Insurance Agent Forum

[Rebel-without-a-clue]

Greetings EVERYONE!

My name is James Dean (yes really), and I am completely new to the business. My question is about the commission structure at American General.

I met with them this morning, and I was told that I will get $500 a week for 19 weeks. This is a training and validation period. after which I would recieve 28 to 40% commission. This is to be a captive agent.

The lady also explained that while I was recieving the 500 a week, my sales would put into a "pool", of which I would recieve 9% a week after the 19 weeks. Along with a "service" amount???

Would someone please explain this to me more in detail, and let me know if this seems like a normal deal...

I asked her for a commission break down in writing, and she said it was in the brochures that I was given, but they contained only benifits and no commission info....

The web doesn't seem to explain the commission structure anywhere, and I'm starting to get P.O.'d at how hard it is to get a straight anwser as to how much you make per sale?

PLEASE PLEASE take a moment to break down how this works. thank you for your time and attention.

James Dean

[HomeService]

I worked for AGLA as a debit agent in the early 1990's where we collected premiums. We would get paid to collect the premiums on business that we did not even write, but was in our book of business. Some of it was dating back to the 1960's, and it was like 25 cents a week, but they converted it to quarterly or annual, and we collected it, or they would mail in. So, we got a small commission on what we collected. Then we also got commission on the new business we sold. The new business commissions we sold, went into a pool, and we got like 15% of that pool every week, or something like that. So, let's say we made $300 a week on collecting old premiums, plus the $150 a week off our new business commissions, we made $450 per week. But if I remember correctly, we wanted that pool to remain at a minimum of like $1000.

Why keep a pool? That was for charge backs. If a policy lapsed, we got charged back, and that came from the pool and not our $450 per week. We got paid based on new business growth over and above the existing business we were collecting- so even if somebody died or lapsed from that 1960's business, it would affect our pay. They paid you better on positive growth, and less if you had negative growth. It all had to do with % of that pool, that you got.
They figured in persistency as well.

Now, what does this have to do with you- and in 2008?

Well, while you do not collect premiums any more, like I did, you will still be getting paid on new commissions, renewals, and maybe they give you a book of business, who knows, I doubt it. But anyhow, you have chargebacks if stuff lapses, you get charged from the pool. This is a good thing- to build up a pool and have it there for chargebacks. Chargebacks are a way of life. This stems from the old debit days of AGLA, but still is good idea in 2008.

Commissions? They range from like 45% on certain whole life plans, to maybe 30% on certain accident and health, stuff like that. Each plan pays differently. The main thing is: if a company annualizes it or just pays you as earned. I don't know the agla contract that you are getting, so I have no clue. Some companies annualize then give you another percent of the final figure as an advance, then finish out the rest of that percentage when the customer pays later in the year. Confusing? Yes. "Advancing" and "as-earned" are two terms you need to learn. Figure out if they are advancing a percentage into that pool, or putting money in there as -earned.