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Tying of Insurance Agents’ Sales to Health Benefits Is Conflict That Flies Below Radar


Next time someone tries to sell you an insurance policy or annuity, ask if their own health insurance depends on it.

It is widely known that insurance agents and other financial advisers are rewarded with cash commissions or bonuses when they sell their company’s products. In addition, though, agents of several mutual life insurance companies—those owned by their policyholders, not shareholders—must generate a minimum amount of sales to qualify for subsidized health insurance and other medical benefits.

People selling financial products can be expected to consider the link between sales and the cost of their benefits when they make recommendations, consumer advocates say.

“These types of arrangements at their core present conflicts that are bad for the consumer,” said David Certner, legislative counsel at AARP, the nonprofit advocacy group for people 50 years and older.

Some financial advisers at Massachusetts Mutual Life Insurance Co. have also complained. In internal online forums that allow agents and advisers to opine on the company’s benefits policies, at least six agents wrote that linking the cost of their health benefits to how much they sell of certain products creates a difficult conflict for them, according to copies of the posts reviewed by The Wall Street Journal.

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