to get their first few deals and excited about the commission, tend to hope clients don't say anything about their past health.

This is what I tell every client before we do an application:

"I really need to protect you just in case you file a major claim. The insurance company will most likely check your medical records so we really need to make sure we're noting all the times you sought medical treatment over the past "X" years."