FAQ: Insurance Agents

Independent insurance agents can sell policies from various insurance companies, offering a wider range of choices for their clients. (Captive agents, on the other hand, are contracted with a specific insurance company.) Independent agents can work on their own or contract with a GA or FMO for greater access to more support and resources.

A “captive” insurance agent works for a single insurance company. As such, they are only able to sell that particular company’s policies and cannot offer their clients a wider range of choices.

Absolutely!… For the right people. If you like working with and helping people and are highly motivated, this would be a lucrative career. Some of the benefits of selling Medicare products specifically are:

  • Medicare is confusing, so people are quick to seek out help
  • Medicare supplement policies are standardized, so you can offer any carrier to your client and make the same commission
  • When you’re self-employed, there is virtually no overhead costs for Medicare Supplement sales. Carriers, or your FMO, generally provide all the marketing materials for you.

Medicare market agents work to sell products from carriers in which they earn a commission based on the premium of the policy sold. Medicare agents, specifically, will sell Medicare Advantage plans, Medicare Supplements and ancillary products such as dental, vision and hearing (which most Medicare policies don’t cover).

In addition to new policies they sell, they make a residual income on policy renewals, which is an incentive to maintain a good relationship with current clients.

Most agents earn between 5 and 20 percent in commissions, an average of $66,150 to $75,600 per year for good agents. Many can earn up to a 6-figure salary if they’re highly motivated.

Only captive agents have the option to be paid on an hourly basis. The 2017 median annual wage for an insurance agent was $49,710 and the hourly wage was $23.90 per hour.

All independent insurance agents, on the other hand, are paid by commissions and bonuses, and are, therefore, usually highly motivated to sell.

The timing will always vary from carrier to carrier, however, in general, there are 3 times an agent could earn their commission from a policy:

  • Get paid on the policy approval date (which is usually before the effective date)
  • Get paid on the policy effective date
  • Get paid a month or more after the policy effective date

Yes. Agents who want to sell in the Medicare marketplace must complete a pre-licensing course first.

Then, they must pass a licensing exam in each state they would like to sell in.

Lastly, they must complete certifications to become appointed to sell from the carriers they want to sell from.

  1. Decide if you want to contract with a GA, IMO or FMO (these will generally offer discounts on exams and support navigating the confusing certifications).
  2. Complete your pre-licensing course.
  3. Pass your state licensing exam.
  4. Get certified with carriers.
  5. Start selling!

Yes! And it would be wise to do so. Cross-selling is when an agent sees the need for another product and offers it to the client in addition to their Medicare policy. Most Medicare market agents will offer dental, vision and hearing plans because Medicare policies are often lacking in these areas. You can also offer Medicare supplements, life insurance and much more.

Yes and no. It is a lot harder to sell over the phone, especially in the senior marketplace. While many independent agents work out of a home office, they still have to go on appointments, host seminars, or host a booth at a high traffic place.

Medicare market agents can pay for leads, but not referrals. This is against CMS (Centers for Medicare and Medicaid Services) compliance and could have serious repercussions.

According to CMS, the only way you can use incentives in your insurance sales is if you carry snacks or distribute small gift cards and promotional items that value less than $15. Even so, these incentives cannot be used to push a client into any decision (for example, “I’ll give you this $15 gift card if you can send 3 referrals my way”).

An open release policy allows an agent to end their relationship with their IMO/FMO and still retain their book of business. Should you decide it’s not in your best interest to work with them any longer, you will not be penalized. Agents should always ask about an organization’s release policy before contracting.

FAQ: Agencies

A General Agent (GA) is a producer that recruits agents to work under them. Many GA’s are contracted under an FMO/IMO/NMO and therefore can provide similar resources to their agents on a smaller scale. A full-service general agency can provide back-office support for their agents, training, facilitation of applications, and more.

An MGA, or Managing General Agent, is similar to a General Agent (GA) with the exception that they have been given authority for underwriting. The biggest benefit of an MGA is the expertise they can provide their local agents.

An IMO is an Insurance Marketing Organization and is essentially the same as an FMO (Field Marketing Organization) in terms of how they function and what they provide for agents. The key difference is that IMO’s tend to be a little smaller than FMO’s and therefore may not be able to pay as much in commissions.

A National Marketing Organization is basically an umbrella term for IMO (Insurance Marketing Organization) and FMO (Field Marketing Organization). Many FMO’s and IMO’s will at times refer to themselves as an NMO as well.

A Field Marketing Organization (FMO) is a company that supports independent agents and/or agencies by offering insurance products from top carriers with top-level commissions. You’ll know it’s a great FMO when they offer agents robust services beyond this, such as active training, marketing, leads, programs, access to modern technology, and much more.

Not much except size. Both support independent agents and agencies by offering insurance products from top carriers with top-level commissions. Both can offer extra services to their agents, such as training and back-office support. The only difference is that IMO’s tend to be smaller.

A General Agent (GA) is an insurance agent that has recruited agents to work under them and will provide some additional support like training.

An MGA (Managing General Agent) is a GA but with underwriting capabilities.

An FMO (Field Marketing Organization) supports independent agents and/or agencies by offering insurance products from top carriers with top-level commissions. They can also provide robust services for agents like back-office support, access to technology, training and more.

An IMO (Insurance Marketing Organization) is like an FMO, but smaller in size and, therefore, offers slightly fewer resources for agents.

An NMO (National Marketing Organization) is just another term for FMO/IMO. The hierarchy looks like this:






Field Marketing Organizations (FMO’s) must have staff that helps provide the level of services they do for all their agents and agencies contracted with them. To pay for this overhead, FMO’s will get what’s called an override from the carriers they work with for each policy sold. This override does not come out of the agent’s commission. The carrier will pay the agent and pay the FMO separately.

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