Blog: The Senior's Advocate

Insurance Terms 'Exchange' and 'Non-Captive' Explained

Since the enactment of the Affordable Care Act (Obamacare) many terms have surfaced to the public that weren't commonly heard prior. Words like "exchange" and "non-captive" are insurance terms that have been around for a long time. They aren't anything new and in fact they are widely known terms in the insurance industry. The reason why they are new to so many people is because there are only few insurance companies who are non-captive exchanges (Senior Benefits Group is one of them.) Most insurance companies are captive, which is why the Marketplace captured our attention. I'll break down these terms so when you hear "exchange" and "non-captive" you'll know what they mean.

Exchange. An exchange simply means a place where all insurance products, no matter what carrier, are listed in one spot. This is a huge benefit to consumers shopping for insurance because it means they are able to see all of their options right before their eyes in the same list. They can compare coverages, company ratings, premium rates, deductibles, co-pays and more, all right before their eyes. An exchange is what Senior Benefits Group has had for years. The Marketplace is very useful in the aspect that it's an exchange. That's a huge benefit to someone shopping for insurance because it's more difficult to be suckered in to paying too much for coverage.

Non-captive. A non-captive agent or agency is one that does not represent only one carrier or product, but has access to them all and recommends coverage based on client needs alone. This is also a huge advantage to the average insurance shopper because this means that your agent or agency is recommending coverage that is right for you, not motivated by incentives for selling product like a captive agent might be. Let's put this into perspective with an example. XYZ insurance company is a captive agency, so their agents are trained to only sell XYZ products, even if there is a similar or comparable product available through a different company. They will always recommend only their product, even if it's not right for their client because of two reasons. 1) That's all that they have access to. They work for XYZ insurance company and only know XYZ products. 2) Because they get rewarded based on how much XYZ product they sell. They push higher-commissionable products onto their clients so that they make the most money for themselves and XYZ company. That's not putting the client first at all.

So you see, having unlimited access to a non-captive insurance exchange is a huge benefit to an insurance shopper. It gives you non-biased comparison of everything available on the market, so you make sure you're getting the right product with the right coverage, at the right cost. With some non-captive companies (like Senior Benefits Group) you also have access to a free advisor who can explain and make your options more clear.

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