Getting Sick of FE.....

[rousemark]

If you write the same amount of Premium? Here is the problem with that if I write 10 med sups, the AV is $14,400, I will make $12,960 over 3 years (I'm in MI) years 4-6 12%, if I write 10FE I will make maybe $4,500 and about 30% won't make it to month 12, with FE you need to do volume and you need to keep doing it year after year, with Medicare you need to be steady and it will build an income machine, also with Medicare you can X-sell dental, life, cancer,

First of all, who says you can't cross sell those items with FE? Second, if you are loosing 30% of the business before the end of 2 months you are doing something wrong. JD writes a good sized volume of FE (more than most) and I believe he stated on the forum that he has about 90% persistency with his primary carrier. And, believe me, the day you quit writing med supps, you will be surprised just how quickly that income flow will drop..I have been there, done that, got the tee shirt.

 

[Todd King]

First of all, who says you can't cross sell those items with FE? Second, if you are loosing 30% of the business before the end of 2 months you are doing something wrong. JD writes a good sized volume of FE (more than most) and I believe he stated on the forum that he has about 90% persistency with his primary carrier. And, believe me, the day you quit writing med supps, you will be surprised just how quickly that income flow will drop..I have been there, done that, got the tee shirt.

I don't understand your comparison Louis. Hockey's example is for MI, so it's not the norm. But you will start making more on that Med Supp at about the 2 1/2 year mark than you ever will on that FE policy.

Average FE policy is $50 per month or $600 per year. If you're on 110% that's $660 you just made for the year. If you have a 7% renewal that's $3.50 per month or $42 per year. So let's take this out 3 years. $660+$42+42=$744 over 3 years.

Average Med Supp (I think this is a little low) at $120 per month or $1440 per year. $1440 X 20% (sometimes higher) = $288 per year. $288 X 3 years = $864.

By my example, I just don't see where you're coming up how a person can make more money long term in FE. The spread just keeps getting bigger the longer you go.

 

[hockeyday]

First of all, who says you can't cross sell those items with FE? Second, if you are loosing 30% of the business before the end of 2 months you are doing something wrong. JD writes a good sized volume of FE (more than most) and I believe he stated on the forum that he has about 90% persistency with his primary carrier. And, believe me, the day you quit writing med supps, you will be surprised just how quickly that income flow will drop..I have been there, done that, got the tee shirt.

I'm not JD, you should buy some FE leads and go work it, Med Sups sticks on the books for years, FE for me does not , others may be different

 

[rousemark]

I don't understand your comparison Louis. Hockey's example is for MI, so it's not the norm. But you will start making more on that Med Supp at about the 2 1/2 year mark than you ever will on that FE policy.

Average FE policy is $50 per month or $600 per year. If you're on 110% that's $660 you just made for the year. If you have a 7% renewal that's $3.50 per month or $42 per year. So let's take this out 3 years. $660+$42+42=$744 over 3 years.

Average Med Supp (I think this is a little low) at $120 per month or $1440 per year. $1440 X 20% (sometimes higher) = $288 per year. $288 X 3 years = $864.

By my example, I just don't see where you're coming up how a person can make more money long term in FE. The spread just keeps getting bigger the longer you go.

I am basing it on premium and you are basing it on policy count.. I said, if "premium is equal." I tend to think in terms of higher renewals than that for the average plus you are not taking into account the time value of the money. Guess it is the old, bird in hand worth two in the bush advice of the old days.

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I'm not JD, you should buy some FE leads and go work it, Med Sups sticks on the books for years, FE for me does not , others may be different

Will admit to not having worked FE leads to any extent but I am considering it and that is why I was asking questions about it. I am starting to feel too old to get out and prospect. I did work the med supp market for years.. Have a lot more life cases still on the books from those days than med supp as most of the med supp clients have died off. (Have more cancer cases than any but that is another subject). However, all this has nothing to do with my statement that "if the premium sold is equal", there is more income in the FE. I will stand by that. Now as to which product is easier to use to produce the desired premium is an entirely different discussion.

 

[Todd King]

I am basing it on premium and you are basing it on policy count.. I said, if "premium is equal." I tend to think in terms of higher renewals than that for the average plus you are not taking into account the time value of the money. Guess it is the old, bird in hand worth two in the bush advice of the old days.

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Will admit to not having worked FE leads to any extent but I am considering it and that is why I was asking questions about it. I am starting to feel too old to get out and prospect. I did work the med supp market for years.. Have a lot more life cases still on the books from those days than med supp as most of the med supp clients have died off. (Have more cancer cases than any but that is another subject). However, all this has nothing to do with my statement that "if the premium sold is equal", there is more income in the FE. I will stand by that. Now as to which product is easier to use to produce the desired premium is an entirely different discussion.

Okay, I'll buy that "if" the premium is equal it would take longer for the Med Supp to start paying more, but let's get realistic. How many $120+ FE policies are you going to sell each and every week?

 

[rousemark]

Okay, I'll buy that "if" the premium is equal it would take longer for the Med Supp to start paying more, but let's get realistic. How many $120+ FE policies are you going to sell each and every week?

Again, we are talking about overall.. not individual sales. Yeah to keep the premium equal, you are going to have to produce more apps with FE than MS but you also have a broader prospect base. People under 65 are FE prospects.. People locked into their MAs are FE prospects.. People with Medicaid are FE prospects.. I haven't found the competition is as intense with the FE market. I seldom talk to people that do not have either an MA, MS or Tenncare. I do come across people that have no burial" plan or life insurance. Also, FE does not seem to be almost purely premium driven as does the med supp.. To keep the MS renewal coming in over the long term, you will have to roll your business.

 

[Todd King]

Again, we are talking about overall.. not individual sales. Yeah to keep the premium equal, you are going to have to produce more apps with FE than MS but you also have a broader prospect base. People under 65 are FE prospects.. People locked into their MAs are FE prospects.. People with Medicaid are FE prospects.. I haven't found the competition is as intense with the FE market. I seldom talk to people that do not have either an MA, MS or Tenncare. I do come across people that have no burial" plan or life insurance. Also, FE does not seem to be almost purely premium driven as does the med supp.. To keep the MS renewal coming in over the long term, you will have to roll your business.

Okay, I better understand where you're coming from. I still don't think there is a lack of people to see in the Medicare market though. It's not like you can see them all in either market. You get double the returns from Med Supp Mailers than you do FE mailers, so if you follow that logic you are going to sell twice as much Med Supp than you would FE. Of course, this will depend on the area you are in. In TN, it might be a tougher market for the Supps than for MA, but it's still the Medicare market.

Nonetheless, this is the very reason I say that if you are doing one market you should have the other "market" in your bag ready to cross-sell. You'll sell more FE to Med Supp clients than you will the other way around though.

 

[rousemark]

Okay, I better understand where you're coming from. I still don't think there is a lack of people to see in the Medicare market though. It's not like you can see them all in either market. You get double the returns from Med Supp Mailers than you do FE mailers, so if you follow that logic you are going to sell twice as much Med Supp than you would FE. Of course, this will depend on the area you are in. In TN, it might be a tougher market for the Supps than for MA, but it's still the Medicare market.

Nonetheless, this is the very reason I say that if you are doing one market you should have the other "market" in your bag ready to cross-sell. You'll sell more FE to Med Supp clients than you will the other way around though.

I guess cross selling dental to the FE market is out of the question..

 

[HoosierLife]

There is no doubt that final expense is a grind. Well we all know Medicare has better renewals and is good for long-term income streams, it is going to be difficult to pay your bills starting off with just Medicare.

Final expense allows you to make it good to great income. Now I don't mind the grind, because I can't imagine sitting on the phone trying to sell Medicare all day long.

With that said, I would jump through all the hoops to sell Medicare advantage and I can already see how beneficial that's going to be. I'm able to sell or AOR 2 to 3 advantage plans a week working the same file expense leads that I was already working.

If that stays consistent, then that will add $20-$30,000 and renewals a year. So now I get the benefits of the Medicare renewal income without the loss of the upfront big commissions from final expense.

Seems like a win-win to me.

 

[Todd King]

There is no doubt that final expense is a grind. Well we all know Medicare has better renewals and is good for long-term income streams, it is going to be difficult to pay your bills starting off with just Medicare.

Final expense allows you to make it good to great income. Now I don't mind the grind, because I can't imagine sitting on the phone trying to sell Medicare all day long.

With that said, I would jump through all the hoops to sell Medicare advantage and I can already see how beneficial that's going to be. I'm able to sell or AOR 2 to 3 advantage plans a week working the same file expense leads that I was already working.

If that stays consistent, then that will add $20-$30,000 and renewals a year. So now I get the benefits of the Medicare renewal income without the loss of the upfront big commissions from final expense.

Seems like a win-win to me.

Agreed.

When you first start out with Med Supps, you best be doing some FE cross-selling to pay for your leads if you want to survive the first couple of years, that's for sure!