A question about captive contracts

[Frank Stastny]

Nate,

I've always felt the most important thing to look for or ask is where are your commission and renewal checks coming from?

If they are coming from the insurance company that is a good thing. If they are coming from the agency that is probably a bad thing.

If they are charging you to use their office if you leave that is also a bad thing.

 

[Guest]

OK Here is an update.

Had my three interviews with Bankers Life, that turned into a 4th interview, in which it was determined by them, that I didn't fit their mold. I knew to much, asked to many questions, and couldn't be herded like a sheep.

I have to thank this board for all the great information provided, that led to all my questions.

My next journey took me to an independant agency that is in my area. I've had two interviews, and they would like me to work for them.

Here's the problem: While looking over the paper work they want me to sign for appointments, I saw that some of the documents are numbered as 10 pages, but only three of them were in the packet. I was like where are the other pages, they stated these are the only pages you need to read and sign. I sat there and didn't fill out a thing, as two other new hires eagerly filled out their appointments sheets with them.

At the end of the meeting they asked me why I haven't filled out any of the paperwork. I said don't take this the wrong way, but I'm not going to sign a 10 page document with only 3 or 4 of the pages being there. Duh

It was at this time, I finally got to the bottom of their commission structure. At this point, they only told us about how much we could make, but never disclosed their cut.

They will provide me with a desk, phone, office expenses, and training. Which according to them will be three days in the field to start, and some reps coming in every other Friday for updates. In the fine print of their agency agreement, if I leave before 1 year, they will charge me for the above costs, but it doesn't spell out the costs.

All this can be mine for a mere 40% of my commissions.

They also told me about this new zero premimum life product coming out, all I could do was look at them and smile.

You have definitely got the Independent mind and spirit...very wise decisions so far. Go Indy if you can struggle a little in the first few months.

 

[nate124]

Hi Frank,

Thanks for the info. I wouldn't sign on with anyone who I felt was taking advantage of me. (That's why I ran from the other 2 companies I mentioned... as well as American Income Life, and UGA)

The company I am going to work with does not charge anything for the use of the office. I saw this as much different than any other company. For me, where I am at in my career (just starting out), I need some training on how this business works. This company offers a lot of training in that area, and I also did not sign any sort of an exclusivity contract with them. I can leave them at any time... which is also unique to this type of situation.

Anyways, thanks again for the info! I'll keep you posted on how this turns out (good or bad... which I'm really hoping (and thinking) it will be good).

 

[Frank Stastny]

Nate,

Sounds like you are on the right track and making some well informed decisions. Just be aware that if you decide to leave that agency, and you are getting paid by the agency, and not the insurance company, you will most probably lose your renewals.

Good training is the first step to success. It is imperative that you have total product knowledge and stay abreast of any changes in the rules and regs by the Department of Insurance in your state. (Several years ago the Missouri DOI made a significant change regarding companies who sell Med Supp insurance. It was huge and changed the way I sell Med Supps.)

It is equally as important that you not try to sell the way the "book" says to. You must take your product knowledge and develop your own "dog and pony show". If you try to use someone else's presentation it is going to sound like it. Learn what others do and then modify it to your personality.

When I first saw this thread I assumed it was about being captive with an insurance company, not by an agency. To me that is a totally different kind of "captive". With a lot of agencies, like the one New Guy talked to, I don't consider that "captive", I call it "we've got you by the gonads".

If you are going into the Senior market and would like to talk about it to possibly get a different prospective give me a call.

 

[JBlack1971]

Before going indy, can't you line up your appointments with other companies and once your contract is up immediately be free to write for those other companies?

I have read a lot of posts about leaving a captive company and going independent. Many have stated, that you must wait 3 to 6 monthe before you can write policies after you leave. What I want to know, is that just with the companies that your captive company is appointed with, or am I not allowed to write with any other company for that period of time?

 

[NCAgent]

Before going indy, can't you line up your appointments with other companies and once your contract is up immediately be free to write for those other companies?

There is probably some lag time in there since they can't really appoint you while you have a captive appointment. But yeah, if you can get the ducks in a row like that go for it. It's good in theory but sometimes getting carrier appointments is like herding cats- for example, I've been trying to get a Donegal appointment now since April...