With Modernized plans becoming effective June 1, the Medicare Supplement market suddenly feels a little more crowded—more carriers are competing for your attention, touting refreshed rates and new plan designs as they clamor for market share.
One way these companies will try to grab your attention is with commissions. As an agent, commissions should be a factor in your choice of Medicare Supplement products. But you need to be aware of some of the tactics carriers use to make their commission rate look more attractive without really paying you more.
Many carriers now reduce the agent commission for the Part B deductible premium, meaning $155 of the premium is non-commissionable. In order to promote a higher published commission rate, some of the newer carriers are offsetting the Part B for a higher amount, up to $200!
Beware that some advance commissions are really just loans. Some carriers have a finance charge of up to 1% per month. In this situation, the agent is sacrificing 12% of the commission for a 12-month advance.
Many established agents make a significant portion of their income from their renewals. With some carriers you run the risk of losing that income if your production slips below a certain level.