Typical Commission Schedule

[VolAgent]

I'm actually establishing a down line within my Indy agency...new to Life. Current agreement here for other lines is producers get 40-70% of initial and 25-30% of renewal commission received by the agency, depending on how much premium they produced and retain on the book. After maxing out above $2M, longevity is rewarded by replacing renewal commission with 10% per year ownership in the economic value of the book produced (up to 50%). This essentially makes the producer a minority partner eventually.

Overly generous for Life?

Unless there is some serious training AND marketing for that, that is pretty crappy.

An agent would be better off at a mutual or even somewhere like Bankers or a Torchmark company. They will get some training, it may not be the best depending on the manager, but they will get some.

 

[Cash]

Is it a "real" agency or you just selling people from your tax business? If the latter than that is a fair deal.

BTW I think you are comparing life commissions with p&c. Renewals are next to nothing in life insurance.

 

[scagnt83]

I'm actually establishing a down line within my Indy agency...new to Life. Current agreement here for other lines is producers get 40-70% of initial and 25-30% of renewal commission received by the agency, depending on how much premium they produced and retain on the book. After maxing out above $2M, longevity is rewarded by replacing renewal commission with 10% per year ownership in the economic value of the book produced (up to 50%). This essentially makes the producer a minority partner eventually.

Overly generous for Life?

Its clear you are new to life insurance because that comp is horrible. As the agency you should get overrides, so taking that big of a haircut on the producers comp is just wrong.

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How would you define "life insurance" vs FE and/or MP? The big mutuals?

FE is a special subset of Life Insurance. It has a very narrow focus on what is was designed for. It is designed to just cover final expenses for normally uninsurable people. It is a SI or GI WL policy that does not receive dividends.

Basically, the only reason to sell an FE policy is if the prospect is not insurable, or if they are just dead set against the medical exam.

But FE has become a product that is pitched to lower income prospects because you can get super low premiums and it is a quick and easy sale. Many of the people that FE leads target are not uninsurable, they are just poor or too old to know better. Although many FE leads would probably not get insurance if in meant anything more than signing the app.... but most life insurance agents would consider that person a non-prospect...

FE has the highest lapse rate over the first 5 policy years for a reason.

I have come across plenty of older clients who were sold an FE policy, but turned out to be fully insurable and able to cut their premiums in half... or double the amount of coverage they had. The agent never even bothered to mention a fully underwritten policy to them.

In reality a very small percentage of prospects are true FE prospects (meaning they are a decline for normal UW or unwilling to get med test but honestly want coverage).

Also, FE is meant for just final expenses. It is not meant to cover large needs over $100k. At the end of the day it is life insurance just like all the different other types of life insurance. But it is its own special flavor of life insurance that is very different than most other types.

 

[LTS]

Is it a "real" agency or you just selling people from your tax business? If the latter than that is a fair deal. BTW I think you are comparing life commissions with p&c. Renewals are next to nothing in life insurance.

Yes, this is my current structure for Health. My agents sell to my existing tax clients. I've done all the marketing and delivered them customers to write policies for. I'm planning to expand into a "true" agency. Looks like 90-100% is more the norm.
Ultimately, I want to break into P&C...but my focus now is understanding and developing Life.

 

[ikeman07]

However, in thinking about the end policyholder, I'm not sure I would recommend buying a policy from the "big mutuals" - particularly Northwestern Mutual or New York Life - the companies that don't (seem) to allow brokers. I know Metlife, MassMutual, and Guardian allow brokers to service their policies.

New York Life will let you broker. Full disclosure, I'm with Northwestern, but I had a client that was declined by NML and somehow approved at top rates with NYL. As long as you write 50k premium, NYL will broker. After that one case, I can write any other size case with them as well.

 

[trustandadvice]

New York Life will let you broker. Full disclosure, I'm with Northwestern, but I had a client that was declined by NML and somehow approved at top rates with NYL. As long as you write 50k premium, NYL will broker. After that one case, I can write any other size case with them as well.

NYL used to be an option through CRUMP as recently as a few years ago. I have heard they are a quality firm.