Am I Being Screwed?

[glang1992]

I am about take my Property & Casualty licensing test. I am going to be a producer for Allstate when I finish. I am just curious if I am getting the real bad end of the deal.

First of all, I am new to the insurance industry (clearly). And I am not too familiar with the general pay structure. My question is to whether or not I am really getting a bad deal.

First, my salary is $400 a week for 3 weeks. Week 4 is $400 salary + commissions. The commission scale is: 5k-10k - 3%, 10k-15k - 6%, 15k-20k - 8%, 20k-25k - 11%, 25k-30k - 14%, 30k+ 17%.

The real shaky part is that he wants me to file as a 1099, so I am getting no benefits, no chance of unemployment, no part of my taxes paid by my employer. I have read online that 1099 workers should save 40% of their weekly pay for taxes, which will take me almost broke if that is true.

So, my question to all of you experienced people is. How bad of an idea is this?

 

[Josh]

It's not a bad deal. It might not be a good fit for you, it's certainly not a good deal for everyone, but for some folks it would be a great deal.

Saving 40% for taxes at that level would be absurd. If you're saving even 20% you'd probably be fine because what you'll be getting paid is so low. If you're really afraid of that you might want to take a look at getting an hourly job. Odds are you'll make well above $10/hour, but probably never more than $20/hour. If you think you can get more than that at a w2 job and don't want the hassle, I'd go for it.

 

[DHK]

I don't have any P&C experience. I can't tell you if that's a good or bad deal. From my limited understanding, you need experience in that field before all your 'really good' options can open up for you.

If you really like P&C, and you can see yourself with a future in it, then you need to bite the bullet, get licensed, take an offer, put your head down, and go to work. Don't look up for at least 18 months (longer is better) once you have some experience and some documented sales production under your name. Then you can see what else is out there.

 

[EugeneM]

Why allstate is my only question?

You think you could work out a deal with a local independent? They are always looking for producers.

Sorry if its a little off topic.

 

[smokin goose]

Yes

By the way, I didn't read past the thread title.

 

[xrac]

Allstate is a tough gig for the agents and probably will never be a really lucrative position.

 

[Josh]

Allstate is a tough gig for the agents and probably will never be a really lucrative position.

I keep seeing you say that, but there are plenty of Allstate agents that couldn't disagree with you more.

 

[xrac]

I keep seeing you say that, but there are plenty of Allstate agents that couldn't disagree with you more.

Not the ones I have talked with or what I have read.


Onswipe

Allstate agents make 9% but don't independents make 12-15%?

 

[Josh]

Not the ones I gave talked with or what I have read.


Onswipe

I believe you. That said, I've talked to tons of agents that do well with it and love it.

 

[RicFlairII]

I was an Allstate agent for 25 years. I do not think that is a good deal
for the OP.

If you sell at those levels, you are giving too much back to the Allstate
agent and not getting enough for yourself.

The only way I would do that deal is if you are doing it for the training.
If you think that is the case, it might be an option. Otherwise it is a
horrible decision, IMO.