Using A Broker’s/Referring Agency’s Recomnendations (mom, problems, people)

[jazzcat22]

There are a lot of people who don’t like to shop around for car or health insurance. They use brokers. Sone of these brokers may have years of experience, but I still don’t know how they could be trusted for giving you the best possible recommendation. Medicare “advisors” are legally capped at a set amount by the government. For example, they will earn the same commission whether they refer you to Aetna or Humana. But there can be under the table incentives that a company may give, cash or trips or gifts or restaurant meals to entice brokers to recommend them.

I don’t know if car insurance brokers have any limitations on commissions.

Then there are senior placement companies, like A Place for Mom, that recommend assisted living and nursing homes for older folks. The business model is that the client doesn’t pay for the referral, but they earn a commission for whatever place the client ends up in. So they are more likely to recommend the places that pay the highest commission. And unlikely to recommend a place that won’t pay the commission.

I understand that such businesses want to paid for their services. The reason why I am posting this under Psychology is that I can’t understand why more people don’t question these services. I know I am more cynical than most, so there’s that. Do you think most people just don’t realize the pitfalls of accepting such recommendations at face value or they may know but just don’t want to do the research themselves?

[Pitt Chick]

Originally Posted by jazzcat22

Do you think most people just don’t realize the pitfalls of accepting such recommendations at face value or they may know but just don’t want to do the research themselves?

Neither.

There can be pitfalls to practically any recommendation by anyone.
DH and I did extensive research on both of your subjects.

Then we went to a broker for the Medicare insurance, and we used a Place for Mom to find a great CCRC for my mom.
Both worked out really well. We were well prepared and knew what questions we wanted answers to.

What problems did you have with both?

[Sanderling]

Originally Posted by jazzcat22

There are a lot of people who don’t like to shop around for car or health insurance. They use brokers. Sone of these brokers may have years of experience, but I still don’t know how they could be trusted for giving you the best possible recommendation. Medicare “advisors” are legally capped at a set amount by the government. For example, they will earn the same commission whether they refer you to Aetna or Humana. But there can be under the table incentives that a company may give, cash or trips or gifts or restaurant meals to entice brokers to recommend them.

I don’t know if car insurance brokers have any limitations on commissions.

Then there are senior placement companies, like A Place for Mom, that recommend assisted living and nursing homes for older folks. The business model is that the client doesn’t pay for the referral, but they earn a commission for whatever place the client ends up in. So they are more likely to recommend the places that pay the highest commission. And unlikely to recommend a place that won’t pay the commission.

I understand that such businesses want to paid for their services. The reason why I am posting this under Psychology is that I can’t understand why more people don’t question these services. I know I am more cynical than most, so there’s that. Do you think most people just don’t realize the pitfalls of accepting such recommendations at face value or they may know but just don’t want to do the research themselves?

I would submit, as a former broker myself, that the research one should do is into the brokers rather than into the products themselves (though of course you should understand them thoroughly before making a final decision).

While there's certainly room for charlatans in any field, reputable brokers and salespeople serve a very important purpose. Navigating the ever-changing field of insurance requires full-time dedication to learning and staying educated--that's why there is a whole profession around it. Especially with respect to the way our health care interacts with the tax code and government benefits, consumers really need expert advice. One small mistake can lead to huge debt. Find a broker you trust and take their advice! Research the heck out of your broker--find one who works with MANY products, not one who is employed by or specializes in one carrier over another. Those are salespeople, not brokers.

Regular people can't possibly "do the research themselves" and be confident they understand all the fine print of their insurance policies. THAT way lies a sure path to catastrophe. Of course there are exceptions--basic car insurance, off-the-shelf term life insurance plans for example. But when it comes to Medicare Supplements or health insurance, there's nothing wrong at all with turning to an expert. I recently bought health insurance from the ACA Marketplace, and even though I am a former broker myself I turned to one of the expert brokers on call from the Marketplace to help me with some of the questions I couldn't find answers to. No charge, no hard sell, just expert answers.

There's plenty of watchdogging going on when it comes to services like A Place for Mom. If they are found to be working against the public's interest, believe me, we'd hear about it and they'd be out of business pretty quickly. They do get commissions of course, but they still have to be fair and service the clients first. Independent brokers have the same model, as do travel agents.