Commission Structure? What to Pay my Agents?

[insurance404]

I've been in Insurance for 8 years now in Washington State and now hiring agents to work under my agency.

My primary insurance lines I sell are Life, Disability & Health Insurance.

My main question is what to pay agents that work under my agency? Let me know what you think, as I want to do this right the first time and treat my agents well as I train them and generous commissions...but not pay too much where I dont make any money.

NOTE: With the ACA for Health Insurance, starting Oct 1st I have a lead source that will keep me busy 12 hours a day 6 days a week...so need agents I can send a lead to and they close it. What commission should I pay them?

1. They get a client, they close it. I pay 75% of the commission.
2. I send a lead to them, they close it. I pay them 50% commission.

Is paying them 50% commission ongoing too generous or should I drop it down after the first year to 25%? Keep it the same? OR pay them a flat fee for the first year and keep the business ongoing?

P.S. For Life commissions what % should I pay them? Would keeping it at the standard 55% of premiums be good?

Thank you in advance for the advise!

 

[MINewBeginning]

I've been in Insurance for 8 years now in Washington State and now hiring agents to work under my agency.

My primary insurance lines I sell are Life, Disability & Health Insurance.

My main question is what to pay agents that work under my agency? Let me know what you think, as I want to do this right the first time and treat my agents well as I train them and generous commissions...but not pay too much where I dont make any money.

NOTE: With the ACA for Health Insurance, starting Oct 1st I have a lead source that will keep me busy 12 hours a day 6 days a week...so need agents I can send a lead to and they close it. What commission should I pay them?

1. They get a client, they close it. I pay 75% of the commission.
2. I send a lead to them, they close it. I pay them 50% commission.

Is paying them 50% commission ongoing too generous or should I drop it down after the first year to 25%? Keep it the same? OR pay them a flat fee for the first year and keep the business ongoing?

P.S. For Life commissions what % should I pay them? Would keeping it at the standard 55% of premiums be good?

Thank you in advance for the advise!

I'm in the process of setting up an Life & Health agency and will follow the MLM route.

 

[donamese]

1. They get a client, they close it. I pay 75% of the commission.
2. I send a lead to them, they close it. I pay them 50% commission.

So if I were an independent agent and do all the work, you only take 25%? Why do I need you at all? Are you training? Providing office space? What do I get for the 25% I am giving you?

Depending on the leads you provide, 50% would be a minimum. While you need to earn money, the agent is doing the work. Lets take a final exepense sale of $600 commission...you want $300 for the lead I get $300 for the sale. Most preset appointments are $20-30 per lead, assume 1% return on a 1000 piece mailer for $400 per/k is $40 per lead....you are 7-8 times more expensive. My assumption is you will hand out some aged or used 30x over leads that you got for pennies yet you will still want 50% commission. So again...why would I want to hand you that amount of cash when I can do a lot more on my own?

 

[rousemark]

I've been in Insurance for 8 years now in Washington State and now hiring agents to work under my agency.

My primary insurance lines I sell are Life, Disability & Health Insurance.

My main question is what to pay agents that work under my agency? Let me know what you think, as I want to do this right the first time and treat my agents well as I train them and generous commissions...but not pay too much where I dont make any money.

NOTE: With the ACA for Health Insurance, starting Oct 1st I have a lead source that will keep me busy 12 hours a day 6 days a week...so need agents I can send a lead to and they close it. What commission should I pay them?

1. They get a client, they close it. I pay 75% of the commission.
2. I send a lead to them, they close it. I pay them 50% commission.

Is paying them 50% commission ongoing too generous or should I drop it down after the first year to 25%? Keep it the same? OR pay them a flat fee for the first year and keep the business ongoing?

P.S. For Life commissions what % should I pay them? Would keeping it at the standard 55% of premiums be good?

Thank you in advance for the advise!

When you say 50% and 75% on health.. Are you talking about 50% of YOUR commission rate? If that be the case, you aren't going to keep agents around long unless you are offering tremendous value to them for you half.

 

[djs]

If you have a source of qualified leads that will keep you busy, just hire 'enrollment counselors' for a flat hourly fee and let them go to town.

Bonus to anyone who writes over X amount per week.

If you want to pay commission only, keep in mind you may not get paid till February for business you write in October. Not to many commission only people who are giving up half of the commission they could earn will be happy to wait that long to get paid.

Dan

 

[benefits365]

So if I were an independent agent and do all the work, you only take 25%? Why do I need you at all? Are you training? Providing office space? What do I get for the 25% I am giving you?

Depending on the leads you provide, 50% would be a minimum. While you need to earn money, the agent is doing the work. Lets take a final exepense sale of $600 commission...you want $300 for the lead I get $300 for the sale. Most preset appointments are $20-30 per lead, assume 1% return on a 1000 piece mailer for $400 per/k is $40 per lead....you are 7-8 times more expensive. My assumption is you will hand out some aged or used 30x over leads that you got for pennies yet you will still want 50% commission. So again...why would I want to hand you that amount of cash when I can do a lot more on my own?

Why would you assume someone wants half commission to hand you 75 cent leads? I get it, once bitten twice shy, but to automatically jump the OP assuming he's cheap isn't fair.

I for one am interested in hearing feedback. The question is: what is fair compensation?
So far, he's gotten "just pay flat rate to enrollment agents" and "you probably have crap leads and want half my commission".

Any honest feedback? I don't have any: I'm in a call center. What does everyone else think?

 

[donamese]

Why would you assume someone wants half commission to hand you 75 cent leads? I get it, once bitten twice shy, but to automatically jump the OP assuming he's cheap isn't fair.

I for one am interested in hearing feedback. The question is: what is fair compensation?
So far, he's gotten "just pay flat rate to enrollment agents" and "you probably have crap leads and want half my commission".

Any honest feedback? I don't have any: I'm in a call center. What does everyone else think?

If you read the post, I ask what he is bringing to the table outside of leads that would justify the reduced commissions. If he wants to bring in good agents and retain them, he should probably have the answers to the questions. Without knowing what else he brings to the table how am I suppose to answer his question on what to pay them? If he brings nothing to the table then he shouldn't take any commission from an agent that produced their own lead. If he is only supplying leads, depending on quality and quantity, I would think 20-40% could be taken as an overwrite.

 

[insurance404]

Thank you for the advise, as Im really looking for a good structure for everyone.

1. I will be doing training for several products and keeping everyone up to date on the rules, regulation, compliance and the like.

2. I will be passing on "hot leads" that call my office phone...so they are looking to buy today. Often I don't leave the office until 7PM, so once Oct 1st starts I will literally be losing clients if I dont have someone to pass them to.

3. Dan, I like your idea of paying a flat hourly rate plus a bonus per sale. Then build in bonus structures.

4. I absolutely agree its going to be hard to get someone to wait until February to get paid...

5. Im also going to be feeding them "hot leads" for Life Insurance, so they will make more on that side as well.


= Any other tips or commission structures you have seen work well would be appreciated.