Need Help Choosing a Mutual Company

[lifesales2009]

I have been an associate to a Financial Rep for the past two years and am ready to embark on being a FR myself. My only problem is choosing which Mutual company to go to. I currently work for NMFN which in my opinion, is the BEST mutual company due to the financial stability and dividend rate, etc. My only concern though is for a NEW agent, NMFN is rough on all the expenses they make you pay. I just interviewed with NY Life and they seem like a solid company that is lighter on the expenses they expect you to pay, and I have a meeting with Mass Mutual this week. My only concern is that since the market I want to deal with is the upper Middle Income class/affluent market, should I be too concerned with the recent downgrade of Mass Mutual and the negative outlook rating agencies have on both MM and NY Life. Does these updated negative reviews make NMFN ultimatley, the best company to be with, with financial stability and whole life products in mind? Need some advice from expereinced Life Reps who can get a sense of whether these ratings affect the prospecting of my idela target market. I appreciate all the feedback.

 

[sluggo08]

It already seems like you have consumed the Jesus juice at NMFN, but look at it this way. If the rating agencies had a negative outlook on NyLife, they would not be triple A. NyLife is still sitting on about 12b in surplus, so I think they are in pretty good shape. NyLife is writing a ton of business, and there is a reason for it. Also, big dividends are great, however they mean a lot less because NM does not have direct recognition of dividends. So years from now when all of those "affluent" customers start drawing down their overfunded WL policies their dividends are going to take a huge hit that they can never get back. So the talk of higher dividends doesn't carry water with me because most affluent clients are going to overfund WL or SWL. (at least if they are smart) I do not work for NYL, however I am an independent (with a brokerage contract with MM) and I have all of my personal life with NYL. MM is also a good company, however with their GA model, it is a crapshoot as to what kind of office you are going to work in. I would choose who has the best office and support in your area, and go with that. All things considered, all three of these companies are phenomenal, with a slight bias to NYL and NM.

 

[VolAgent]

You might want to recheck your sources. Mass has not been downgraded, they just had all their ratings reaffirmed. Three out of the four have a negative outlook, with the fourth being stable. Additionally, I do believe that Mass has a higher dividend than NM, and their WL is non-direct recognition, so you still earn dividends on the loans. A very nice feature if someone is going to draw a stream of income from the policy. Finally, their DI is non-cancellable. I've been told that NM uses the dividends on their DI to offset future rate increases, so if no dividends, the price goes up.

 

[Guest]

So...which is it?????

Which is better: direct recognition or non-direct recognition? I can never get this straight in my mind. Thanks in advance, all.

...NM does not have direct recognition of dividends. So years from now when all of those "affluent" customers start drawing down their overfunded WL policies their dividends are going to take a huge hit...

...their WL is non-direct recognition, so you still earn dividends on the loans. A very nice feature if someone is going to draw a stream of income from the policy...

 

[VolAgent]

Direct recognition means the company takes the loan balance into account when determining the dividend, thus you only get dividends on the remaining cash value.

Non-direct recognition means the company ignores the loan balance when determining the dividend, therefore you are receiving dividends on the borrowed amount, plus the remaining amount.

Thus, all things being equal, a company using non-direct recognition is better when a loan is outstanding. Now, it is possible that a direct recognition company may offer a higher dividend rate that offsets the dividends lost due to the policy loan.

 

[xrac]

I believe MM is also non-direct recognition.

 

[CFP83]

I have been an associate to a Financial Rep for the past two years and am ready to embark on being a FR myself. My only problem is choosing which Mutual company to go to. I currently work for NMFN which in my opinion, is the BEST mutual company due to the financial stability and dividend rate, etc. My only concern though is for a NEW agent, NMFN is rough on all the expenses they make you pay. I just interviewed with NY Life and they seem like a solid company that is lighter on the expenses they expect you to pay, and I have a meeting with Mass Mutual this week. My only concern is that since the market I want to deal with is the upper Middle Income class/affluent market, should I be too concerned with the recent downgrade of Mass Mutual and the negative outlook rating agencies have on both MM and NY Life. Does these updated negative reviews make NMFN ultimately, the best company to be with, with financial stability and whole life products in mind? Need some advice from expereinced Life Reps who can get a sense of whether these ratings affect the prospecting of my idela target market. I appreciate all the feedback.

I spent over six year with NML and recently took the next step in building my practice by leaving the career agency world and going out and "hanging my own shingle". In leaving the agency world behind, I feel that I can truly "walk my talk" when it comes to being an objective advisor for my clients. Although I will no longer have access to Northwesterns products, I will continue to gladly make my $14,000 annual premium on my cash-value policy.....I didn't leave because of the company or its products, like many it was the greed and politics of the "agency system culture" that drove me away. I am a entrepenuer and independent business-owner at heart and the egotistical and controlling management I was surrounded by drove me away. Below I have copied and pasted a portion of a recent post that I made that I think is valuable based upon the decision your trying to make:

......My "emancipation" had nothing to do with money, it was about growing my practice in the best way I saw fit. Now that my eyes have been opened though I'm seeing as a producer how bad a deal I was really getting. As many on this board have said previously, when you work in the career agency system, because you have a much lower than average payout (50%), you shouldn't have to worry about many other expenses. Like any situation, it all depends on the attitude of management above you though and unfortunatley my management team had a scarcity mentality and were greedy.

So here was my exact scenerio....here I am in my late 20's, five years into my career doing about 300k a year of premium through "mother mutual". I have 2 full-time assistants that i pay 100% of their salaries, and 750 sq ft of office space that I paid $1100 month rent for. On top of that i paid a monthly phone charge, fax charge, printing charge, a monthly technology fee to support troubleshooting for my staffs computers, as well as...get this...I had to BUY ALL SALES BROCHURES AND LITERATURE that pertained to the selling of "mother mutuals" products!

So over the past five years as my production has increased as well as my overhead, my cost have risen rapidly while my managing director (GA)as well as managing partner (MGA) have no more skin in the game then when I was in my first year....my margins were shrinking...theirs were growing. Not only does "mother mutual" give a 50% payout, but my monthly overhead including staff was over $5000....my management paid for nothing. Now, like i said, my decision to go on my own was because I couldn't have someone telling me how or when I could grow my practice when I was the one busting my butt and shelling out the dough. Like many of you who have left the career world though, you just don't know how much money you were giving away until you get "outside the bubble".

So here's the straw the broke the camels back for me. As my practice was continuing to grow I went to my General Agent at the beginning of this year and said that I needed to move into a new office space of around 1500 sq ft so I could continue to grow my team and add more staff...we were out of room in our current space. I of course would be paying for 100% of the new space. I was "told" that this wouldn't be allowed as the agency that my existing office was attached too was at full capacity in regards to space and me having a space that was not attached to this office space would not be permitted, even though I would be paying for 100% of the cost!!!! I'm sure all you independents out there are about ready to fall off your chair!!

Since going independent I have acquired direct brokerage contracts through MassMutual, Guardian. Regarding ratings, please do yourself a favor and don't listen to what the NYL GA tells you about MassMutual or vice-versa. Look at it this way, Northwestern Mutual, New York Life, MassMutual, and Guardian are the four "Top Shelf" mutuals in the business in terms of financial strength and great dividends. The "comdex rating" of a company gives a life insurer a 0-100 score based upon AM Best, standard & Poors, Fitch, and Moody's ratings of a company.....NML and NYL grade out at 100 and MassMutual and Guardian are 99's. Think back to school my man, is there really that big of a difference between a 99% or a 100% on a paper?

One thing you to take into account is that there are a ton of positives to being with a career agency company in your first few years of learning this business. Know that once your ready to "leave the nest" though that you can access every single quality mutual company (except for Northwestern Mutual) through having a direct brokerage contract with the General Agent of the local agency of that company. For example, having a direct brokerage contract with MassMutual your overall payout as a broker is around 80% with 5% renewals years 2-10. Another thing, do yourself and favor and talk to a Guardian General Agent if starting your career in the career agency system sounds right for you. They have the by far the most "producer focused culture" I have seen and the best renewal stream in the business. As a career agent you can earn renewals that start off at 18% and slowly go down to 9% by policy year 15! Here's the best part--if you have great persistency on your book of business, after year 15 you will have a level 8% renewal for the life of the policy!!

I hope this helps and feel free to PM me to discuss further

 

[lifesales2009]

I spent over six year with NML and recently took my practice to the next level by incorporating our team and leaving the agency world behind. I will continue to gladly make my $14000 annual premium on my cash-value policy with NML & I didn't leave because of the company or its products, like many it was the greed and politics of the "agency system culture" that drove me away. I am a entrepenuer and independent business-owner at heart and the egotistical and controlling management I was surrounded by drove me away. Below I have copied and pasted a portion of a recent post that I made that I think is valuable based upon the decision your trying to make:

......My "emancipation" had nothing to do with money, it was about growing my practice in the best way I saw fit. Now that my eyes have been opened though I'm seeing as a producer how bad a deal I was really getting. As many on this board have said previously, when you work in the career agency system, because you have a much lower than average payout (50%), you shouldn't have to worry about many other expenses. Like any situation, it all depends on the attitude of management above you though and unfortunatley my management team had a scarcity mentality and were greedy.

So here was my exact scenerio....here I am in my late 20's, five years into my career doing about 300k a year of premium through "mother mutual". I have 2 full-time assistants that i pay 100% of their salaries, and 750 sq ft of office space that I paid $1100 month rent for. On top of that i paid a monthly phone charge, fax charge, printing charge, a monthly technology fee to support troubleshooting for my staffs computers, as well as...get this...I had to BUY ALL SALES BROCHURES AND LITERATURE that pertained to the selling of "mother mutuals" products!

So over the past five years as my production has increased as well as my overhead, my cost have risen rapidly while my managing director (GA)as well as managing partner (MGA) have no more skin in the game then when I was in my first year....my margins were shrinking...theirs were growing. Not only does "mother mutual" give a 50% payout, but my monthly overhead including staff was over $5000....my management paid for nothing. Now, like i said, my decision to go on my own was because I couldn't have someone telling me how or when I could grow my practice when I was the one busting my butt and shelling out the dough. Like many of you who have left the career world though, you just don't know how much money you were giving away until you get "outside the bubble".

So here's the straw the broke the camels back for me. As my practice was continueing to grow I went to management at the beginning of this year and said that I needed to go look for 1500 sq ft so I could continue to grow...we were out of room in our current space. I of course would be paying for 100% of the new space. I was "told" that this wouldn't be allowed as the general agency I was attached too was at capacity and me having a space that was attached to this office space would not be permitted, even though I would be paying for 100% of the cost I'm sure all you independents out there are about ready to fall off your chair!!

Since going independent I have acquired direct brokerage contracts through MassMutual, Guardian. Regarding ratings, please do yourself a favor and don't listen to what the NYL GA tells you about MassMutual or vice-versa. Look at it this way, Northwestern Mutual, New York Life, MassMutual, and Guardian are the four "Top Shelf" mutuals in the business in terms of financial strength and great dividends. The "comdex rating" of a company gives a life insurer a 0-100 score based upon AM Best, standard & Poors, Fitch, and Moody's ratings of a company.....NML and NYL grade out at 100 and MassMutual and Guardian are 99's. Think back to school my man, is there really that big of a difference between a 99% or a 100% on a paper?

One thing you REALLY NEED TO REALIZE is that although while getting up and running in your first few years after that you do not need to be apart of the agency system to have access to MassMutual. Your overall payout as a broker is around 80% with 5% renewals years 2-10. Another thing, for God's sake do yourself and favor and talk to a Guardian General Agent. They have the by far the most "producer focused culture" I have seen and the best renewal stream in the business.

I hope this helps and feel free to PM me to discuss further

I really appreciate your feedback. VERY HELPFUL and insightful. I will consider this information as I make my decision here in the next month or so. NMFN expenses are a joke to me. Glad you could relate firsthand.

 

[xrac]

I spent over six year with NML and recently took my practice to the next level by incorporating our team and leaving the agency world behind. I will continue to gladly make my $14000 annual premium on my cash-value policy with NML & I didn't leave because of the company or its products, like many it was the greed and politics of the "agency system culture" that drove me away. I am a entrepenuer and independent business-owner at heart and the egotistical and controlling management I was surrounded by drove me away. Below I have copied and pasted a portion of a recent post that I made that I think is valuable based upon the decision your trying to make:

......My "emancipation" had nothing to do with money, it was about growing my practice in the best way I saw fit. Now that my eyes have been opened though I'm seeing as a producer how bad a deal I was really getting. As many on this board have said previously, when you work in the career agency system, because you have a much lower than average payout (50%), you shouldn't have to worry about many other expenses. Like any situation, it all depends on the attitude of management above you though and unfortunatley my management team had a scarcity mentality and were greedy.

So here was my exact scenerio....here I am in my late 20's, five years into my career doing about 300k a year of premium through "mother mutual". I have 2 full-time assistants that i pay 100% of their salaries, and 750 sq ft of office space that I paid $1100 month rent for. On top of that i paid a monthly phone charge, fax charge, printing charge, a monthly technology fee to support troubleshooting for my staffs computers, as well as...get this...I had to BUY ALL SALES BROCHURES AND LITERATURE that pertained to the selling of "mother mutuals" products!

So over the past five years as my production has increased as well as my overhead, my cost have risen rapidly while my managing director (GA)as well as managing partner (MGA) have no more skin in the game then when I was in my first year....my margins were shrinking...theirs were growing. Not only does "mother mutual" give a 50% payout, but my monthly overhead including staff was over $5000....my management paid for nothing. Now, like i said, my decision to go on my own was because I couldn't have someone telling me how or when I could grow my practice when I was the one busting my butt and shelling out the dough. Like many of you who have left the career world though, you just don't know how much money you were giving away until you get "outside the bubble".

So here's the straw the broke the camels back for me. As my practice was continueing to grow I went to management at the beginning of this year and said that I needed to go look for 1500 sq ft so I could continue to grow...we were out of room in our current space. I of course would be paying for 100% of the new space. I was "told" that this wouldn't be allowed as the general agency I was attached too was at capacity and me having a space that was attached to this office space would not be permitted, even though I would be paying for 100% of the cost I'm sure all you independents out there are about ready to fall off your chair!!

Since going independent I have acquired direct brokerage contracts through MassMutual, Guardian. Regarding ratings, please do yourself a favor and don't listen to what the NYL GA tells you about MassMutual or vice-versa. Look at it this way, Northwestern Mutual, New York Life, MassMutual, and Guardian are the four "Top Shelf" mutuals in the business in terms of financial strength and great dividends. The "comdex rating" of a company gives a life insurer a 0-100 score based upon AM Best, standard & Poors, Fitch, and Moody's ratings of a company.....NML and NYL grade out at 100 and MassMutual and Guardian are 99's. Think back to school my man, is there really that big of a difference between a 99% or a 100% on a paper?

One thing you REALLY NEED TO REALIZE is that although while getting up and running in your first few years after that you do not need to be apart of the agency system to have access to MassMutual. Your overall payout as a broker is around 80% with 5% renewals years 2-10. Another thing, for God's sake do yourself and favor and talk to a Guardian General Agent. They have the by far the most "producer focused culture" I have seen and the best renewal stream in the business.

I hope this helps and feel free to PM me to discuss further

Great post from an experienced producer!

 

[lifesales2009]

I spent over six year with NML and recently took my practice to the next level by incorporating our team and leaving the agency world behind. I will continue to gladly make my $14000 annual premium on my cash-value policy with NML & I didn't leave because of the company or its products, like many it was the greed and politics of the "agency system culture" that drove me away. I am a entrepenuer and independent business-owner at heart and the egotistical and controlling management I was surrounded by drove me away. Below I have copied and pasted a portion of a recent post that I made that I think is valuable based upon the decision your trying to make:

......My "emancipation" had nothing to do with money, it was about growing my practice in the best way I saw fit. Now that my eyes have been opened though I'm seeing as a producer how bad a deal I was really getting. As many on this board have said previously, when you work in the career agency system, because you have a much lower than average payout (50%), you shouldn't have to worry about many other expenses. Like any situation, it all depends on the attitude of management above you though and unfortunatley my management team had a scarcity mentality and were greedy.

So here was my exact scenerio....here I am in my late 20's, five years into my career doing about 300k a year of premium through "mother mutual". I have 2 full-time assistants that i pay 100% of their salaries, and 750 sq ft of office space that I paid $1100 month rent for. On top of that i paid a monthly phone charge, fax charge, printing charge, a monthly technology fee to support troubleshooting for my staffs computers, as well as...get this...I had to BUY ALL SALES BROCHURES AND LITERATURE that pertained to the selling of "mother mutuals" products!

So over the past five years as my production has increased as well as my overhead, my cost have risen rapidly while my managing director (GA)as well as managing partner (MGA) have no more skin in the game then when I was in my first year....my margins were shrinking...theirs were growing. Not only does "mother mutual" give a 50% payout, but my monthly overhead including staff was over $5000....my management paid for nothing. Now, like i said, my decision to go on my own was because I couldn't have someone telling me how or when I could grow my practice when I was the one busting my butt and shelling out the dough. Like many of you who have left the career world though, you just don't know how much money you were giving away until you get "outside the bubble".

So here's the straw the broke the camels back for me. As my practice was continueing to grow I went to management at the beginning of this year and said that I needed to go look for 1500 sq ft so I could continue to grow...we were out of room in our current space. I of course would be paying for 100% of the new space. I was "told" that this wouldn't be allowed as the general agency I was attached too was at capacity and me having a space that was attached to this office space would not be permitted, even though I would be paying for 100% of the cost I'm sure all you independents out there are about ready to fall off your chair!!

Since going independent I have acquired direct brokerage contracts through MassMutual, Guardian. Regarding ratings, please do yourself a favor and don't listen to what the NYL GA tells you about MassMutual or vice-versa. Look at it this way, Northwestern Mutual, New York Life, MassMutual, and Guardian are the four "Top Shelf" mutuals in the business in terms of financial strength and great dividends. The "comdex rating" of a company gives a life insurer a 0-100 score based upon AM Best, standard & Poors, Fitch, and Moody's ratings of a company.....NML and NYL grade out at 100 and MassMutual and Guardian are 99's. Think back to school my man, is there really that big of a difference between a 99% or a 100% on a paper?

One thing you REALLY NEED TO REALIZE is that although while getting up and running in your first few years after that you do not need to be apart of the agency system to have access to MassMutual. Your overall payout as a broker is around 80% with 5% renewals years 2-10. Another thing, for God's sake do yourself and favor and talk to a Guardian General Agent. They have the by far the most "producer focused culture" I have seen and the best renewal stream in the business.

I hope this helps and feel free to PM me to discuss further

The info I have received on this Forum after joining only yesterday has been invaluable. Thanks for all the responses. In considering the advice, I think Mass Mutual probably is the way since I can become independent after I get up and running after a few years, then I can take my book of business with me. I know there are pro's and con's to everything, but going independent sounds like the way to go once I become experienced to not need an agencies support.