How Do Non-advance Commissions Work?

[PittAgent]

I'm new (2.5 months) to being independent and only experienced LH advances and "pay thru" so I really don't know how other insurance companies pay the non-advanced commissions. If you get a 9 month advance do they pay months 10-12 "as earned" every month or do it some other way?

 

[tins]

Give Todd King a call.
Final Expense Contracts | Life Insurance Agent Contract
You won't find a better FE upline!!

 

[PittAgent]

Give Todd King a call.
Final Expense Contracts | Life Insurance Agent Contract
You won't find a better FE upline!!

He is my upline. I just wanted a quick answer if someone had one.

 

[JimmyUt]

As earned months 10 through death or until they cancel. Months 13 and beyond at the renewal rates, and 10-12 at first year %

 

[tins]

It's company specific. Most will just pay monthly once the advanced months finish.

 

[PittAgent]

As earned months 10 through death or until they cancel. Months 13 and beyond at the renewal rates, and 10-12 at first year %

Thanks. I am considering going to 6 month advance on everything. I read Newby's posts about why it is a good idea and as long as I get as earned months 7-12 then renewals I think I can hedge my chargebacks while building a nice steady income every month. Do most people do 6 or 9 month advance?

 

[JimmyUt]

That all depends on sustainability. I do 6 months or less, but I have other renewal income. Many do 9 months and I did the same when I was with Equita. My suggestion is 6 months if you can make it work financially. Once the as earned kicks in you will be ok.

 

[TwiLight]

Now it has been 25 years since I was advanced commissions, and I always used a commission/salary bucket approach.

Here is how it worked. Now back then everything was underwritten so this quick issue stuff today usually took 4-8 weeks to issue just like full underwriting is now. We also had to mail apps to the Home Office.

Anyway.... it is a simple approach, Create a bucket or money market account that all commissions/Advances are deposited and charge backs are paid from if you have to write a check back to the company.

Do not touch the money for 3 months. on the 14th week, begin to pay yourself a salary or LLC/Distribution of 8% of the total amount of the bucket per week. Also withdraw 2.0% and deposit it into a business account for business expenses which includes purchasing leads, office/phone, E&O, CE, Books/Training/Seminars, Staff Salaries and Employer SocSec Taxes (agent included) and any State Unemployment/Work comp (depending on State) essentially spending 10% of your bucket. each week.

Example bucket. This requires you to not use commissions at all for the first 3 months. Selling insurance is a business and you must set aside funds to invest in this business. Be sure you have all expenses saved for 3 months + any extra weeks needed for training and trial/error + lead costs. The 3 months begins after you have already cut your teeth and are ready to go for it.

Keep this up for one Year and re-evaluate it. What will happen is, if you had a good year your bucket should have doubled/tripled from the date you started drawing on it. This also means your Draw/salary each week went up as the bucket grew.

This is where you make a decision to cut your advance from 9 to 6 months and continue the same thing for another 9 months. At this point you have been in the business for 2 years and are continuing to be successful. The main reason you are successful is that you never worried from week to week about money. You had a steady income to pay the bills and keep the wife and kids happy. When you don't think about your weekly income you have an easy time selling.

At the beginning of the 2nd year, you go as earned with all your carriers except your GO TO company where you write the majority of your business. You still deposit the As Earned money into your bucket and continue your draws for another 6 months. At this time, if your GO TO company has a 3 month advance change it to that for another 6 months.

At the end of year three, Every Carrier is As Earned. Still using the bucket approach to pay yourself.

Now at any time you have a fantastic week... Made $10k on a SPWL or Annuity or sold a large Target Prem Case. DO NOT SPEND IT WHEN ISSUED. Simply deposit it in the bucket. You will be thankful when it is time to take the 4 weeks of vacation time Insurance agents seem to take and you will be glad the bucket was a little over funded.

I Hope this helps some of you new guys out there. I did this when I was 28 and just started out as an Independent Producer after working with MetLife for 4 years. I learned this method through them and it worked perfectly for 50% commissions. It is even better now for the Street Agent at 100-115%.

As new agents, you will find there are always 2 sides to insurance. The Selling/prospecting side and the business side. You have to take responsibility for both sides or you will fail in this business.

 

[smokin goose]

Now it has been 25 years since I was advanced commissions, and I always used a commission/salary bucket approach.

Here is how it worked. Now back then everything was underwritten so this quick issue stuff today usually took 4-8 weeks to issue just like full underwriting is now. We also had to mail apps to the Home Office.

Anyway.... it is a simple approach, Create a bucket or money market account that all commissions/Advances are deposited and charge backs are paid from if you have to write a check back to the company.

Do not touch the money for 3 months. on the 14th week, begin to pay yourself a salary or LLC/Distribution of 8% of the total amount of the bucket per week. Also withdraw 2.0% and deposit it into a business account for business expenses which includes purchasing leads, office/phone, E&O, CE, Books/Training/Seminars, Staff Salaries and Employer SocSec Taxes (agent included) and any State Unemployment/Work comp (depending on State) essentially spending 10% of your bucket. each week.

Example bucket. This requires you to not use commissions at all for the first 3 months. Selling insurance is a business and you must set aside funds to invest in this business. Be sure you have all expenses saved for 3 months + any extra weeks needed for training and trial/error + lead costs. The 3 months begins after you have already cut your teeth and are ready to go for it.

Keep this up for one Year and re-evaluate it. What will happen is, if you had a good year your bucket should have doubled/tripled from the date you started drawing on it. This also means your Draw/salary each week went up as the bucket grew.

This is where you make a decision to cut your advance from 9 to 6 months and continue the same thing for another 9 months. At this point you have been in the business for 2 years and are continuing to be successful. The main reason you are successful is that you never worried from week to week about money. You had a steady income to pay the bills and keep the wife and kids happy. When you don't think about your weekly income you have an easy time selling.

At the beginning of the 2nd year, you go as earned with all your carriers except your GO TO company where you write the majority of your business. You still deposit the As Earned money into your bucket and continue your draws for another 6 months. At this time, if your GO TO company has a 3 month advance change it to that for another 6 months.

At the end of year three, Every Carrier is As Earned. Still using the bucket approach to pay yourself.

Now at any time you have a fantastic week... Made $10k on a SPWL or Annuity or sold a large Target Prem Case. DO NOT SPEND IT WHEN ISSUED. Simply deposit it in the bucket. You will be thankful when it is time to take the 4 weeks of vacation time Insurance agents seem to take and you will be glad the bucket was a little over funded.

I Hope this helps some of you new guys out there. I did this when I was 28 and just started out as an Independent Producer after working with MetLife for 4 years. I learned this method through them and it worked perfectly for 50% commissions. It is even better now for the Street Agent at 100-115%.

As new agents, you will find there are always 2 sides to insurance. The Selling/prospecting side and the business side. You have to take responsibility for both sides or you will fail in this business.

I'm new. Thanks for sharing

 

[Iwillpay]

Now it has been 25 years since I was advanced commissions, and I always used a commission/salary bucket approach.

Here is how it worked. Now back then everything was underwritten so this quick issue stuff today usually took 4-8 weeks to issue just like full underwriting is now. We also had to mail apps to the Home Office.

Anyway.... it is a simple approach, Create a bucket or money market account that all commissions/Advances are deposited and charge backs are paid from if you have to write a check back to the company.

Do not touch the money for 3 months. on the 14th week, begin to pay yourself a salary or LLC/Distribution of 8% of the total amount of the bucket per week. Also withdraw 2.0% and deposit it into a business account for business expenses which includes purchasing leads, office/phone, E&O, CE, Books/Training/Seminars, Staff Salaries and Employer SocSec Taxes (agent included) and any State Unemployment/Work comp (depending on State) essentially spending 10% of your bucket. each week.

Example bucket. This requires you to not use commissions at all for the first 3 months. Selling insurance is a business and you must set aside funds to invest in this business. Be sure you have all expenses saved for 3 months + any extra weeks needed for training and trial/error + lead costs. The 3 months begins after you have already cut your teeth and are ready to go for it.

Keep this up for one Year and re-evaluate it. What will happen is, if you had a good year your bucket should have doubled/tripled from the date you started drawing on it. This also means your Draw/salary each week went up as the bucket grew.

This is where you make a decision to cut your advance from 9 to 6 months and continue the same thing for another 9 months. At this point you have been in the business for 2 years and are continuing to be successful. The main reason you are successful is that you never worried from week to week about money. You had a steady income to pay the bills and keep the wife and kids happy. When you don't think about your weekly income you have an easy time selling.

At the beginning of the 2nd year, you go as earned with all your carriers except your GO TO company where you write the majority of your business. You still deposit the As Earned money into your bucket and continue your draws for another 6 months. At this time, if your GO TO company has a 3 month advance change it to that for another 6 months.

At the end of year three, Every Carrier is As Earned. Still using the bucket approach to pay yourself.

Now at any time you have a fantastic week... Made $10k on a SPWL or Annuity or sold a large Target Prem Case. DO NOT SPEND IT WHEN ISSUED. Simply deposit it in the bucket. You will be thankful when it is time to take the 4 weeks of vacation time Insurance agents seem to take and you will be glad the bucket was a little over funded.

I Hope this helps some of you new guys out there. I did this when I was 28 and just started out as an Independent Producer after working with MetLife for 4 years. I learned this method through them and it worked perfectly for 50% commissions. It is even better now for the Street Agent at 100-115%.

As new agents, you will find there are always 2 sides to insurance. The Selling/prospecting side and the business side. You have to take responsibility for both sides or you will fail in this business.

This is an excellent way to discipline your self and regulate your commission advances.