Override and commission questions

al3 · 06-17-2007, 04:42 PM

Three quesitons.

1. On life and annuity and LTC, how are the FMO or manager overrides computed? To keep it simple, say we're talking about $100K SPIA and assume the agent gets 7% and the override is 2%.

Agent=$7,000

Does FMO get 2% of the premium ($2,000) or 2% of what agent gets (but not subtracted from agent) 7,000 x .02 = $140?

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2. Many life companies give between 50 and 90% of FIRST YEAR premium to agent. What do they give on a paid-up policy, say $250,000 WL?

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3. What kind of commission is paid on a deferred installment annuity (prem paid yearly)? Same as life?

Thanks,

Al

somarco · 06-17-2007, 05:14 PM

1) usually expressed as a percent of premium, just like the agent comp

2) SPUL/SPWL that I have seen, and I don't do a lot of it, 7% - 12% of the target premium.

3) Flex prem annuities anywhere from 4% to 18%.

senior-advisor-indiana · 06-17-2007, 08:14 PM

Originally Posted by somarco

1) usually expressed as a percent of premium, just like the agent comp

2) SPUL/SPWL that I have seen, and I don't do a lot of it, 7% - 12% of the target premium.

3) Flex prem annuities anywhere from 4% to 18%.

THe SPWL I write is usually around 10-13% and theSPUL is usuallly around 70% of target premium plus 1 or 2% of excess premium.

I alos believe that the FMO gets 2% of the actual premium not 2% of the agents commiss.

somarco · 06-17-2007, 08:24 PM

You are probably right. Haven't done any SPL in a while.

FMO override will vary by product & carrier. A few yrs ago F&G was handing out 130%+ contracts. Agents were paid anywhere from 40% to 90%+.

Assurant (then known as Fortis) handed out 35% contracts for individual health insurance.

I really don't care what the FMO makes. All that matters is what I earn.