Mortgage Protection Vs Final Expense

[pcbinsurance]

On average, FE pays the highest commission. FE also has the higher % of charge backs between those two niches.

Both are about equally simple to learn.

 

[Arookaria]

Thank you PCB. Is there an organization or association that can help a brand new agent with training and product knowledge specific to MP and the MP market so I can start independent?

 

[pcbinsurance]

Sure there are, but, depending on your marketing of MP and how many States you are licensed in, I feel like FE is where you should focus your attention. MP was a hot market in the 2000s but today it is just another reason to get 20-30 yr term life insurance.

I would avoid those organizations out there that advertise on Craigslist and say they send out millions of letters weekly to homeowners. These are the ones that will pay you 40-50% commission and make you pay for leads.

 

[HoosierLife]

Sure there are, but, depending on your marketing of MP and how many States you are licensed in, I feel like FE is where you should focus your attention. MP was a hot market in the 2000s but today it is just another reason to get 20-30 yr term life insurance.

I would avoid those organizations out there that advertise on Craigslist and say they send out millions of letters weekly to homeowners. These are the ones that will pay you 40-50% commission and make you pay for leads.

What is the difference between MP and Term? Is MP just decreasing term?

 

[cpete1993]

MP is just a concept to identify a term insurance product. Sometimes it's a decreasing term, but most often it is a level term with a return of premium rider (ROP), which means they get their money back at the end of the term, should they not die. The ROP can also be used to pay down or payoff the mortgage early.

 

[Arookaria]

Sure there are, but, depending on your marketing of MP and how many States you are licensed in, I feel like FE is where you should focus your attention. MP was a hot market in the 2000s but today it is just another reason to get 20-30 yr term life insurance.

I would avoid those organizations out there that advertise on Craigslist and say they send out millions of letters weekly to homeowners. These are the ones that will pay you 40-50% commission and make you pay for leads.

I like the idea of selling FE. I see how its a much needed product for a growing market. But when I read some of the horror stories on here of going broke from chargebacks it makes me think twice if this is where I should start. Is it possible to take all commissions "as earned" or is this frowned upon by the insurers? It sounds like some of the best FE products can have be chargebacks up to two year after sale. This is just what I've read on here and on some other sites. Thank you very much for the advice.

 

[pcbinsurance]

Many successful agents take "as earned" commissions. If you can swing it financially, that would be best.
50% advance would be another option that shouldn't get you in too much trouble if you manage it properly.

 

[VolAgent]

I like the idea of selling FE. I see how its a much needed product for a growing market. But when I read some of the horror stories on here of going broke from chargebacks it makes me think twice if this is where I should start. Is it possible to take all commissions "as earned" or is this frowned upon by the insurers? It sounds like some of the best FE products can have be chargebacks up to two year after sale. This is just what I've read on here and on some other sites. Thank you very much for the advice.

Any life product can be charged back in the first two years if it is rescinded. As earned versus advanced won't make a different at all. You will be giving back everything you received on that policy in that case.

There is nothing wrong with taking advances, particularly when you are new. The key is to make sure you write quality business. Don't strongarm people or sell them more than they can afford. Also, when you get NSFs be proactive and fix it. If you do that, chargebacks will be the exception and not the rule. They will still happen and they happen more frequently and are more painful when you start, but it still happens later on.

Also, term people lapse quite frequently. The 30 year old buying just a small term policy is probably your future FE prospect. Same mentality, just younger.

 

[pcbinsurance]

"Any life product can be charged back in the first two years if it is rescinded."
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In your estimation, what percentage of all life products get "rescinded" in the first two years?

 

[VolAgent]

"Any life product can be charged back in the first two years if it is rescinded."
*****************
In your estimation, what percentage of all life products get "rescinded" in the first two years?

It certainly varies by line. Ordinary life, 1 in 1000, maybe less? FE would have to be higher, maybe 2-5% at most. Those GI policies with two year chargebacks aren't rescinded. But just guessing, maybe 10-20% trigger a chargeback due to early death.

Of course all of those are just guesses based on what I know and what I've learned. The GI is the one I am probably the most inaccurate on. You have to assume there are a fair number of deaths in the first two years, but a number have to live for many years in order to make the product profitable for the carrier.