The Downside of Working for a General…General Agent?

[zergkiller]

I’m new here but very glad I found the place. I have had my life/health license in Texas for six years and am fed up with working in companies. I fell for the captive agent story without understanding the consequences, and I fell for the “we provide the leads” story in four different flavors, so now I’m looking at the idea of becoming independent. As you can understand, I’m really skeptical.

The way I understand it, there are some companies that will appoint you directly and don’t care about the frequency of your sales, and there are some companies that won’t appoint you unless you go through a General Agent, so I’m looking at both ideas. My plan is to just meet people, do very little cold calling, and sell whatever I sell and pick up whatever references I pick up. No high pressure on either side.

I found an office that claims to be a general agent for twenty companies and am wondering if it is a good idea to go with them. I sure don’t know everything, but I had the idea to work directly for companies and call agent support about product knowledge and the appropriate applications for clients, but only represent a small selection of places I had chosen myself. Thanks to this site, I have asked a few good questions, and I would be the agent of record, and keep my book of business if something happened. At the moment, I can’t see any reason not to do this, other than blind mind numbing fear, to be sure. LOL They seem to offer lots of services and information, in fact, that is their raison d’être. It’s the unknown downside that bothers me. Managers are pushed to hire people and will leave out the things that would have stopped you from wasting months in their organization to find out.

Questions? Comments? Snide remarks?

 

[Josh]

I’m new here but very glad I found the place. I have had my life/health license in Texas for six years and am fed up with working in companies. I fell for the captive agent story without understanding the consequences, and I fell for the “we provide the leads” story in four different flavors, so now I’m looking at the idea of becoming independent. As you can understand, I’m really skeptical.

The way I understand it, there are some companies that will appoint you directly and don’t care about the frequency of your sales, and there are some companies that won’t appoint you unless you go through a General Agent, so I’m looking at both ideas. My plan is to just meet people, do very little cold calling, and sell whatever I sell and pick up whatever references I pick up. No high pressure on either side.

I found an office that claims to be a general agent for twenty companies and am wondering if it is a good idea to go with them. I sure don’t know everything, but I had the idea to work directly for companies and call agent support about product knowledge and the appropriate applications for clients, but only represent a small selection of places I had chosen myself. Thanks to this site, I have asked a few good questions, and I would be the agent of record, and keep my book of business if something happened. At the moment, I can’t see any reason not to do this, other than blind mind numbing fear, to be sure. LOL They seem to offer lots of services and information, in fact, that is their raison d’être. It’s the unknown downside that bothers me. Managers are pushed to hire people and will leave out the things that would have stopped you from wasting months in their organization to find out.

Questions? Comments? Snide remarks?

You can probably get the same or better contract levels with most of the folks on here. What help are they offering you?

 

[Norwayguy]

No matter which way you decide to go the most important thing is to read the entire contract. You do NOT want to assign commissions. You want to be vested day 1 in your commissions. Make sure you understand what happens to your renewals if the carrier terminates your appointment for lack of sales.

Example: I had a contract that once my appointment was terminated the carrier would pay me commissions as long as my total commissions owed for the year exceeded $300. Thats not that bad. I have seen LH contracts that you lose your renewals as soon as the monthly renewal amount drops below $250 a month.

The should be no non-solicitation clause in your contract if you own your client relationship. And if you can get it you want a pre-nup the ability to get a release if everything the person you sign with does not hold up thier end.

 

[zergkiller]

Norway guy:

Thank you so much for responding. Those kinds of things were buried somewhere in my thinking but you brought them out.

"No non-solicitation clause..."

I never plan on following that anyway, although I bet there are some in contracts I've never understood. One of the troubles I've had is that I couldn't believe some of the things I read. I couldn't imagine that anyone could hold me captive, for example. Not selling another companies competitive product is one thing, not selling a totally different product is quite another one.

I don't understand the "pre-nup" sentence. All companies I have worked with before will charge back paid premiums if the client doesn't last a year. Is that what you meant?

 

[VolAgent]

Norway guy:

Thank you so much for responding. Those kinds of things were buried somewhere in my thinking but you brought them out.

"No non-solicitation clause..."

I never plan on following that anyway, although I bet there are some in contracts I've never understood. One of the troubles I've had is that I couldn't believe some of the things I read. I couldn't imagine that anyone could hold me captive, for example. Not selling another companies competitive product is one thing, not selling a totally different product is quite another one.

I don't understand the "pre-nup" sentence. All companies I have worked with before will charge back paid premiums if the client doesn't last a year. Is that what you meant?

You may not plan on adhering to a non-solicitation, but they may have other ideas. A non-solicitation is very enforceable and their lawyers will tear you a new one for breaking it.

But here is food for thought. If you don't plan on living up to your end of a contract, why should you expect the other party to live up to their end?

 

[zergkiller]

Josh, I think the computer lost my response to you. I believe it was because I copy/pasted your name and it had a link in it.

Anyway, my thanks for the quick response.

I am told that this company will help you with case problems and can offer several solutions using their battery of providers that I wouldn't know about on my own. They offer a way to save time by providing forms and presentation examples that I would have to research myself, and all in all interpret information from the main source if I needed it. I don't claim to know everything.

My understanding is that their service would be free to me, since the companies pay them over-rides for the service they provide for them. Big Insurance Company A has no training, no hand holding for forms and procedures, and no agents to handle on the phone if something goes wrong.

 

[zergkiller]

VolAgent

Long story about "living up to contracts" involving various shades of interpretations, agents who were known to do otherwise, and changes in offices and managers. I'm out of that now, and am much the wiser. But the truth is, I DON'T expect anything from any intermediate company except to screw me. That's why I want to relate directly to the suppliers. One of my questions right from the get-go is about being captive or not. It's a deal killer for me.

In the company in question, I was told that I would be the agent of record. For all I know, there is another wrinkle that says:
"However! da da da da...". Read the contract, yes, but another advantage of having someone with many contacts is that I can ask one question to one person and get one answer.

Thank you for your input.

 

[zergkiller]

Well, I can't think of any reason not to do this. From what I understand, the correct term is IMO, and Marv from Longview sent me a PM, to which I can not respond since I don't have 20 posts yet.

The IMO doesn't cut into my commission, I am the agent of record, the book of business is all mine if I chose not to do business with the IMO in the future, there is no contract to worry about, so what else is there? I need to have E & O insurance and the Money Laundering certs and a license.

The owner of the IMO gets paid 5% or so for services, but it doesn't come out of my commission. It looks like a win/win scenario. Instead of having only one company to use for comparisons, I may have ten, and can pick the best one.

When I have a client, if I'm not appointed with the company that worked the best, the application and appointment is automated through the IMO. Any questions? I have a go-to guy to call.

Looks good from here.

 

[MarkTed]

If you think that it does not fit what you can actually do as an individual - then I guess you don't have to go with them.

But if you think working with them would help you grow more especially for your career then why not go with them.