3 Things to Consider About Med Supp Commissions

  • Originally published April 20, 2011 , last updated January 12, 2016
3 Things to Consider About Med Supp Commissions

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.

Here are three questions you should be asking to understand what you’ll really be paid.

1. How much is the Part B Premium Offset?

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!

2. Are you being charged interest on advances?

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.

3. Are your renewals protected regardless of production?

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.