Well, depending on who you ask, GAs and MGAs are either a necessary and helpful part of the insurance business or the Unholy Spawn of the Evil Lord Himself.
With health insurance, it's often possible to contract directly with an insurance company (say, for instance, Humana). If you contract directly with a company, then you've never got to worry about anyone but that company paying you (there's no middleman in between you and your paycheck), but you'll lose out on any support a
GA might offer. With some health companies (again, let's use Humana) it's impossible to get advanced directly - but you can get an advance if you go through a
GA.
On the life side, your options are more limited - there are fewer companies that will allow you to appoint directly with the carrier. You'll frequently find yourself going through a
GA/
MGA to get appointed, because life insurance carriers (in many cases) won't allow direct appointments without several million dollars in annual premium. Commissions are usually more flexible on the life side, too - you can often take lower commissions in return for more support, or accept higher comp but accept that you'll be getting less hand-holding. Shameless plug alert: you could, of course, get training and support through our organization, leaving you free to get the best contracts out there.
By the way:
GA: General Agent
MGA: Managing General Agent
BGA: Brokering General Agent
IMO: Insurance Marketing Organization
FMO: Field Marketing Organization
These are the five big ones you'll run into. From the perspective of an agent, a
GA/BGA/
MGA is just someone who has high enough contracts to support recruiting other agents (confusingly, many life companies refer to their street level contracts as
GA level). An
IMO/
FMO is a large organization like Next Generation Financial Group that has direct appointments with carriers and can contract you under those direct contracts (they achieve this by having a large agent base - aggregating their production helps them achieve that high level of premium necessary to get those contracts).
Things to always ask when you're shopping GAs/MGAs/IMOs:
1.
What's your release policy? The answer should always be "immediate and upfront." If your relationship with your upline goes south, you want to make sure you've got an immediate way out.
2.
Who owns the business? When you submit a policy, be it life or health, are you listed as the agent on the policy or is "
IMO Whatever" listed as the agent? If it's not your name on the dotted line, then you're leaving yourself open to be taken advantage of.
3.
Do you require assignment of commissions? There are a few circumstances under which assignment is okay, or even necessary. However, if commissions are assigned as a blanket rule...things are fishy.
4.
Where will my check come from? The previous question will answer this, but always verify by asking it this way. Will you be paid by the
IMO/
MGA, or from the carrier?
5.
What support and training do you offer? If you've got an underwriting question, can you call your
IMO/
MGA directly, or do you need to call your companies? Will they scrub your apps for you? Do they offer any product or sales training?
Lots of people would say to ask about free lead programs - but in my estimation, free leads are worth less than what you pay for them. Not only that, but nine times out of ten the commission hit for those "free" leads eats up the cost of producing them yourself, anyway.
As far as recommending an
IMO/
MGA, shameless plug alert number two, I think the ILIAA (
Independent Life Insurance Agent Association - ILIAA) has a great thing going for life. On the health side, Health Choice One is very popular around here.
GA and MGA, What's the Definition and Who is a Good One?
Thanks, Nick, for the clarification.
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