The Dirty Little Secret of Final Expense Sales is the Massive Expense to Write Big #'s

[rousemark]

Gooner you're an exception and not what the standard is. Let's see what your persistency is at the 13 month mark as if I'm not mistaken you said you write a lot of direct express. As for Newby he's making 135-150% on his own business .im not saying an IMO shouldn't make money but a 150k-200k ap producer needs to be at a rate were the IMO makes about a 10% override max.You paid your dues already as your IMO has made big money off you. Should they suck on you big forever? Making 15% above street contract for a 200k producer is another 30k a yr.

You still have not answered the question as to what you suggest agents should be doing instead of FE.... Apparently, you must have something in mind since you stated, "To acquire business in final expense costs huge money and long hours and tons of driving versus other types of insurance"

 

[jdeasy]

Let's say several agents on here who say they do 18-25k a month.Lets look at several metrics involved to achieve those type results. avg premium of $50 a month or $600 a yr means to do $21k a month thats 35 policies a month. at 25% close ratio one would need to see 100 people a month. to see 100 people one would need 150 leads a month. Thats about $3500 in lead costs. most people have an appointment setter so theres another $1300 for appointments.Many agents who write that type business drive 1000 miles a wk easy. at an avg of 25 mpg thats another $150 a week.Expenses alone are about $5400 a month. now remember with $21k of business if you have 80% persistency thats about $16,500 . $16,500 - $5400 = $11k net. $11k -37% taxes which includes = $6990 net.ow one could make 2to 3k more but you get the point. To acquire business in final expense costs huge money and long hours and tons of driving versus other types of insurance.Don't get me wrong theres also many positives like selling to uneducated people that are super easy to sell, one gets paid very quickly and underwriting is very easy. but guys saying they're making 200-300k a yr have huge expenses.Agents are taking all the risk as imo's sit back and make 20-30% for possibly providing a little training. The avg agent does very little business so thats why producers doing 50k or more need to squeeze the crap out of there imo's are walk as theres tons of imo's that will pay them better for there business.

Your numbers are way off. In my case anyway. I've averaged $17,000/mo ap for 6 years now.

I've never had a lead bill for more than $10,000 in a year. Your numbers on applications is about right. I average over 300 applications per year.

I used to get 15 leads per week but for the last year I've gotten 10-12 per week. I do drive about 30,000 work miles per year. I don't have an appointment setter so there's an expense I don't have that you say we need to have.

You have either been talking to the wrong people or you are of the same mindset as obeonebumbass.

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Hey great for you gooner you're happy. But I guess all the agents that left efes were also jeoulous of there Imo,s making big money on them. The Fex owners left efes as they were tired of efes sucking on them. Each agent who does any type of production must look in the mirror and determine his own worth to the IMO. If you're happy with your own situation more power to you.

I don't think your reasons are why Travis left EFES. I know they are not the reasons I left EFES.

I don't get the caring about what the IMO makes. I do care about what I make and if I can get the highest contract out there possible as a producer, it's not an issue to me if the IMO can get 150%. I can't get that from my production so somebody is going to make that money. I would rather Scott and Travis get that money than for the insurance company to keep it.

 

[mbiallas]

Let's say several agents on here who say they do 18-25k a month.Lets look at several metrics involved to achieve those type results. avg premium of $50 a month or $600 a yr means to do $21k a month thats 35 policies a month. at 25% close ratio one would need to see 100 people a month. to see 100 people one would need 150 leads a month. Thats about $3500 in lead costs. most people have an appointment setter so theres another $1300 for appointments.Many agents who write that type business drive 1000 miles a wk easy. at an avg of 25 mpg thats another $150 a week.Expenses alone are about $5400 a month. now remember with $21k of business if you have 80% persistency thats about $16,500 . $16,500 - $5400 = $11k net. $11k -37% taxes which includes = $6990 net.ow one could make 2to 3k more but you get the point. To acquire business in final expense costs huge money and long hours and tons of driving versus other types of insurance.Don't get me wrong theres also many positives like selling to uneducated people that are super easy to sell, one gets paid very quickly and underwriting is very easy. but guys saying they're making 200-300k a yr have huge expenses.Agents are taking all the risk as imo's sit back and make 20-30% for possibly providing a little training. The avg agent does very little business so thats why producers doing 50k or more need to squeeze the crap out of there imo's are walk as theres tons of imo's that will pay them better for there business.

I will agree to a point. I just sat down to complete a profit and loss statement for a mortgage refinance and the numbers slapped me right in the face. While I believe your numbers are a bit off in some aspects (close ratios, average case size, and taxes - you need a new CPA) the overall idea of your comments rings true...this isn't an inexpensive business.

While some folks here are rock stars or at least claim to be I certainly am not. But I am a solid $12k per month producer with the occasional $16k-$18k month. Lead costs are around $3500 per month plus plus plus.

Obviously your success depends upon a number of factors. Primarily your ability to get off the couch and go to work. But the area in which you work can have a huge impact on your production. I'm in central Florida and its a pretty tough market flooded by all kinds of folks trying to get money out of the pockets of our elderly population. That means my leads are harder (more expensive) to generate and closing these folks isn't easy because they are badgered to death by all kinds of sales people.

I don't buy into the whole "the IMO is stealing my lunch" thing. You think they don't have risk? What if I were a real creep that went out and rewrote all my cases and left good ol Brad Aden holding the bag on somewhere around $40k in charge backs. That is a real risk these guys take on us. Do they make money when we produce? Yes. Do they earn it? It depends on your arrangement...but mine sure does.

 

[BURIAL INSURANCE MAN]

The problem with most of these posts is that they want to argue
that you are wrong. In my experience you are dead on the money.
There are always a few people on here who want to universalize
their experience of producing 6 figure numbers while spending little
on marketing. There will always be the exception to the rule but
my rule of thumb has always been each card is worth $100
of WRITTEN NOT PLACED PREMIUM. If anyone can do better that is great
but instead of hearing the same people tell us how much they write
and how little they spend it would be interesting to get some other
feedback from those of us who are not superstars to see what they spend
and what they write. A solid producer in FE in my book is someone
who can take home at least 50k plus renewals year in and year out
and not kill themselves doing it like most of had to do the first couple of years.

 

[JimmyUt]

The problem with most of these posts is that they want to argue
that you are wrong. In my experience you are dead on the money.
There are always a few people on here who want to universalize
their experience of producing 6 figure numbers while spending little
on marketing. There will always be the exception to the rule but
my rule of thumb has always been each card is worth $100
of WRITTEN NOT PLACED PREMIUM. If anyone can do better that is great
but instead of hearing the same people tell us how much they write
and how little they spend it would be interesting to get some other
feedback from those of us who are not superstars to see what they spend
and what they write. A solid producer in FE in my book is someone
who can take home at least 50k plus renewals year in and year out
and not kill themselves doing it like most of had to do the first couple of years.

This is a valid post. When I did final expense full time, I was somewhere between 60 and 80k take home depending on the year after marketing. (not car, fuel etc) I wrote 12 to 15k per month. That was on a 90 to 95% contract with an average $18 lead cost through EFES. With renewals etc the bottom number always got better, and then I added in Medicare and it has been great. I am not rich by any means, but have better hours than anyone I know, and have the flexibility needed for a single parent to get the kids back and forth. I am ramping back up right now and fully expect to net out better than above because of better contracts and more of a referral base, as well as just being better at my job.

 

[jlata1]

I've obviously touched a sensitive button and gotten people to at least think about what they're really netting in final expense.Because of the weekly need for leads and the massive distances driven to write final expense policies and throwing in the worst persistency in the life insurance insurance arena due to the low income levels of clients all need need to take a close look at there business.This note wasn't direct toward any one IMO but just to alert top producers who spend vast amounts on leads and expenses that sometimes we get caught up in WHAT WE GROSS AND NOT NET.Yes IMO's need to make money but top producers have great leverage as the amount of people quoting making $15k or more a month is total bull crap and imo's like Newby know that. As far as Newby assaulting my 10 yr level term as pension max you obviously never read the circumstances. Many people refuse to give one penny so there spouse would be taken care of in the case of an early death so the 10 yr term is used to provide something in the case of an early death that is better than nothing. Also to count on much of a steam of renewals in the final expense business for most producers is a pipe dream as the chances of death or replacement In a 3-4 yr period is great. Again all what I've said is for the avg person and of course there's 10-20% of producers this doesn't apply to. Also to say a top producer like an agent 5 who has 15 appointments a day could set his own appointments is a nice dream. To get hold of many of your appointments takes 3-5 tries at different times of the day.So when does an agent working 12 hrs 5 days a week have time to do that. Now somebody working 2-3 days a week in the field could. So before somebody jumps into this field there are many things to look at. I hope all do well in whatever they do. PEACE OUT

 

[Newby]

I hope you aren't putting me in the arguing category. I like the back and forth of everyone's experience and ideas. I don't consider any of it to be needless bickering.

The truth is there are a lot of agents killing it with FE. There are many more making $40,000 to $60,000 after their expenses. And way, way more that go broke trying.

Being independent with FE is running your own business. It's expensive to start a business. There is a learning curve and a profit curve. There is no way that anyone is going to make the kind of money in their 1st couple years that they will make in their fifth year when they are experienced, have a customer base, a shoebox full of their own B leads, plus 5-years worth of renewals.

People who are broke should not go into business for them self. At least not until they build up some money. But once you are going it should cash flow easily.

 

[jlata1]

Actually Newby I respect your opinions very much and you're extremely knowledgable.

 

[Gooner]

The first post is dead on as far as the real numbers. while their will always
be the rare producer who writes larger case size or can do it with minimal marketing cost to do over 100k in paid biz requires 2500-3500 in mail cost month in and month out. if you have an apt setter ad another 800-1500
per month. the driving is a killer as well. If you can get a realistic 250-400%
return month in month out (I mean real money you can spend not what is
written but what is paid and sticks)

The title of this thread may put off some people but the numbers
are the real deal for most producers.

I do not think IMOs are bloodsuckers. I think they are in biz just
like the rest of us. That being said you can do better as a
producer with certain ones who do give out better contracts.

I do wonder why the same people always want to go negative
on someone who is basically just throwing real numbers out.

I didn't think I was going negative, the OP gave his numbers and I gave mine. Deadhead, pcb and JD all chimed in that they thought those numbers were out of line too. As far as lead cost.

With the availability of lower priced TM leads a good mix of lead sources could definitely lower your current cost. I personally think that if you are spending $30k to write 100AP, something is off. If that was what you were saying. That would be a 3 to 1 ROI, which would be dismal.

As to writing larger cases, it depends on how you do your presentation. If your giving 3 options..yes, your AP average will be lower because more than likely you're leaving money on the table. A good friend of mine changed this in his presentation and his average AP went up $150 per case...was closer to 50MP and now is north of 60MP.

If you're not closing more than 50% of your sits, again its a presentation thing...you're not building enough trust, uncovering the need or you don't know how to work the lead your running. By that I mean my DM appt is different than my P1 appts.

I'm not trying to be belligerent with anyone in this thread...the ASSumption thing is something I've always said and done, so I see how it could've come off that way...for that...I'm sorry. I've spoken with many agents and my numbers are pretty inline with what they are doing. Sorry my experiences don't line up with yours, but all I can do is speak to what I've done.

 

[Newby]

Actually Newby I respect your opinions very much and you're extremely knowledgable.

Thanks for that. I thought by the title of this thread that you felt we made it sound easy when it definitely isn't.