I cold-called a bond (constructions surety) broker to ask if she wanted to work with me with selling Colonial to her groups (mostly construction firms, obviously). She said yes... was very excited about it (still is.) She has life/health license (obviously). She has a big book... but not getting larger due to problems in the construction industry (no new homes being built/sold here, etc.)
I met with her. We really hit it off well... we're about same age (60), same background, etc. In conversation she said she has friends who want $200K 10 year term life on each spouse (age 64 and 63). She is not experienced in life, nor am I. I could have handled it... but decided not to (don't ask... not important why.) We decided to bring in a 3rd party.
I brought in the life agent (Colonial district manager) whom I trust. Good man. Honest (so far to me anyway!.) He is very experienced in the business... also has a Series 7. We did not talk split or compensation of any type.
He ran the quotes, he made the presentation to the prospects with both me and the bond broker in the room... and they are going to take 2 policies, one on each life. This was slam dunk easy! (There were some reasons on why agent didn't do a 'first to die'... not important here.) All the premiums were in the $900 per year range per policy (Old Colony, West Coast, Banner, etc.... they took Old Colony.) Agent will help them fill out the apps this week and schedule the paramed next. (These people are quite wealthy... they want the policy to cover the mortgage of a new house until they get a "windfall" from an inheritance 4 or 5 years down the line. I don't know more than that.) They will probably not keep policy full 10 years.
Why didn't I talk about split up-front? Not my way. I do 'good things' for colleagues (via referrals, etc.) and leave it up to them to do the 'right thing.' That's how I ran my computer consulting biz for 25 years and very rarely got shafted by anyone I sent business to... and if I did... well I knew not to work with them ever again... and didn't. When they ask "Al, it's a $100,000 consulting contract, what do you want out of it?" I would answer "Just do what you think is fair." 99% of my colleagues did more than what I thought would be fair!
By convention or 'industry standard' should I and/or the broker expect the agent to do some kind of split? Broker is MY contact and the insureds are HER friends. Agent would not have a case without two of us. What is the 'right thing' for the agent to do in this case... or is nothing the right thing? What would YOU do if you made this sale? No wrong answer.... and I don't expect there to be only ONE answer.
By convention or 'industry standard' should I and/or the broker expect the agent to do some kind of split? Broker is MY contact and the insureds are HER friends. Agent would not have a case without two of us. What is the 'right thing' for the agent to do in this case... or is nothing the right thing? What would YOU do if you made this sale? No wrong answer.... and I don't expect there to be only ONE answer.
Congrats on the sale. If I was in your shoes I'd take the agent out to lunch and reciprocate down the road if you plan on working together. If you don't plan on working together and consider this to be a one time thing then a commission split is fair.
I am a strong believer in farming out things I don't wish to pursue. Thus far I have a source to send my Medicare referrals to that I trust and respect. I am also working on a relationship with an individual to send small group leads to in the Mid-Atlantic area. They will get priority IMHO unless something happens to tarnish the relationship. I "assume" that these people and any other professionals I send referrals to down the road, will reciprocate although I leave that up to them.
-J.R.
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"Tell me and I will forget. Show me and I will remember. Involve me and I will understand." Confucius
You deserve and should pursue a split. This went far beyond just emailing someone a referral. In the cases where someone just says "I have a name and number for you - here" I don't give or expect splits.
In this case, however, you made the contact, met with the contact and established a relationship - which means you actually did all the work. The manager who sold those policies absolutely needs to discuss a split for what you did. In this case I'm liking 50/50.
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Never give away a term life lead. There's nothing to it. It's the easiest insurance to sell because even the client understands how it works. I die, someone gets money. I live, insurance company gets money.
However if you must give it away I'd glady give you a 50/50 split for free money.
I am flabergasted. 2 life and health agents and neither one have the knowledge to write a term policy? There has to be more to this story. Still I would ask for a split up front. Even though if you didn't ask me for it up front I would have mentioned it to you up front.
So, you guys are splitting it 3 way? Thats alot of splitting goin on. Call me next time all. I'll write it for you for 25%.
I personally farm out all of my life biz (which isn't much) to an agent friend of mine who's been doing nothing but life for over 10 years. He's an expert, I'm not. My client might want 10 year term but he'll do a better analysis and a more proper recommendation.
Congrats on the sale. If I was in your shoes I'd take the agent out to lunch and reciprocate down the road if you plan on working together. If you don't plan on working together and consider this to be a one time thing then a commission split is fair.
I am a strong believer in farming out things I don't wish to pursue. Thus far I have a source to send my Medicare referrals to that I trust and respect. I am also working on a relationship with an individual to send small group leads to in the Mid-Atlantic area. They will get priority IMHO unless something happens to tarnish the relationship. I "assume" that these people and any other professionals I send referrals to down the road, will reciprocate although I leave that up to them.
-J.R.
I agree totally, with the exception of you stating that if it is a one time thing that the referring agent should receive a commission split. A one time referral is hardly going to be a major enough event to warrant a split in the commission. I see it as being a huge hassle more than anything.
I occasionally refer clients to a P&C agent I know. I have the client's trust and when I refer someone to them, all things being equal, they usually take a policy with them. I don't expect anything in return. Keeping my client satisfied is the main benefit I want.
If the P&C agent can refer someone to me for a Med Supp policy, so much the better, but it is not required.
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I agree totally, with the exception of you stating that if it is a one time thing that the referring agent should receive a commission split. A one time referral is hardly going to be a major enough event to warrant a split in the commission. I see it as being a huge hassle more than anything.
I occasionally refer clients to a P&C agent I know. I have the client's trust and when I refer someone to them, all things being equal, they usually take a policy with them. I don't expect anything in return. Keeping my client satisfied is the main benefit I want.
If the P&C agent can refer someone to me for a Med Supp policy, so much the better, but it is not required.
I have never told anybody I work with that there are requirements. All I ask is that the person lets me know the outcome. I leave compensation up to the agent.
I have never told anybody I work with that there are requirements. All I ask is that the person lets me know the outcome. I leave compensation up to the agent.
I think that is the way it should be handled.
When you and I talked about the Med Supp leads you have I told you up front that you may want to find another agent because it was very doubtful that I would be able to refer anyone to you for MM coverage.
I think both you and I were good with that. I didn't want to take your leads when I knew that I would not be able to return the favor.
The other option for you is to begin selling Med Supps if you want the few extra dollars per month you will receive from a limited number of referrals. You probably don't want to do that anymore than I want to sell MM.
I have a deal now where if I sell a Med Supp, the guy is going to want me to find MM for his S.O. If it goes through I will refer his S.O. to an agent I know for the MM and expect nothing in return.
He will be happy, she will be happy and I will look like a "nice guy" to both of them. That alone will get me referrals from them.
I have never told anybody I work with that there are requirements. All I ask is that the person lets me know the outcome. I leave compensation up to the agent.
I'm all for conversing and getting the details on the table up front. Make sure everybody is thinking the same thing and no feelings get hurt.
I personally farm out all of my life biz (which isn't much) to an agent friend of mine who's been doing nothing but life for over 10 years. He's an expert, I'm not. My client might want 10 year term but he'll do a better analysis and a more proper recommendation.
You should write Life Apps on at least 30% of your health policies. It's the easiest sale in the world.
I do almost all my apps over the phone and I just simply say do you want to add $100,000 of life insurance on this for $___ a month. A lot of people say yes. You only need to gather a little more info from then than a health app. Driver's License #, Beneficiaries, Occupation and how much they make.
It adds around $150 extra per app commission. Just work with companies that don't make you get a paramed. Sell them a 10 year term for reduced cost and you're done.
I agree Saleswolf. If you are writing health you should be able to cross sell life to your clients also. Why give up the easy commission. I could see if it was some BIG financial plan but most of the time it is for a specific need.
I'm all for conversing and getting the details on the table up front. Make sure everybody is thinking the same thing and no feelings get hurt.
If you really don't expect anything then your feelings will never get hurt.
However, if you do expect something in return it should be more than a "promise" that the other agent will send referrals to you also. That very seldom works.
I did a search for "surety" trying to find anyone discussing bonds (I am a bond producer) and I stumbled upon this thread.
When doing business I always discuss terms with brokers prior to doing anything. We have a lot of insurance brokers in need of help placing their bond business so it happens quite often.
Al, I have been considering brokering out insurance business for years now, but haven't had the time to figure it out. We have a substantial book, maybe we can work something out as well. Surety bonds are all we do...Are you licensed in all 50 states?
Back to the split, not only should it be done, it should be expected. As long as you have the appropriate license (which you've already stated you do) the split should have been at the company level (prior to commission payment) unless there was some reason why you can't be appointed with the company.
I'm all for farming out when necessary (time, expertise, etc.) but you really have to make certain the person you're farming out to is doing the right thing by the client. Sadly, I've seen this dozens of times when someone farms out a permanent life plan and the client is screwed big time due to a commission-hungry agent.
It would be best to identify potential people to refer business to in advance, establish a relationship with them and as others have already said, be clear on the split up front.
Think about it: what many of us focus on constantly is getting the client - it can be 80% of our time, right? You hand delivered the client to the agent. For that, you should expect a 50/50 split!
I do lots of deals like this and always give the referring agent 50%, I have one group of investment guys that send all their life, disability and health to me because they know their clients will get the truth and the best product. I don't split health commissions. In the case you mention, commission will be at least 1800, the agent might spend 3 hours on it, 300 per hour, not bad.
Al, I have been considering brokering out insurance business for years now, but haven't had the time to figure it out. We have a substantial book, maybe we can work something out as well. Surety bonds are all we do...Are you licensed in all 50 states?
No, only in CA, but there are several folks here who are licensed in multiple states. See link below to see "me."
Should we expect a split?
There has to be more to this story. Still I would ask for a split up front. Even though if you didn't ask me for it up front I would have mentioned it to you up front. 
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