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The following are portions of a letter I wrote to Carmen Balber of Consumer Watchdog…

I especially liked your article regarding Mega Life and Health from March 10th.  I regretfully, started my career with Mega and left for the exact reasons you site in your article, failure to pay claims.  Fortunately, I never had a claim like the ones we read about of $400,000.  I had several however, that were over $30,000.

However, your current column “Smoking Gun Documents Show Health Insurance Broker’s are Paid Commissions as High as 20% of Consumer’s Premium” is slightly misleading.

First, yes often times a broker is paid a commission of 20% of the first year commissions, not for the life of  the policy.  This is less than a sales force in many industries.

Second, the process is difficult to find a plan to meet a person of familes needs.  Every family is different and has different resources and medical conditions.  We as brokers work for the client, long after the point of sale.  When a client’s child falls down the stairs at 9PM and they call you asking which hospital can they go take the child to, or the call at 6am, my child has a really high fever, what should I do?  Sometimes it is after a claim when they need to understand how to read their explanation of benefits.

Also, most of us do not bill for our time, like a lawyer or many consultants.  To put this in perspective, in the Chicago market, where I am, my clients  average premium on an individual policy is $250 per month.  So I at a 20% commission make $50 per month on the client the first year and ongoing years more like $10 or $11.  This is not an hour it is a month.  What would a Lawyer charge per month?

Also as a broker, like every other self employed person in America, we pay our own expenses.  My expense last year were $62,910.07.  That is client lists, postage, brochures, semiars travel, etc.  Again, I do not bill the client for my time.  I have a client who this year I met with for six hours over three weeks.  I had a hour drive each way, so I spent on that client before the sale 12 hours.  I still speak with her every month.  Is that not worth $50 per month?  I would  have billed more if I was not working on a commission.  A consultant would have billed her more than likely over $100 per hour and included travel time.

I think you would  have to agree is having access to your insurance professional for less than $50 per month is a bargain.

Eric Wilson is President of I Sell Health Inc.  A Chicago area insurance agency.

Thanks for reading