by stevezbpo » Sun Nov 29, 2009 02:09 am
Hello,
I am thinking about a career in insurance and was trying to decide if I should go after the Commercial P&C business or the Personal life and Health. Which route as a general rule makes more money? I was told by one P&C Agency that new agents start out at 10% of the company gross commission. Is that typical? Do Life agents usually get more $$ on a per sale basis? Can anyone give me some real world advice?
Thanks in advance.
SteveZ
I am thinking about a career in insurance and was trying to decide if I should go after the Commercial P&C business or the Personal life and Health. Which route as a general rule makes more money? I was told by one P&C Agency that new agents start out at 10% of the company gross commission. Is that typical? Do Life agents usually get more $$ on a per sale basis? Can anyone give me some real world advice?
Thanks in advance.
SteveZ
Posted: Sun Nov 29, 2009 09:15 pm Post Subject:
Health and life seems like the best way to go in my part of the world, but could be different for the states - you have a lot more mandatory coverage then in the southern hemisphere
Posted: Mon Nov 30, 2009 06:09 pm Post Subject:
There is no reason you can't pursue both avenues, Steve. Understand, however, that P&C is far more complex than health insurance, which is more complex than life insurance. True "commerical" P&C premiums are in the thousands of dollars, so a 10% commission is still a nice check to deposit -- 10% of the total premium, that is. 10% of the agency's premium is a joke -- they get $1000, but you only get $100 for doing all the work? Take a walk on that one.
Beware, too, of any agency fee you will probably have to pay to a GA -- a desk fee or a commission split of 25% to the GA, or both is not unreasonable. But they'll rob you of some of your precious income until you have the experience or gumption to go independent. To be a successful P&C independent agent right out of the starting gate? Darn near impossible unless you already know the subject. Personal lines (auto, homeowner's, renter's) is an easier entry into P&C that you could even do independently as a new agent (but still very tough--lots of competition in most locales) and all pay renewal commissions for at least 1-3 years, if not for as long as the business stays on the books.
Starting your career with an insurer with name-recognition will help, but not guarantee, your success. You will still be responsible for finding and retaining your own clients -- "leads" are expensive and often unproductive. More appointments developed on your own = more sales, regardless of the type of product.
Life insurance pays big initial commissions (up to 100% or more of first year premium) -- the main attraction to becoming a life agent for many -- but is unlikely to provide renewal commissions outside of the variable products (which also require securities licensing). Health insurance pays more modest premiums of 20%-25% of annual premium, but also pays 5%-10% renewal commissions for as long as the business stays on the books. With average annual premiums of about $6000 for a family of four, that $1500 in the first year, and as much as $600 in all other years.
Write just one new piece of health insurance business each month, and keep most of it on the books, and you'll have a huge residual income after just a few years. What would it look like if you were writing 10 new apps each month? That's a 6-figure income in new business commissions alone. Unless "Obamacare" kills the industry.
And considering all the types of insurance available for licensed agents to market, which one is on the tip of most people's tongues today? Health insurance. Become a specialist in that, and you'll do quite well. And you'll write more than a few life insurance apps along the way.
One last word of advice: if you live in one of the many states that now has divided life and health licensing into two separate licenses, get them both. Do not get just a life-only license or a health-only license. That would be short-sighted thinking. Add the P&C license as soon as possible, unless you want to start in that area. If so, add the L&H licenses ASAP. You never want to be out of position to help a client.
Best of all success to you!
Posted: Thu Feb 18, 2010 02:26 am Post Subject: life, health and all
I currently sell health insurance but am pretty new to the game. What offers a better residual over the long haul. I've been told that the avg. health policy stays on the books for 2.5 yrs. while a life policy i am not sure. Our company has 4-5% residual for years 2+. Also do companies like mass mutual and northwestern mutual offer that residual for life products if you leave the company? THanks for your help
Posted: Fri Jul 23, 2010 02:01 am Post Subject: P&C/L&H License overlap?
Hi,
I currently have my P&C License and am looking in to getting my Life&Health License. I was told that the Health Aspect is already included in the P&C License, therefore I only need to get the Life Only License.
Please advise.
Thank you!
Posted: Mon Jul 26, 2010 02:32 pm Post Subject:
I currently have my P&C License and am looking in to getting my Life&Health License. I was told that the Health Aspect is already included in the P&C License, therefore I only need to get the Life Only License.
If you're in California, understand that the Legislature is currently considering revoking Disability/Health insurance authority from the Fire & Casualty Broker-Agent license, which would force all those licensees to obtain the Accident & Health license to be able to continue transacting those lines. Other states are probably doing the same.
Will they grandfather existing licensees with the Accident & Health license? No one knows. Will they pass the legislation this year? No one knows.
Do yourself a favor and don't apply for just the Life Only license. In California, the cost of Life Only, Accident & Health, or the combined Life and Accident licenses is the same either way (not a double charge, unless you apply for them at different times).
Being fully licensed will protect you from the possibility of having to take the prelicensing course all over again (no one teaches only Accident & Health), and the possibility of having to take the test again. Plus you'll pay the full cost of the license and exam all over again, too.
Posted: Mon Jul 26, 2010 02:42 pm Post Subject:
What offers a better residual over the long haul. I've been told that the avg. health policy stays on the books for 2.5 yrs. while a life policy i am not sure. Our company has 4-5% residual for years 2+. Also do companies like mass mutual and northwestern mutual offer that residual for life products if you leave the company?
Apart from Variable life products, many life insurance companies pay only first year commissions on life and annuity products, few pay continuing commissions like health insurance.
That's why commission schedules for life insurance are significantly higher (70%-90% is common) than for health insurance (15%-25%, plus renewals).
On the P&C side, almost all products pay a continuing or residual commission.
I'm not a MassMutual or Northwestern agent, so I can't answer that aspect of your question specifically. I can say that the first company I worked for in the 1980s, marketing disability income benefits, provided a contract that entitled me to receive renewal commissions, on policies I originally sold, after I left the company for as many years as I worked for them. I left after about three years to return to college, and I can tell you that the checks were very welcome each month as a student.
In combination with part time employment on campus as the school's Director of Public Information, it meant that I didn't have to work part time elsewhere in order to remain in school those two-plus years to complete my BA. I was glad that I had been taught well and learned to write good business that stayed on the books.
Posted: Tue Jul 27, 2010 03:18 am Post Subject:
If you're in California, understand that the Legislature is currently considering revoking Disability/Health insurance authority from the Fire & Casualty Broker-Agent license, which would force all those licensees to obtain the Accident & Health license to be able to continue transacting those lines. Other states are probably doing the same.
Actually in all the states I do business there is a Life/accident/Heath license and a Property and Casualty License (some have a health only license--NH).
This is a source of some frustration for P&C shops in New York where there's a mandatory disability insurance law (AKA DBL there) where all employers must carry disability coverage (short term) for their employers, I know California has something similar in place to this. Anyway, the DBL policies require a Life/Accident/Health license in NY, so a lot of P&C people get the license so they can sell DBL as well to their clients.
It's actually often a pretty uncompetitive product since some of the captive guys have a company product that they sell their clients who are purchasing other P&C lines.
I know some life/health guys who went after this market with some high degree of success. They were happy to do it as it was the only form of insurance they could sell that was required, so there was often interest in receiving competitive quotes.
Posted: Tue Jul 27, 2010 06:05 am Post Subject:
Tools submission page is broken
It's possible to mess up the sub nav bar sometimes by playing with it so it disappears entirely.
All the hosted tools have broken layouts.
In skin view, clicking on the small version thumbnail replaces with the larger version and opens lightbox with larger at same time. The larger version thumbnail breaks the content box.
___________________________________________________
Pallet Racking
| Fitflop Boots
Posted: Tue Jul 27, 2010 01:19 pm Post Subject:
Actually in all the states I do business there is a Life/accident/Heath license and a Property and Casualty License
Didn't mean to cause any confusion with my post above. California has a Life-Only license, an Accident & Health license, and a person may hold one or the other or both (formerly these were one license known as Life Agent, but it was separated a couple of years ago (1-1-2008) to mollify insurers whose agents were never going to sell any form of disability products but couldn't pass the exam).
Separate from this, we have the Fire & Casualty Broker-Agent license, which authorizes the producer to transact all forms of insurance EXCEPT life insurance. F&C agents may currently transact all forms of disability insurance, including health and long-term care.
That's what BNTRS was referring to. I know of no state that gives P&C/F&C agents authority to transact life insurance without a life agent's license. But many states have now created Life-Only and Health-Only or Accident & Health licenses, instead of the once common combination of Life & Health (or Life & Disability or Life/Accident/Health).
When I wrote about the CA legislature's consideration of revoking authority for disability insurance from the F&C license, it was to explain that the intent is to force those who would want to transact health and long-term care to obtain the Accident & Health license in addition to their F&C license.
Not all F&C agents are dual-licensed for life and health. And most Life agents are not Fire & Casualty licensed. About 1/3 of license applicants are opting for Life-Only licensing instead of the Life & Health combination.
(( California does have a mandatory short-term disability program, called State Disability Insurance (SDI). But it is monopolistic -- a premium of 1.1% of an employee's pay up to $93,316 is automatically deducted from their check ($1026.48 maximum premium in 2010). The employer submits the premium on behalf of employees with his/her quarterly payroll tax return. No agents are involved. ))
Posted: Wed Jul 28, 2010 01:55 am Post Subject:
I mispoke (types :roll: ). It's a life only license.
Add your comment