Top Life Producers Production, What's Your Opinion?

[ims01]

I think InsuranceNewsNet did a survey on this recently. I'll see if I can find it.

 

[dennylobach]

I was in an interesting conversation the other day with another fellow perennial MDRT qualifier about production and income in our industry. So here's the two questions we were debating...

Only thinking about people who are "full-time" in this business, and have one year or more of experience:

1. What percent of licenced agents do you think make $100,000 or more per year?
2. What percent of licensed agents do you think are doing 100+ life insurance policies per year?

Interested to hear the forums opinion.

Actually the higher up in income you go the fewer apps you tend to write. The client problems are larger and the annual premiums are much larger $15,000 to $100,000 or more and they are normally paid annually. Additionally once they trust you as the advisor you tend to write all their business so you may write many policies in the same account. You might only nees 6 to 12 clients a year to do much more than when you wrote 50 to 100 apps that had $1000.

Some agent focus on corporate business where they may write key man policies on many executives or attorneys or doctors at one time however it take much longer to get approval to write the account.

 

[jdeasy]

Actually the higher up in income you go the fewer apps you tend to write. The client problems are larger and the annual premiums are much larger $15,000 to $100,000 or more and they are normally paid annually. Additionally once they trust you as the advisor you tend to write all their business so you may write many policies in the same account. You might only nees 6 to 12 clients a year to do much more than when you wrote 50 to 100 apps that had $1000.

Some agent focus on corporate business where they may write key man policies on many executives or attorneys or doctors at one time however it take much longer to get approval to write the account.

That is so much BS.

 

[dennylobach]

That is so much BS.

Would it be reasonable to ask why it is so much BS?

 

[jdeasy]

Would it be reasonable to ask why it is so much BS?

The op is asking about averages, you are are posting about the exceptions.

 

[dennylobach]

The op is asking about averages, you are are posting about the exceptions.

You could be right, however I was relating my own experience and I believe that of the top 20%. Unless you write bigger cases (which are harder to acquire and take longer to develope and underwrite) at a certain point it becomes almost impossible to write more cases and get them delivered without all the staff and overhead. Then you are doing more work but making less or at least not making more.

Personally for years I wrote a large volume of $720 to $2400 annual premium life cases. I had in house direct mail, telemarketers, office staff. 12 to 16 hrs a day six days week. Too Much Work! No Life!

Now I still write some of those cases but for the most part I write much fewer but larger cases, mostly referals, make more money and work much less.

As I said you may be right but this is how it has worked out for me personally.

I was told a long time ago that if you wanted to stay in this business for a long time and not burn out you had to learn to write bigger cases.

 

[CFP83]

Some entertaining reply's here on this question.

The question my friend and I were debating was what percent of agents make 100k of life insurance first year commissions, not total life income. I would argue that after 5 years it would be hard not to make 100k total life income per year simply based off of average production plus renewals. So looking at 100k of fyc is a much different consideration than just 100k of total life income

 

[dennylobach]

Most life income is first year commission. After the first year renewal income is only about 2-3% so if you made $100K a year in first year income each year for 5 years you would still only be receiving about 15,000 a year in renewal income.

And that may seem like a good deal but although Insurance companies preach that we should give service to "our" clients they do not pay us to provide the service. Take a policy that pays $200 a month and you receive 3% x 12 months. How much time can you afford to spend with the client for $72. So even if you do provide the service you can't really count the renewals in your income as they disapear in time, travel, and auto expense just going to see the client.

My clients with larger policies ($10-25 thousand) a year do warrent service and I can afford to visit annually and I get them gifts at christmas. (Food baskets etc) However that usually results in referal business (again first year commissions) and rewriting the policies for surviving spouses ( death benefit procedes - again first year commission). So my point is that for life and annuity agents it's mostly first year commissions. Someone else might have adifferent take but for me after 23 years in insuance that's how it pans out.

I have companies that I haven't written for, for over 15 years and they still pay my renewals however they have added clauses to agents contracts that if the renewal commissions fall below a certain amount they do not pay renewals.

I believe Old Mutual is currently canceling the contract of all agent that have not written a policy for a year, and of course if you lose your contract, you nomally no longer have access to annual policy information. So although they say we shoul give service to "Our"clients, they really believe they are their clients, not the agents. Also if most agent leave after a few years which they do renewals have way of vaporizing

P&C, and health insurance, etc. are designed for renewals but life and annuity is designed for first year.

To compare if a life agent wrote $1000 in premium on a 10 pay policy and had a 100% contract and 3% renewals they would receive $1000 + $30 a year for 9 more years = total of $1270.

If a P&C agent wrote it they might receive %15/yr or $1500 over 10 years.

And if a health or Med Sup agent wrote $1000 in premium they might receive %23 X 10 years or $2300.

The saving grace for Life agents is that you can write much larger policies to solve bigger problems.

 

[TheInsuranceChic]

Denny Dude...

Sorry to say, you still aren't getting it...

Chill out!

 

[Josh]

More specifically, and sorry for not being more clear in my original post, the question my friend and I were debating was what percent of agents make 100k of life insurance first year commissions, not total life income. I would argue that after 5 years it would be hard not to make 100k total life income per year simply based off of average production plus renewals. So looking at 100k of fyc is a much different consideration than just 100k of total life income

It sounds like you lost your debate. I think it is hard to maintain that type of an income as a single producer. Doable sure, but I wouldn't say that by year 5 it's easy. I suppose that would also depend on the lead generation system. If you have your lead generation system humming like a finely tuned german engine, then absolutely $100k would not be hard. The other thing that one needs to consider is that lead generation changes, what may be good for a while can sour later, i.e. voice broadcasting was starting to catch on and more and more agents were getting ready to take the plunge, then they pulled the plug on that and made it illegal. Direct mail used to work much better than it does now, which isn't terrible, but those who are successful with direct mail have to constantly be developing new pieces to maintain a decent response rate. You get the idea?