Mortgage Protection First Year Income Average?

Corporate Death · 11-09-2007, 01:27 AM

Flirting with Design Benefits Plans and their CA Mortgage Protection plan that uses the "American Mortgage Protectors" mailers (Just like NAA). My license exam is on the 29th.

I keep hearing every week how much money this business will make agents. I see some production in their weekly newsletters and so on, but I'm wondering, (since I havent sold Insurance for about 16 years) since I'm a newbie for all intent and purposes, what is a realistic first year income with this?

No guarantees, I understand that.

Corporate Death · 11-09-2007, 01:28 AM

Oh yeah, and just what realistic percentage of chargebacks to Mortgage Protection agents typically experience in California? Specifically SoCal?

somarco · 11-09-2007, 07:48 AM

MP business is cutthroat. You could make $100k+ or $20k if you are lucky.

The target market is the blue collar buyer who gets sucked in to the bells & whistles (disability, critical illness, layoff) and doesn't want to have a physical exam.

Lapse ratio's are high in this industry so be prepared to factor in charge backs.

If you are a "good" salesman, you could see as high as 50% lapse ratio. If you are a poor salesman it could be worse.

This industry is known for chewing people up and spitting them out. If you want to get back in to the business I would look at health insurance. You might pick up a contract with someone willing to train you, provide leads and advance commissions (as long as you avoid Mega and their sister organizations). Take 6 months or so to learn the business then go on your own in a brokerage (non-captive) position.

The life business is tough and for all the glitz of $$$ in the MP business it is a market where the folks at the top of the food chain make money and everyone else struggles just to get by.

The health business has its' challenges as well (such as underwriting) but has more staying power in my opinion. It has served me well for many years and I believe it will continue.

bluemarlin08 · 11-09-2007, 08:22 AM

I took some time off from the insurance business about 5 years ago and came back a year later and worked about 60% of my time in MP. In 3 years I averaged 65k paid commissions, I worked for a firm that offered many companies, including West Coast, AIG,etc. I had few chargebacks, all chargebacks were from minorities. PM me if you need some pointers, I don't do it any longer but it can be a great way to break into the business if you are very carefull in picking your zip codes that you mail, stay away from major metropolitan areas.

James · 11-09-2007, 09:36 AM

I have to agree with BlueMarlin, one thing I would suggest is going for mortgages that have been in place for 2-5 years. These people tend to be more "Financially Secure" than those that are within there first year of a new mortgage. Plus, if you are lucky and run into a lot of people that brought from agencies like NAA in their first year of mortgage, can you say "Lay Down"?

Plus, I see no reason why one would limit your offerings only to the mortgage amount like so many, NAA, MPI and so on. Use the free mortgage (well no out of pocket cost) leads you can get from your County Court House or Counties close to you. Send out simple brochures, basically a Rate Chart and use a carrier like Banner, AIG or Genworth now please do not put the carriers name on the brochure! Just use their rates, I would say to use the Preffered Rate, you want a response so the cheaper you show the better. Or you can just pick Neighborhoods and do doorhanges as some suggest.

I would also suggest using Disability Insurance, if not on a seperate flyer the same as a notation on the bottom of your flyer. Use BlueCollar Carriers for DI like Illinios Mutual or Genworth. Use a term like "The other Half of HealthCare Insurance" and bring it up during your conversation with your potential clients. Good chance if you are prospecting to the middle or upper middle class homes they have H/C via work. They may also have DI but worksite coverage is usually limited.

somarco · 11-09-2007, 10:12 AM

not put the carriers name on the brochure! Just use their rates,

That's probably a DOI violation.

suggest using Disability Insurance

Assurity has a mortgage DI product and decent brochures.

Corporate Death · 11-09-2007, 01:27 PM

Kewl. Well, it's DBP so they are handing out the leads, supposedly 50 per week, but I've been setting appts for the manager (he pays me per appt). Not too hard, just call and walk em into it. Most dont remember completing the form, a lot were waiting for me to call, believe it or not. I dont get to take my license exam until 11/29. If half are coming off the books by lapse or rejection by the customer, that is definitely a wakeup call. I lost about 20% of my business to chargebacks when I sold for AIL about 16 years ago.

This is good info, thanks guys!!! By my calculations and with what I believe would be my average production, I'm guessing around $280k in AP for first year, thats only $5300+ per week in AP. Under their plan, that would get me to about $600 and change per week GROSS in advances. If you take say 30% off of that for chargebacks, it's worse.

Hmmmm..... going to a trucking company is starting to sound better.

Alsky · 11-09-2007, 02:19 PM

[COLOR=blue]CORPORATE DEATH: I'm guessing around $280k in AP for first year, thats only $5300+ per week in AP. Under their plan, that would get me to about $600 and change per week GROSS in advances.[/COLOR]

[COLOR=black]Am I reading this right? You are only making about $600 for a weekly AP of $5300 for MP? Check these figures... if these are true figures, Run, dont walk away. You are being played big time![/COLOR]

Amazing! What kind of a contract are they offering you?

rocky top buzz · 11-09-2007, 03:32 PM

IF I was selling $280k in AP and earning less than $300k per year, I would agree: RUN!

Life insurance is better sold as part of a family's financial plan, not a knee jerk mortgage protection. I'm not saying that you shouldn't use MP products, I'm just saying you shouldn't go in and see that they have a $200k mortgage and just sell them $200k in insurance. That's not enough. I would generally recomend $200k term to cover the mortgage, and $100k permanent insurance for future expenses.

somarco · 11-09-2007, 03:35 PM

$280k AP should give you (gross) $140k at a minimum 50% contract. I suppose there are GA's starting folks off less than 50% but many are paying 60 - 70% for greenies. Someone with experience can get close to 100% from some MP shops.

Average premium from peddling simplified issue life with the add-ons runs around $80/mo or about $1000 per year. To generate $280k AP you need to place 280 lives or 5 deals a week (that stick). With the way the business works you probably need to submit 8 deals a week to get 5 that are placed and stick.

I have to agree with Alsky. The numbers aren't adding up.

Corporate Death · 11-09-2007, 03:41 PM

Originally Posted by Alsky

[COLOR=blue]CORPORATE DEATH: I'm guessing around $280k in AP for first year, thats only $5300+ per week in AP. Under their plan, that would get me to about $600 and change per week GROSS in advances.[/COLOR]

[COLOR=black]Am I reading this right? You are only making about $600 for a weekly AP of $5300 for MP? Check these figures... if these are true figures, Run, dont walk away. You are being played big time![/COLOR]

Amazing! What kind of a contract are they offering you?

haha!!

Well, the way it works is they get the MBD. The goal for MBD is $600 mbd per week. The reality I've seen from the agents in that office is more like $400 or less. Last weeks Agent AP:

L: $2691
L2: $0
C: $2789
B: $4205
E: $4374

Now, that being said, there has been more. C, did about $7000 the week before. Activity = Success and all that.

They get paid 600% of MBD, so take a B's production for last week, $4205 AP, /12 = $350.42 per month, x 6 (600%) = $2102.52. Now, the 600% is not paid all up front. You get 150% upon app submission, = $525.63, you get another 300% upon policy issue = $1051.26, then another 50% each for months 10,11, and 12, = $175.21 each month.

Just figuring the submission and issue app for a month, I come to $1576.89 each week, x 4.34 weeks = $6843.70 gross per month. If we take 30% off for chargebacks, we are looking at $4790 per month, if I'm lucky, and thats before taxes that I'd have to withhold myself, fuel, phone bills, etc.

Again, thats producing pretty good, even during the holiday season (which, if I remember correctly 16 years ago, it was VERY quiet).

Realistic? What am I forgetting? Not sure if anyone has done over that MBD consistently throughout the year, although there are some folks in Texas who apparently have.

HomeService · 11-11-2007, 03:03 PM

Mortgage protection= a nasty little phrase, invented to hide the actual sale of life insurance.

bluemarlin08 · 11-11-2007, 06:07 PM

Originally Posted by HomeService

mortgage protection= a nasty little phrase, invented to hide the actual sale of life insurance.

Why would you characterize it that way, do you do the same with income protection, liquidity protection, forced sale protection, estate tax protection etc etc? Why would someone attempt to hide the sale of life insurance, confused!

2112Greg · 11-11-2007, 08:51 PM

Depends on how many people you scare into buying life insurance.

Pretty simple...

bluemarlin08 · 11-11-2007, 08:54 PM

That's absurd.

Corporate Death · 11-11-2007, 09:40 PM

Well, I'll tell ya one thing, I will not lie about what the product is. Period. I'm setting appts for the District Manager now until I get licensed. He pays me a nominal amount for each appt set, sold, etc...

When I call folks and they ask me specifics, I only tell them (since I'm not licensed) that it's a life insurance product. Plain and simple. Most still go ahead and accept the appointment. I never lied about the product back in my old Insurance days 16 years ago, I'm not going to start now. If it's that bad a product, then it's not going to be something I will be selling.

My main point though, is how much could someone HONEST realistically expect to earn (minus chargebacks) first year selling this product?

somarco · 11-12-2007, 07:28 AM

I consider Marlin to be someone of character. If he says he made $65k selling MPI then I believe him and you need to talk to him.

The folks I encountered in that market were either making less than minimum wage or, if they were making any money at all, they did it by deception.

bluemarlin08 · 11-12-2007, 08:04 AM

Thanks Somarco, I am a totally straight shooter. There are many agents pushing"Mortgage Protection" that aren't making much at all. I found a vendor that furnished my leads and had great companies. My lead in was to help provide funds to pay off the mortgage if the surviving spouse so desired. However, I ended up reviewing all their insurance and educating them on what their total needs were. You have to be very good, and be able to convince the prospects very early that you know what you are talking about. I would warn the prospects that many of the people that would be calling them were offering limited products that might not be the best fit. I explained what MP use to be, decreasing term assigned to the lender and how things can be different. I would be glad to talk with you if you want more info, it is a great way to break into the business.

James · 11-12-2007, 09:27 AM

Originally Posted by somarco

That's probably a DOI violation.

I don't think so.

Macdaddy · 11-12-2007, 09:51 AM

I had sold MPI for a little while, but didn't like being out so late and missing my teens soccer games so I gave it up. My friend that got me into it has a YTD commissions of about $70K, maybe more, but that is gross before his lead expenses and gas......he travels A LOT and claims 60K miles per year on his income taxes. However he uses his mileage off to off set his taxes, therefore he does not have to pay any income taxes.

He works hard at it generates his own leads, as I did. It's a lot of work unless you buy your leads.