- Thread starter
- #11
Rich-paradox
New Member
- 17
Thank you. You giving me another niche to look into
Niche of Industry with highest renewal/residual
- Thread starter Rich-paradox
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- 4,137
Personally, I like working Medicare. It's highly regulated, and extremely competitive, BUT the sales process is pretty basic and you don't have to convince people of need.
Renewals are really good, but you don't get a lot of money up front. You're building a book into around year 3. Most seniors are really great to work with.
I'd also look at DI, competition is way lower, the commissions are great and the cases are sticky for renewals. You're largely working with business owners, doctors, and other professionals.
No matter what, just figure out the type of person you want to work with.. That's the best start.
Renewals are really good, but you don't get a lot of money up front. You're building a book into around year 3. Most seniors are really great to work with.
I'd also look at DI, competition is way lower, the commissions are great and the cases are sticky for renewals. You're largely working with business owners, doctors, and other professionals.
No matter what, just figure out the type of person you want to work with.. That's the best start.
- Thread starter
- #13
Rich-paradox
New Member
- 17
Thanks again. And hey, what kind of insurance does “DI” stand for, disability insurance?
- 4,137
Disability Income, but yeah.
- 10,330
Renewals are nice. So is enjoying your work.
Your question is more general than you probably think. Take life insurance for example...
Most Term policies pay zero renewals. There are some exceptions, but 90% of the market, especially among price competitive carriers, pays no renewal commission at all.
Whole Life pays the largest renewal %, with UL/IUL right behind it generally speaking.
However, there can be a lot of variation between WL products. FE type WL pays a higher renewal than fully underwritten. Participating WL (dividend paying) is a lower than Non-Participating. FE falls into Non-Par category, it can have renewal %s in the 8%-10% range, along with First year comp in the 100%-120% range. A ParWL (such as Guardian/Mass/etc.) pays renewals in the 4%-6% range, and first year comp in the 50%-60% range. That is a big difference... but understand that the demographics and average monthly premiums for the two products are very different. Most agents selling ParWL make much more off a single sale vs. a FE agent. So its not a true apples to apples comparison looking at comp percentages alone. Then there are the agents who take more of a "planning approach" to life sales, often working the higher income to upper middle income market. Others take a more sales oriented approach (I disagree with the comment that life market is just advisory style), others act as order takers, others are more of a mix depending on the client (myself).
So things can vary a good bit, which is why people are leading you towards what interests you most vs. just comp.
----
DI offers a very nice mix of up front comp and renewal comp. As others have noted, there is often not as much competition in that market. But there are also less people actively looking for a DI policy compared to Life Insurance. Many think they are fully covered with a work policy, but are not, so that can create opportunities to cross-sell DI after leading with a different product such as life.
Imo, if you look at all aspects (the market, average premium, policy persistency) DI is really hard to beat if you can make it your main market.
Policies rarely get replaced unless its just poor coverage. Usually you just add on to existing. Renewals last for a long time and are usually in the 10% range. First year comp is usually in the 60% range. Average premium is around $100-$200/m depending on the demographics.
---
MedSups are known for strong renewal income. Just make sure to shop rates for clients each year as they are prone to being replaced as rates change.
---
Group Health pays very nice renewal income, basically its a level comp. Ancillary group policies also pay level comp, or very strong renewals.
---
Annuities can pay trail income on many different products and comp options. This could create trail income over a few years, or even the life of the policy. But annuities can be prone to being replaced once the surrender period is up, which is 5-10 years for most.
---
Long Term Care pays nice renewals. But the market is extremely limited these days. Hybrid policies are more the norm now and comp on those varies. (good money though)
Most agents in the "life market" also sell DI/LTCI/Annuities as well. Many also sell ancillary products like cancer/dental/vision/etc. Many focus on one area, then cross sell other products when it fits. Lots of ways to structure your business.
Your question is more general than you probably think. Take life insurance for example...
Most Term policies pay zero renewals. There are some exceptions, but 90% of the market, especially among price competitive carriers, pays no renewal commission at all.
Whole Life pays the largest renewal %, with UL/IUL right behind it generally speaking.
However, there can be a lot of variation between WL products. FE type WL pays a higher renewal than fully underwritten. Participating WL (dividend paying) is a lower than Non-Participating. FE falls into Non-Par category, it can have renewal %s in the 8%-10% range, along with First year comp in the 100%-120% range. A ParWL (such as Guardian/Mass/etc.) pays renewals in the 4%-6% range, and first year comp in the 50%-60% range. That is a big difference... but understand that the demographics and average monthly premiums for the two products are very different. Most agents selling ParWL make much more off a single sale vs. a FE agent. So its not a true apples to apples comparison looking at comp percentages alone. Then there are the agents who take more of a "planning approach" to life sales, often working the higher income to upper middle income market. Others take a more sales oriented approach (I disagree with the comment that life market is just advisory style), others act as order takers, others are more of a mix depending on the client (myself).
So things can vary a good bit, which is why people are leading you towards what interests you most vs. just comp.
----
DI offers a very nice mix of up front comp and renewal comp. As others have noted, there is often not as much competition in that market. But there are also less people actively looking for a DI policy compared to Life Insurance. Many think they are fully covered with a work policy, but are not, so that can create opportunities to cross-sell DI after leading with a different product such as life.
Imo, if you look at all aspects (the market, average premium, policy persistency) DI is really hard to beat if you can make it your main market.
Policies rarely get replaced unless its just poor coverage. Usually you just add on to existing. Renewals last for a long time and are usually in the 10% range. First year comp is usually in the 60% range. Average premium is around $100-$200/m depending on the demographics.
---
MedSups are known for strong renewal income. Just make sure to shop rates for clients each year as they are prone to being replaced as rates change.
---
Group Health pays very nice renewal income, basically its a level comp. Ancillary group policies also pay level comp, or very strong renewals.
---
Annuities can pay trail income on many different products and comp options. This could create trail income over a few years, or even the life of the policy. But annuities can be prone to being replaced once the surrender period is up, which is 5-10 years for most.
---
Long Term Care pays nice renewals. But the market is extremely limited these days. Hybrid policies are more the norm now and comp on those varies. (good money though)
Most agents in the "life market" also sell DI/LTCI/Annuities as well. Many also sell ancillary products like cancer/dental/vision/etc. Many focus on one area, then cross sell other products when it fits. Lots of ways to structure your business.
Last edited:
- 4,137
This is a great summary.
Personally, if the Medicare Market goes tail up, I'd go to DI.
With Medicare, I focus on inbound leads and Seniors generally are a pleasure to work with when they feel they aren't being bombarded with Sales speak. On outbound, I find they get pissed quick.. but makes sense when they get pitched all the time.
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