Does it cost more to buy health insurance through an agent? Consumer Q&A
There’s a common misconception that it costs more to buy health insurance through an agent or broker than to buy your coverage directly through an insurance company.
After all, you’re getting a value-added service when you work through an agent. You’re getting valuable assistance from a licensed professional who knows how to help you find the right plan for your needs and budget. So it makes sense to assume that you’d pay more for it, right?
Besides, if buying health insurance through a licensed agent doesn’t cost more, then how do health insurance agents make a living?
Health insurance agents or brokers get paid a commission by insurance companies for the policies they sell. Contrary to what some people imagine, however, this does not mean that buying health insurance through an agent is more expensive. By law, the commission is built into the health insurance premium already. That means, when you buy a plan through an agent, the agent gets the commission; when you buy a plan directly through the insurance company, the insurance company keeps the commission for itself. You pay the same monthly premium for your health insurance plan either way. It doesn’t cost anything extra to shop with an agent or broker.
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