Am I Getting Screwed Through Commission?

[LifeWorth]

I'm captive for a general agency in Georgia that is contracted with Humana. All our health sales are Humana. So far so good. However, I try to do a lot of life sales, and the commission for life is the same as for health! The GA takes HALF of the commission. For health business, I can kind of understand. The GA provides the office, he provides the leads, he provides the Humana name, etc etc. However, why the hell should the GA receive HALF of my commission for a life sale when the GA does NOTHING, absolutely NOTHING to generate this business? It's not him going door to door, or cold calling. Or even buying any type of leads at all.

I'm the one out there hustling and prospecting to make a sale, just to have HALF the commission taken away?

Let's say a life company pays 80% commission. Annual commissionable premium on a sale is $1,000. So, the life company would pay out $800. I'd receive $400, and the GA would receive $400.

Is this a bad deal or what?

The messed up part is that ALL of his other agents are either old dinosaurs, or really lazy guys who just sit in the office or at home waiting for the phone to ring. They do not try to generate any business at all. You'd think the GA would give some incentive to the only agent actually freaking working.

 

[goillini52]

I'm captive for a general agency in Georgia that is contracted with Humana. All our health sales are Humana. So far so good. However, I try to do a lot of life sales, and the commission for life is the same as for health! The GA takes HALF of the commission. For health business, I can kind of understand. The GA provides the office, he provides the leads, he provides the Humana name, etc etc. However, why the hell should the GA receive HALF of my commission for a life sale when the GA does NOTHING, absolutely NOTHING to generate this business? It's not him going door to door, or cold calling. Or even buying any type of leads at all.

I'm the one out there hustling and prospecting to make a sale, just to have HALF the commission taken away?

Let's say a life company pays 80% commission. Annual commissionable premium on a sale is $1,000. So, the life company would pay out $800. I'd receive $400, and the GA would receive $400.

Is this a bad deal or what?

I think you already know the answer to your question.

 

[thomasm]

If you're out there cold calling and generating your own life leads, and producing, then yes, sounds like your getting ripped!

If your writing life from the Humana leads he's providing than maybe it's not as bad of a deal.

 

[LifeWorth]

If you're out there cold calling and generating your own life leads, and producing, then yes, sounds like your getting ripped!

If your writing life from the Humana leads he's providing than maybe it's not as bad of a deal.

Like my post said, none of my life business is in any way shape or form helped at all by anything the GA does, at all. Nada. Zilch. Without me generating and writing the business his agency would never have the life business I'm writing.

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I think you already know the answer to your question.

So what do I tell the GA? I already brought this up and his answer was an annoyed "it's how it's always been for the past 30 years. I can't change the commission plan for one agent".

That may be true, but what's also true is that until I came along there was no agent generating life business. The life business in the agency came here and there once in a blue moon. The agents are the stereotypical lazy agents who sit waiting for the phone to ring. Any life sales they ever made was a side order for a health client, like mcdonalds burger with a side order of fries.

Until I came along this agency has not had a prospector. I'm a prospector with MDRT in his goals. I'm a life insurance agent first, geared towards the financial services and MDRT, but am working in an agency with a health insurance peddling mindset.

 

[thomasm]

A lot of the MRDT's seem to come from the big mutuals. New York Life, Northwestern Mutual, etc. If MRDT is your goal that would the way to go!

Or if you just want to be independent, find a good IMO.

Independent Life Insurance Agent Association

 

[DHK]

You're in the right seat on the wrong bus.

You should look for either:

a) captive agency with a comp/bonus plan for good life sales

b) buy E&O and get independent contracts... knowing that you're responsible for your own ongoing training.

With your discouragement in the other thread, and probably having some pressure from your spouse, having a "home office" may not work out for you. Having an agency that will pay (bill you) for your office and E&O, I'd probably look into the captive agency, such as Metlife, Mass, Guardian, NYL, Northwestern Mutual, Mutual of Omaha, etc.

Metlife pays a salary for your first 19 weeks (as high as $1,300/week if I remember correctly)... so that can be a REAL benefit when you're just getting going.

 

[Norwayguy]

Question are your commissions assigned? Is the GA signing the app for this 50% Do you have a contract and does the contract restrict your ability to appoint with other carriers?

 

[goillini52]

Like my post said, none of my life business is in any way shape or form helped at all by anything the GA does, at all. Nada. Zilch. Without me generating and writing the business his agency would never have the life business I'm writing.

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So what do I tell the GA? I already brought this up and his answer was an annoyed "it's how it's always been for the past 30 years. I can't change the commission plan for one agent".

That may be true, but what's also true is that until I came along there was no agent generating life business. The life business in the agency came here and there once in a blue moon. The agents are the stereotypical lazy agents who sit waiting for the phone to ring. Any life sales they ever made was a side order for a health client, like mcdonalds burger with a side order of fries.

Until I came along this agency has not had a prospector. I'm a prospector with MDRT in his goals. I'm a life insurance agent first, geared towards the financial services and MDRT, but am working in an agency with a health insurance peddling mindset.

Sounds like you're ready to go independent.

 

[Mattschmidt]

YOU really should be writing this OUTSIDE business thru another IMO or agency.

 

[LifeWorth]

Question are your commissions assigned? Is the GA signing the app for this 50% Do you have a contract and does the contract restrict your ability to appoint with other carriers?

I don't know what you mean by assigned commissions.
The GAs signature goes nowhere.
I am contracted.

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Sounds like you're ready to go independent.

My business card from this agency reads "independent agent", since I'm not with a mutual captive lol. What a load of crap.

The agency does pay for the E&O, so that's that.

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A lot of the MRDT's seem to come from the big mutuals. New York Life, Northwestern Mutual, etc. If MRDT is your goal that would the way to go!

Or if you just want to be independent, find a good IMO.

Independent Life Insurance Agent Association

What's an IMO?...........

Also, the GA is not himself contracted with the life companies. So, he goes through a life brokerage general agency for the life contracts. The owner of the life brokerage gets an override as well, which is fine by me, because he's a great guy and really helps me with a lot of my questions. But there's zero reason for my direct GA to get a dime of this.

I brought up going directly through the life brokerage, which would give me my full commission and his response was, "I can't do that. I've been working with your GA for decades. That would be shady business and cause bad blood". I understand where he's coming from.

Guess I have to cancel my contracts through the agency and directly contract myself with the life companies....