Insurance Agent Forum

[colomb]

Hi All,

It's so great to find this online community! I'm now facing a very important turning point in my life and I need your advice and help badly.

Recently I kept receiving emails from district managers of Farmers inviting me to become an agent with them. As it's so hard to find an appropriate job currently due to age (50), non-American education background and maybe, the
Bad economic situation, I have to consider this career change very seriously. By browsing this forum, I got to know there are basically two kinds of agents, one works for a specific company and another represents a group of companies. My key questions are:

1) Which kind of agent is the best, their pros and cons?
2) How long will it take to get the mandatory licences(assuming all pass at the first test)?
3) What are the mandatory licences I'll have to get?
4) How long will it take for me to start earning if I put all my efforts?

I'd been a real estate agent for a couple of years which was absolutely a self-employed position, so I know the hardships of being an commission based agent. Please let me know your suggestions and advice so as to make final decision.

Thanks in advance.

[patch36]

You have to learn the business somewhere. Some places are more expensive than others. For me, Farmers falls in that category.

I started with them when I was 49. Left just before 51 and went independent. I make way more money than any of my Farmers career school classmates, even those who were handed a book of business.

Licensing can take a week or two for the initial Life and Health. Depends on how well you can take tests and study.

Look at Medicare Advantage and Supplements, Final Expense and Fixed Index Annuities. In that order, if you want to get a fast start. Look quickly because all the training and prep for the upcoming enrollment period is happening right now. Go to medicare.gov and see what plans are available in your area and then come here and find a good FMO to get appointed through. NOT Parker or any of their shell companies.

[MoonCrowe]

There are always pros and cons to captive (working for a specific company) and Independent. If you are looking at the Life end of the business both can be very lucrative. I was an independent P&C broker in Ca for over a decade. What you get by being captive is instant name recognition, reputation and advantageous national advertising.

As an independent, you get all the cash, but you also get ALL the expenses, in Ca the yellow page ad alone finally got me. (I was walking the high risk side of the street, so renewals weren't that hot)

I am now going captive with Farmer's but my case is different, my Dad was a Farmers agent for 35 years and we share a name.

[patch36]

...and a huge book of business no doubt. A very rare happening, and as long as you have that 35 year old book of business to support your office...you are bulletproof. Not a very good example for someone new in the business who is going down this road.

Great for you that dad can hand you that, but most new agents on the career path have to meet a lot of numbers/goals and take loans against a production promise that is difficult at best to meet, and even when they do it is a subsistence existence.

[Reuben]

So far no one has mentioned the poverty trap that Farmers' will put their new agents under once they sign on to go "captive" (an apt name in this specific instance.).

[xrac]

Originally Posted by patch36

You have to learn the business somewhere. Some places are more expensive than others. For me, Farmers falls in that category.

I started with them when I was 49. Left just before 51 and went independent. I make way more money than any of my Farmers career school classmates, even those who were handed a book of business.

Licensing can take a week or two for the initial Life and Health. Depends on how well you can take tests and study.

Look at Medicare Advantage and Supplements, Final Expense and Fixed Index Annuities. In that order, if you want to get a fast start. Look quickly because all the training and prep for the upcoming enrollment period is happening right now. Go to medicare.gov and see what plans are available in your area and then come here and find a good FMO to get appointed through. NOT Parker or any of their shell companies.

My friend was with Farmers about 5-6 years. He like to starved. Since he left farmers and went independent his income has quadrupled.

[Crazy Rick]

It depends sir, Indy? Captive? Some folks here said it right. With indy, you get all the expenses. And THEY ADD UP VERY QUICKLY. Stationary, leads (at the low end is $13 per lead, per day), basic advertising, gasoline, cable service for your computer, paper for your fax and ink for the printer, business cards. This is just the basics mind you. This is the bare bones of what you’ll need to begin.

Even if you love your new found freedom and enjoy insurance like I do, the mortgage company doesn’t care: they want their money and since the banking industry is in the shitter and most people are afraid of losing their life savings thanks to that knit whit in the white house scaring Americans AGAIN, and unemployment is at an all time high, nobody is buying anything. I don’t care what anyone on this forum says. Three of my closest friends all lost their jobs within the last month. I’m down to my last $6 that I have in my wallet and that I got from my girlfriend who is a tenured schoolteacher. I have no reason to lie, $6 is all I have. I can’t even afford life insurance and therefore don’t have any. I switched banks because Commerce was 35 miles from my house and I can’t afford that trip anymore. It gets very disheartening very quickly when you’re in a business you love and understand and you get 80 year old grannies on the phone that balk at a $4500 dollar LTC premium. And the bills just keep mounting up at a daily rate and you have to contemplate giving up your indy lifestyle that you trained so hard and for so long to achieve. As you can read, being an Indy, right out of the box is very difficult.

Learn at first by being a captive. If you love what you do, you’ll be able to ignore working weird hours and dealing with cry-babies and superfluous office rules and ridiculous, insurmountable quotas and asinine demands from greedy office owners whose operation was bank-rolled by their mommy and daddy.

Learn and save some money; you’ll need it if you want to branch out on your own –it’s that simple. Some folks here suggest a year’s salary, some folks will or have suggested less, but it’s all the same. You’re going to need working capital to finance your independent lifestyle (above) right away and if you have little ones at home or a $6k a month mortgage, then the answer should be obvious unless you have investors on standby ready to finance your new business.

Some people work better in a structured environment like being a captive, others, like myself don’t. List your weaknesses and strengths and all of your financial obligations. If you begin your new career as a captive, you didn’t lose anything by jumping in as an indy and going broke.

Good luck to you sir.
-Rick

[RayGroupInsurance]

Originally Posted by Crazy Rick

It depends sir, Indy? Captive? Some folks here said it right. With indy, you get all the expenses. And THEY ADD UP VERY QUICKLY. Stationary, leads (at the low end is $13 per lead, per day), basic advertising, gasoline, cable service for your computer, paper for your fax and ink for the printer, business cards. This is just the basics mind you. This is the bare bones of what you’ll need to begin.

Even if you love your new found freedom and enjoy insurance like I do, the mortgage company doesn’t care: they want their money and since the banking industry is in the shitter and most people are afraid of losing their life savings thanks to that knit whit in the white house scaring Americans AGAIN, and unemployment is at an all time high, nobody is buying anything. I don’t care what anyone on this forum says. Three of my closest friends all lost their jobs within the last month. I’m down to my last $6 that I have in my wallet and that I got from my girlfriend who is a tenured schoolteacher. I have no reason to lie, $6 is all I have. I can’t even afford life insurance and therefore don’t have any. I switched banks because Commerce was 35 miles from my house and I can’t afford that trip anymore. It gets very disheartening very quickly when you’re in a business you love and understand and you get 80 year old grannies on the phone that balk at a $4500 dollar LTC premium. And the bills just keep mounting up at a daily rate and you have to contemplate giving up your indy lifestyle that you trained so hard and for so long to achieve. As you can read, being an Indy, right out of the box is very difficult.

Learn at first by being a captive. If you love what you do, you’ll be able to ignore working weird hours and dealing with cry-babies and superfluous office rules and ridiculous, insurmountable quotas and asinine demands from greedy office owners whose operation was bank-rolled by their mommy and daddy.

Learn and save some money; you’ll need it if you want to branch out on your own –it’s that simple. Some folks here suggest a year’s salary, some folks will or have suggested less, but it’s all the same. You’re going to need working capital to finance your independent lifestyle (above) right away and if you have little ones at home or a $6k a month mortgage, then the answer should be obvious unless you have investors on standby ready to finance your new business.

Some people work better in a structured environment like being a captive, others, like myself don’t. List your weaknesses and strengths and all of your financial obligations. If you begin your new career as a captive, you didn’t lose anything by jumping in as an indy and going broke.

Good luck to you sir.
-Rick

Wow, he got way off topic. Let me clear up some of what he mentioned, first of all you can buy leads for much less than $13. I pay $6 for all of my leads, but you can get them even cheaper if you're willing to pick up the phone and do some cold calling on your own. Secondly, this is off topic, Bush is not to blame for the economy right now and we don't have record levels of unemployment. Rick sounds like an angry person that is about to lose his agency he has worked most of his life to build. I feel bad for him, but this is not the place to vent.

I am a captive agent and have been one for 1 year now. I tried to start with Farmers 2 years ago while I was working a full time job, I would sell insurance during the evenings after my regular job. That didn't work out very well for me so I bought an agency from Allstate. As far as I know Allstate is the only Captive company that lets you buy an existing agency, you might want to look into that. In my state you have to have your license for 3 years before you can consider going independent so I am biding my time and doing some research on this forum.

People have mentioned that you have more expenses as an indy and I'd imagine that's true, just know that as a captive you are responsible for many of the things they mentioned. At Allstate I get free yellowbook advertising during my first year only than it's up to me. I pay for my own ink, paper, advertising, leads, postage, etc. If I hit certain goals than the company will give me a bonus in the form of paying 50% of those expenses up to a certain amount each year. I think Farmers had a similar thing where they will give you a certain amount for office expenses if you hit your goals.

I hope that helps, I was very interested to see the responses to your question as this is something I am considering in the next 2-3 years, but most of the answers haven't been too helpful so far.

[Crazy Rick]

"I pay $6 for all of my leads..." -Yeah, and they're shared for that price, explain that to the new guy.

"Bush is not to blame for the economy right now..." -I didn't say he was to blame, I said he was scaring Americans AGAIN.

I'm not about to lose my agency, but thanks for the empathy. I'm just tired of tire kickers and pestering and pestering and pestering and mailing hard copy and convincing the prospects that the prices are fixed only to have prospects refuse to pick up the phone and discuss.

Despite what other agents here say: Yes, they are shopping like it's Walmart. Wouldn't you? I was explaining to the new guy that no amount of proof is going to get some if not most people to buy nowadays when we're all pinching pennies and have to decide between eating or putting that money away for next year's Life Insurance premium.

The shopper's mindset is 95% of the buying public and it really is this simple: "Hmm, ya know, I don't have Health Insurance. So I'm going to go online and click on that banner ad that I saw. I'm sure forty agents will call me soon after so I'll put down a phony phone number, after all, all I want is a ball park figure of what I'm in for and I don't want to talk to anyone and can't really afford it, but I just want to see. Hmm, here it goes. Wow! I was right! Five minutes later, seventeen agents emailed me. Three of which included these attachements called proposals. One premium is for wow! $10,000 a year and the lowest is $6,000 a year, but wait, what's this Daily Benefit thingy? Oh, Long Term Care? What did I click on? Oh well, I can't afford it anyway, I'll just keep these in my desk till I'm older and need it."

With this typical mindset, you can see this is a waste of a prospect and $13. The only way to get a hold of them is via U.S. mail and no amount of convincing will change their mind; they don't even know what product they need! Even if they did, they can't afford it!

"I am a captive agent and have been one for 1 year now. I tried to start with Farmers 2 years ago while I was working a full time job, I would sell insurance during the evenings after my regular job." -This sounds like the way to go. I advised the new guy to check his strengths and weaknesses, maybe he's cut out for being a captive and wouldn't enjoy going broke by chasing down ignorant people from the ghettos of New Jersey who don't even know how to spell the word: Insurance. I don't think he'll enjoy pestering 80 year old grannies via the U.S. mail
Trying to convince them, since they don't have any protection now, a little is better than nothing. Ring, ring, ring. Oh, look at that, her answering machine is on again. What didn't I do correctly? Hmmmm, nothing! Did everything by the book and still get an answering machine after the tenth call. What a waste of another $13 dollars.

"I think Farmers had a similar thing where they will give you a certain amount for office expenses if you hit your goals." -Oh, those insurmountable "goals" we all hear about. Didn't someone above say "He liked to starve" or words to that effect? What does this tell you and the new guy? It's supposed to tell you that the Executives like a rigged game. This is what they do, and they laugh all the way to the bank each evening. The rules are purposely written in their favor. Didn't another guy above say new captives are put in the poverty bowl once they sign on the dotted line. How is this a way to make a living?

I'm not saying there's one correct answer and notice my proper grammar. The new guy has only three choices and starting out in this industry without financial backing isn't the route to take. He may have the finances to go indy, he didn't indicate so. He may work part time at night like you did, which seems the way to go.

Angry? You bet your ass I'm angry. Read my scenario above again and tell me I'm wrong. I know, I know, "Rick, you're going after people that ARE shopping instead of prospects that need coverage right away." I can't stop the shoppers folks. If they need coverage right away, I make so easy for us to hook-up, I may as well be living in their basement with my briefcase and four different proposals at the ready.

It's as simple as the scenario above. You got to give me at least that much.

[djs]

Originally Posted by Reuben

So far no one has mentioned the poverty trap that Farmers' will put their new agents under once they sign on to go "captive" (an apt name in this specific instance.).

Hmm, I've heard of this with State Farm, but never with Farmers. I know several Farmers agents, they don't mention this. Are you sure you have the right company?

Farmers does give 'incentive' money that is effectively a loan that gets waived if you make certain numbers. Outside of that, you have your own expenses, which can be fairly minimal.

Dan
- - - - - - - - - - - - - - - - - -

Originally Posted by Crazy Rick

It depends sir, Indy? Captive? Some folks here said it right. With indy, you get all the expenses. And THEY ADD UP VERY QUICKLY. Stationary, leads (at the low end is $13 per lead, per day), basic advertising, gasoline, cable service for your computer, paper for your fax and ink for the printer, business cards. This is just the basics mind you. This is the bare bones of what you’ll need to begin.

This is true in most P&C captive situations as well. Even as a captive, it is your agency, your company, and therefore, your bills.

Dan

[Crazy Rick]

Yeah, I know, your agency, your bills. Things add up quickly to the point they get out of hand quickly. This is what the new guy must understand. If he doesn't mind working with Miss Daily Period and attempting to reach unobtainable goals every week, then he's cut out for captive. He doesn't want rules and wants to open his office when he feels and take vacations when he feels and has the backing, then indy's the way to go. Unfortunately there's no magic answer and nowadays, financially, everything's a crapshoot. I tried to explain that to him. Like that stupid box of chocolates, you really don't know what you're going to get being an indy, but you can assume, most people will not give him a working phone number and will be shopping.

[LGilmore]

The insurance business.. it sucks and it's the greatest business in the world.. just depends on what day or time it is.

I totally understand Rick's situation and I understand some others. This business has been unusually kind to me as well as harsh.

Ya just try and maintain a balance, not too up or down.

If you are brandnew, I would suggest going captive at first. It is probably the best way to learn the business if you're paying attiention. We learn from good and bad experiences.

Then after a few years (or what ever your time table is) decide if you want to go it alone, or stay inhouse. The good and bad experiences you have as a captive will help you become a better independent if that is your desire. However, I would caution starting out that way.

Use the house(captive) to learn as much as you can. Often the good companies Pay for your training. As an idependent, that becomes your bill. I knowledge I gained in my decade as a captive still helps me a decade later as an idependent.

All that said, you know yourself better than anybody here. Personalities matter sometimes more than company names...

I absolutely hated my first two managers as they were dirty, dirty business people ethics wise. By the time my name carrier got a good manager inplace, I was damaged goods. I no longer trusted the house and when trust is gone it is extremely hard to build it back.

[Crazy Rick]

Damn, well said Gilmore! Couldn't have said it better.
Trying to maintain..... You should be a regular voice of reason.

[RayGroupInsurance]

Rick, I didn't mean to offend you, I just didn't want the new guy to think that this industry totally sucks. There are good and bad days, but overall I love the freedom I have.

New Guy, you definitely need to look into the bonuses that Farmers offers you because I think that if you don't hit your goals that you have to pay them back to the company. If that is the case than I would stay away. I got out of Farmers just before my 1 year mark when I would have graduated to an official agent. I can't remember the names they use but I was the agent in training so I didn't get any bonuses when I was with them.

Rick, I think that going indy is probably the smarter idea if you can bankroll it. I don't have the money right now that's why I chose to finance an Allstate agency. If I stay on target though, my agency will be worth about $150k after 3 years and my loan should be paid off. My plan is to start looking for an indy office that I can buy with that money and get out of the captive game at that point.

As a captive, it does suck having all of your goals shoved down your throat, especially when they want you to sell something (life, commercial, health, etc.) that you don't want to sell. I focus on the home and auto because that's what makes me the most money. They want me to sell more financial stuff because that makes them the most. I can't complain though, I chose to come here and like I said, this job has given me a ton of freedom. You will have to hire a secretary if you want to take vacations though, the companies don't like you closing up shop.

[patch36]

I think it is a 5 year program to become a full fledged Farmers agent and have your loan subsidies repaid if you hit the run to daylight numbers consistently.

I quit well before then and paid the advances and loans back out of my first quarter earnings as an independent.

You will starve at Farmers for at least the first 5 years unless your dad subsidizes you and lets you work his book of business....

[Soaringagent]

Farm town might be good to learn the ropes and get good training.

[strefins]

1o years ago when I started in this business I sat in a room full of, at least 20, recent life insurance exam grads ready to be recruited by Mass Mutual and made into selling machines. Our "motivational" speaker that day made a comment; "In a month there will be only half of you left. In a year, only a handful." He was right.
This industry is not for everyone. It has a lot of great benefits but, I believe, you have to sacrifice to succeed. I enjoy the independent lifestyle. My quotas are set by me. If I don't perform, I don't get paid. I did struggle in the beginning and during that struggle I learned.
Crazy Rick....it's probably about time to get a new job or start selling P&C. That is the beauty of this business. You have so many options. If one side of the industry is not doing well for you, try the other side. Once you are fully licensed then you can offer so much more.

[xrac]

The current economic situation is far from completely played out. When it is all said and done none of us know what the landscape will look like or what will happen in the meantime. In this environment a lot of people are going to lose jobs, lose investments, lose homes and a lot of businesses will fail. The next few months or years may be more difficult ones for all of us. Some agents may fail because of where they are at and how badly the local area is hit. My point is we all need to prepare for the worst, expect the best, work harder than we ever have, and be very wise in our planning and expenditures. If we are changing careers or going from captive to INDY we need to be very through in our preparation and conservative in our financial projections. Now is the not the time for wild hair planning.

[MoonCrowe]

The Farmer's subsidy program is 2 years. The goals are easily hit. If you are an independent, you need to sell more than these goals to survive.

Yes, it isn't for everybody. Yes, being an independent has it's good sides. But if Farmer's is sooo bad, how is it that they are the second largest provider of Auto and Homeonwer's in the country?

Training is what you make of it. Even as an independent you have incentives for production with different companies.

I loved being an independent. Now as I rejoin the market, I find that captive provides me with some things I don't get as an independent, National advertising, a shrinking agency base, Name recognition and a method to sell my book at retirement that is measurable.

[Crazy Rick]

I see. I understand all the factors now. I'm planning way too far into the future. I've been a conservative spender my whole life, now isn't any different. Farmers I think is huge because most people recognize the name. I've been with Amica since '94, I don't want to change, that's why Farmer's is so huge: this mind set. I see now that their goals aren't as difficult to achieve as I thought but I still don't have a liking to a regimented lifestyle; this comes from 20 years working for others and not really earning much and just dealing with it.

I was going to try my hand at Health and Whole Life now until I get my P&C -I'm stuck on some Commercial General Liability areas.

Things aren't as bad as they seem now that I look at it. Time to brush up on my Group plans and maybe that'll work for me too. We'll see.

I know that I like supervising people and I have a record of getting my subordinates motivated to do whatever it is that they do. I know that I want to be in charge of an office or a book of business and to call the shots and have people come to me when they need answers.

It appears I have a long road ahead regarding owning the Farmer's sign and building my team and getting like-minded producers and other personnel on board if this is the direction I take and if it'll work for me. In time I guess.

Too bad these life-changing decisions can't be figured out overnight: I can't stand wasting my time. We'll see though.

Once more unto the breach dear friends. We push on.