Referral Fees/commission Splits

[lifeagent87]

I was thinking about getting connected with property casualty insurance agents to get some referrals from them. If they do not have a life agent license can I legally give them monetary compensation for referrals?

If somebody has a life agent license it should be no problem to do either a finder's fee or commission split right?

Do you just write a personal check or do you have to 1099 them?

Appreciate the help.

 

[Josh]

I always 1099 folks.

 

[Frank Stastny]

I was thinking about getting connected with property casualty insurance agents to get some referrals from them. If they do not have a life agent license can I legally give them monetary compensation for referrals?

If somebody has a life agent license it should be no problem to do either a finder's fee or commission split right?

Do you just write a personal check or do you have to 1099 them?

Appreciate the help.

I did that a number of years ago. He sent out a letter to all of his clients introducing me. He also gave me his entire client list, we developed a very trusting relationship.

I gave him 50% of first year commissions and I kept all renewals. It was a win win situation for both of us. I provided a valuable service for his clients and made money in the process. He was tickled and so was I.

I contacted his clients about Med Supps, that's all. He didn't want to "mess" with that product. It was a "gold mine" for me. He sold the agency to a real "dick".

 

[Guest]

I do that, I only write P&C....but I still ask about life and health etc, and say, here, call my expert for that product.

you cant pay any commission unless they are licensed, but you can pay a referral to anyone....

I also tell my life/health person, if someone is questioning if they can afford their product, have them call me, maybe we can save them enough money to afford their product and its a win win win all around, I get policies, my buddy gets policies and client gets what they need.

 

[AndreaSti]

We tried P&C in our office with an employee, then a different employee, with mixed results and lots of headaches. Had to get rid of the employee because of commission cuts. I have my P&C license but I am very green (don't want THAT E&O issue) so now we are partnering with an agency that has better contracts, more experience, and they don't like health and life (or Medicare) so we share back and forth. Best decision we ever made to partner with them. We have known them forever too which helps.

We also get referrals from agents who don't want to mess with Medicare. We split commission, usually 25% first year. We keep the renewals.

 

[eclipsed]

You know, I was wondering the same thing. I was going to talk to some car dealers in my area to see if they can refer their customers to me when they sell a car with a loan attached to it. I would sell their customers a term (with return of premium) policy for the amount of years it will take them to pay off their house, car, and whatever else.

In return I would give the salesman who recomended me a $200 check or 25% of my commission from the sale, whichever is more. Since I'm not directly paying them my commission, is this legal?

Also has anyone else done anything like this and had success?

 

[VolAgent]

You know, I was wondering the same thing. I was going to talk to some car dealers in my area to see if they can refer their customers to me when they sell a car with a loan attached to it. I would sell their customers a term (with return of premium) policy for the amount of years it will take them to pay off their house, car, and whatever else.

In return I would give the salesman who recomended me a $200 check or 25% of my commission from the sale, whichever is more. Since I'm not directly paying them my commission, is this legal?

Also has anyone else done anything like this and had success?

If the payment of the referral fee is contingent on a sale occuring, that would be splitting commissions according to the TN DOI. Check with your state DOI and see what their take is.

To be kosher, you'd need to pay everyone the same, regardless of the size of the sale or if a sale even occurred.

 

[BTFuzz]

You know, I was wondering the same thing. I was going to talk to some car dealers in my area to see if they can refer their customers to me when they sell a car with a loan attached to it. I would sell their customers a term (with return of premium) policy for the amount of years it will take them to pay off their house, car, and whatever else.

In return I would give the salesman who recomended me a $200 check or 25% of my commission from the sale, whichever is more. Since I'm not directly paying them my commission, is this legal?

Also has anyone else done anything like this and had success?

My guess is no since you are paying an unlicensed salesman a referral fee. Reward the act of referring, not the actual referral and as stated above, do the same for everyone.

 

[lifeagent87]

Hi Red Blooded. Do you mind if I ask how you are being compensated for referrals? 1099, cash, gift certificates, etc., 50% first year commissions?
- - - - - - - - - - - - - - - - - -
Hi Frank Stastny. Did you 1099 the 50% first year commission or was it just cash?

 

[Guest]

Hi Red Blooded. Do you mind if I ask how you are being compensated for referrals? 1099, cash, gift certificates, etc., 50% first year commissions?
- - - - - - - - - - - - - - - - - -
Hi Frank Stastny. Did you 1099 the 50% first year commission or was it just cash?

They usually just give me cash, but I am Licensed in P&C and also L&H, so really, how ever they chose to pay me I dont really care.......