$200,000 to Invest in the Business. Looking for Advice

luv2sell · 09-30-2009, 03:13 PM

I value your input, as well as everyone else's, but I want to clarify something to make sure I am interpreting this correctly: if fewer employers are offering benefits to employees, that would make it harder to sell group plans, but it would expand the market for individual plans, wouldn't it? Also, even if the government can pass legislation that requires employers to offer some type of coverage to all employees, a lot of it will be minimalist plans. Wouldn't that leave a lot of room for supplemental insurance?

As for the cold calling and commissioned based comp, I am not afraid of that. I have been on commission only and cold calling CPAs, MBAs, and other profiles for over ten years. An Executive Recruiter, aka a Headhunter, scares the crap out of most prople when they don't expect the call. I have about 15 seconds to grab someone's attention. Assuming I get past that 15 seconds, which I normally do, I can turn it into a fruitful conversation.

Lastly, if the majority of people think that a hard working, intelligent (in my opinion!), organized, well spoken individual can only be making $60,000 in two years and beyond in the insurance business, I am going to thank everyone for their time and bow out of further discussions...My impression from reading hundreds of threads is that the longer term upside should be much higher than that, regardless of the type of insurance one specializes in. Please correct me if my assumptions are wrong...

Originally Posted by ABC

If I were to give you advice in the health side of it:

I would go to work for an agency that specializes in health and employee benefits. You would be very foolish to go and buy a agency with no real back ground in the health field.

Most agencies would hire you on a commission only basis.
You would want to interview many agencies to find the right fit for you.

At that point learn products and the market that you are selling in. Once you are able to sell then you will find out real quick if your cold calling skills can pay the bills.

Let me be honest with you. With the current economic conditions you might be at a real dis advantage if you are competing for a case. A lot of us so called season agents have had to fight a lot harder for deals because there are less and less of them. Currently in our country only 38% of businesses under 50 lives are offering group health benefits.
The expect that to drop another 5% in 2010.

If after 2 years of working for agency if you are making $60,000 then you should look at going out on your own.

Hang on to your $200,000 because you might need to live off of it.

somarco · 09-30-2009, 03:44 PM

$60k is the minimum you should be earning after two years. Depends on the product of course, and how you take your commissions.

As earned takes a while and group even longer. The average gestation period on most group plans (under 20 lives) is 3 months. Add another month, maybe two before you get your first paycheck and it can take a while. If you are working larger groups, 50+ or 200+ lives it can take even longer, especially if you are trying to learn it yourself vs. having a mentor.

You can certainly get to $100k+ in 2 yrs on individual health, especially if you have the capital and contacts to float you through the first few months. Most folks don't have either and bail in 90 days.

Life insurance is a different story. Your market will dictate how much you can earn. Some guys are peddlers, writing 10 - 20 apps a month. Small face amount, small premium. Churn and burn.

If you want to get in the business market (keyman, buy-sell, stock redemption, etc.) you can make a lot more but again, it takes time to learn the biz and generate a pipeline.

So it really depends on your market, drive and ability. This is not a GRQ scheme but some play it like that. Those are the ones that are usually back to selling ladies shoes in a few months.

GonnaFlyNow · 09-30-2009, 04:01 PM

If you sold 3 medsupps per week (which is not that hard), you'd make over $50k your first year. your 2nd year you'd make over $100k, the 3rd year over $150k, the 4th over $200k, the 5th over $250k, the 6th over $300k. and you'd have 300k in income forever after that as long as you kept selling 3 per week.

Then, on the 8th year you decide to "take a year off". that year your income is only $250k. pretty cool, huh?

luv2sell · 09-30-2009, 05:10 PM

GonnaFlyNow: I can't send PMs yet but I can receive them. If you are open to having a discussion at some point, I would love to touch base with you. Can you PM me an email or phone number for you? Thank you in advance.

Originally Posted by GonnaFlyNow

if you sold 3 medsupps per week (which is not that hard), you'd make over $50k your first year. your 2nd year you'd make over $100k, the 3rd year over $150k, the 4th over $200k, the 5th over $250k, the 6th over $300k. and you'd have 300k in income forever after that as long as you kept selling 3 per week.

Then, on the 8th year you decide to "take a year off". that year your income is only $250k. pretty cool, huh?

GonnaFlyNow · 09-30-2009, 07:24 PM

Originally Posted by luv2sell

GonnaFlyNow: I can't send PMs yet but I can receive them. If you are open to having a discussion at some point, I would love to touch base with you. Can you PM me an email or phone number for you? Thank you in advance.

I sent you a pm with my email.

JSO · 10-01-2009, 11:54 AM

It's all about the leads, I've built my business 1 pollicy at a time the old fashioned way. You have to get to the COI's centers of influence, that's what has brought in the most business for us. Mortgage brokers, realtors, banks, captive agents have been a huge help in building our business in FL. Captive agents can't write property policies so instead of them loosing the car and the home, they refer the home to us and we help them keep the auto insurance. We don't bite the hand that feeds us and never burn a bridge, you never know when you may need it again. Just some ideas generating referrals for you.

TheSalesWolf · 10-01-2009, 12:04 PM

With that much capital starting independent is the only smart choice. Start building your own book of business. You can easily spend $3,000 a month marketing and make $10,000 in return if you know what you're doing. Look for a good GA that does a lot of training and will teach you the ropes.

ABC · 10-01-2009, 12:56 PM

I say $60,000 by year two for a couple of reasons.

1. You will be learning the business and market conditions will play a huge factor.

2. If you are with an Agency actually $60,000 in comp is going to be more like $100,000 plus bonus in total commission. At this point you should have a nice client base.
Or maybe you are banging out 15 individual policies a month.

Marco touched on the sales cycle for group business. I have 20 life groups that I have been working on for over year. Some over 5 years. You might be able to open the door to a group but can you get the group through underwriting?

The good thing about the insurance business is the sky is the limit.

I will tell you this that right now everyone is fighting to keep every client and slugging it out to get new ones. Agents that would not even look at a 10 life group now are chasing them with a passion.
You being a rookie you will have some challenges actually making $60,000.

Good luck
And remember

Always
Be
Closing

sannok · 10-04-2009, 09:47 PM

Thank you for share info

bluemarlin08 · 10-04-2009, 10:17 PM

Find an experienced, successfull agent and learn from them, the shortest route to success.

Thatguy · 10-04-2009, 10:25 PM

If you have that kind of investment, you should consider your own agency. Come up with a viable lead system, and hire some agents to properly manage your agency. Make sure you have some good staff and you'll do very well

luv2sell · 10-06-2009, 02:29 AM

Thanks to all of you for your thoughts thus far. Your communications in this thread and via PM are providing a lot of helpful ideas. In my current business, we have been able to lure some experienced billers away from other firms by offering a better commission structure than their previous employer (our fees to clients remain standard within our industry, but we give a higher cut of those fees than the norm to our employees). We have been able to build a strong team this way.

In the insurance field, I understand that commissions are regulated depending on region and the product. Have any of you built a team by providing a better commission structure to your agents than the average found at other agencies?

Thatguy · 10-06-2009, 10:19 AM

The Medsup market is profitable, but it is not as easy as you would believe. First off you are selling to Seniors, which means if you are looking for long term renewal, you are too optimistic. The other issue is the competition with MA. Medsup works fine for people that can afford the premium, but stack it beside an MA plan like Evercare and 99% of the clients are going to go with Evercare. I'm not saying that Medsup is not sellable, it definitely is; but it's not as easy as you might believe. If you want long term renewal, actual Life policies are much better off than Medsup policies.

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Cranson · 10-07-2009, 10:00 AM

The best advice I can give you is to get P&C licensed as well as Life & Health. Learn how to write small commercial insurance. Market to small businesses for P&C business, then cross sell health, life and his/her home and auto insurance. Going after one person for a life policy or health policy may work but you will not maximizing your marketing time and effort.

ABC · 10-07-2009, 03:53 PM

Originally Posted by luv2sell

In the insurance field, I understand that commissions are regulated depending on region and the product. Have any of you built a team by providing a better commission structure to your agents than the average found at other agencies?

I have attempted to do this. I had a couple of agents producing for me. I gave them a really nice package. After two years they were still doing in house sales. They did not have the ability to open doors. When it comes to sales people there are lots of growers but very few hunters.

I am curious how you are going to build a team of agents yet you don't have any experience in the insurance field?