Life Insurance Chargebacks, Industry Standard?

todd02

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Farmers New World life came out with Increased commissions and the cavet was that they will charge back "earned commissions" if the policy lapses within the first 13 months...

I was told this is industry standard... IS IT? This would be like I sell a 1 yr auto policy and the insured cancels and I get charged back the full commission instead of just the months advanced that were not earned...

Pretty freakin annoyed P&C agent...
 
Farmers New World life came out with Increased commissions and the cavet was that they will charge back "earned commissions" if the policy lapses within the first 13 months...

I was told this is industry standard... IS IT? This would be like I sell a 1 yr auto policy and the insured cancels and I get charged back the full commission instead of just the months advanced that were not earned...

Pretty freakin annoyed P&C agent...

EVEN ON as earned......no advance........
 
I wouldn't call it industry standard, but there are other companies that do it.

Personally, I don't write for such companies. Unfortunately, I doubt you have a choice.
 
I don't think that is the industry norm at all. I go as earned as chargebacks can be a real pain in the butt. Plus it keeps you from stopping work when you get a big case placed.

When a carrier does that to agents it's code for "we don't really want you to sell our product."
 
When a carrier does that to agents it's code for "we don't really want you to sell our product."

Not really, it is usually captives/career companies that do this.

LFG and their career agents come to mind. Todd is a Farmers agent, he can only sell their life. And they will term him if he doesn't.
 
Actually, most carriers have some type of commission charge back for the first 12 months. The % may vary between the products and carriers, but this is typical.

Another factor would be the commission option that is chosen.. for example, the agent may choose heaped commission of a spread option. These 2 products have different commission chargeback schedules.
 
Not really, it is usually captives/career companies that do this.

meant captive, sorry I left it out. NYL was the same way with some products. They had to offer them, but made them suck for the agent.
 
Not really, it is usually captives/career companies that do this.

meant captive, sorry I left it out. NYL was the same way with some products. They had to offer them, but made them suck for the agent.

In my experience it wasn't the product, but across the board. All products had such a chargeback policy.
 
There's a lot of variance when it comes to charge backs in this industry, and some a much more reasonable than others.

It's interesting that we're talking a P&C focused company. My experience has been that these types of companies tend to be the most punitive in terms of charge back schedules on life insurance products.
 
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