Agency Succession Planning

[Newby]

We just had this happen. Agent died suddenly at a fairly young age. His agency was set up as its own entity (either s-corp or LLC).

He had a fairly large book of Med Advantage as well as Life policies. The commissions are all still paid to his agency. But the agency has only 60-days to have a new licensed, contracted, producer that has passed AHIP and is appointed with the carriers.

It's a lot for a spouse to take on in a short period of time. Best if your spouse is appointed and ready for such a crisis.

 

[sshafran]

Yes to both of those Qs, Scott. She would need to stay contracted and recert with AHIP and the carriers annually.

Thank you!

 

[sshafran]

We just had this happen. Agent died suddenly at a fairly young age. His agency was set up as its own entity (either s-corp or LLC).

He had a fairly large book of Med Advantage as well as Life policies. The commissions are all still paid to his agency. But the agency has only 60-days to have a new licensed, contracted, producer that has passed AHIP and is appointed with the carriers.

It's a lot for a spouse to take on in a short period of time. Best if your spouse is appointed and ready for such a crisis.

Sorry to hear that.

Yeah, trying to avoid any extra stress by doing things ahead of time.

 

[hockeyday]

Paying me when selling the book of business as a capital gains or good will transaction certainly sounds like a good scenario, but given I'm receiving commissions now as 1099, I'm not certain how this could happen. I may be asking a question that deserves a longer answer!

Contact new horizons marketing its how they have done every deal they have closed on.. or go to their youtube channel it's explained there multiple times

 

[InsuranceGuy29]

I'm honestly glad this was posted. One thing I never thought about is, what If (God forbid) I have a stroke, or something that mentally incapacitates me. A scenario where I'm alive, and fairly coherent, but not enough to take AHIP or keep certifying for carriers.

Suddenly I'm in an "everlong" stay at a hospital for an undetermined amount of time, bills piling up, with all my income ending soon because I'm not mentally well enough to take a few tests. That honestly isn't right, and I really think it's something NABIP needs to bring to the attention of the carriers.

If something happens to you that's completely out of your control, they shouldn't just get to snatch up all your income and say "Oh well, f*cker...that's life....good luck! There should be some kind of disability protection.

I realize we are technically self-employed, but this is absolutely not TRUE self-employment, as we have a bazillion rules to follow from these carriers. If we have to play by all these rules, then they should have to cover us in times like this.

 

[DonP]

Contact new horizons marketing its how they have done every deal they have closed on.. or go to their youtube channel it's explained there multiple times

I looked at some of new horizons tapes . Good info but they never discuss what type multiples they pay . I know a lot of analysis goes into what they pay . Age of client , how long a client , what % med sup and what yr are the plans in ( only 6 yr payout ). What's the composition of the mapd ( how many duals etc) . Any fe , hospital , cancer , long term care ,di. But looking at many videos over the last yr I'm formulating about 1.5 times annual commissions . Honestly I'd never ever do that . What I'll do if I wanted to sell in 7 yrs . In 2 yrs I'll no longer work any leads . I'll no longer save any disenrollments . I'll no longer basically do face to face with any one . I'll still work referrals in the 2 nd and 3rd yr . I'll no longer reach out aep . In the 4 th and 5 th yr I'll still take calls but work zero new business . After the 5 th yr I'll take calls 2 days a week ( by then my book will have dwindled 40% or more ) . In the 6th yr I send a letter " I'm retiring . Call the company if you need service " . I'll still certify yearly and in 4-5 yrs my book will only have 5%left . That way I make 5 plus times the income over selling it

 

[rousemark]

I looked at some of new horizons tapes . Good info but they never discuss what type multiples they pay . I know a lot of analysis goes into what they pay . Age of client , how long a client , what % med sup and what yr are the plans in ( only 6 yr payout ). What's the composition of the mapd ( how many duals etc) . Any fe , hospital , cancer , long term care ,di. But looking at many videos over the last yr I'm formulating about 1.5 times annual commissions . Honestly I'd never ever do that . What I'll do if I wanted to sell in 7 yrs . In 2 yrs I'll no longer work any leads . I'll no longer save any disenrollments . I'll no longer basically do face to face with any one . I'll still work referrals in the 2 nd and 3rd yr . I'll no longer reach out aep . In the 4 th and 5 th yr I'll still take calls but work zero new business . After the 5 th yr I'll take calls 2 days a week ( by then my book will have dwindled 40% or more ) . In the 6th yr I send a letter " I'm retiring . Call the company if you need service " . I'll still certify yearly and in 4-5 yrs my book will only have 5%left . That way I make 5 plus times the income over selling it

You are assuming you are going to stay healthy for several years out. That plan does not work if you have a serious accident or illness such as a stroke with sudden onset that prevents you from cetifying.

 

[sshafran]

I looked at some of new horizons tapes . Good info but they never discuss what type multiples they pay . I know a lot of analysis goes into what they pay . Age of client , how long a client , what % med sup and what yr are the plans in ( only 6 yr payout ). What's the composition of the mapd ( how many duals etc) . Any fe , hospital , cancer , long term care ,di. But looking at many videos over the last yr I'm formulating about 1.5 times annual commissions . Honestly I'd never ever do that . What I'll do if I wanted to sell in 7 yrs . In 2 yrs I'll no longer work any leads . I'll no longer save any disenrollments . I'll no longer basically do face to face with any one . I'll still work referrals in the 2 nd and 3rd yr . I'll no longer reach out aep . In the 4 th and 5 th yr I'll still take calls but work zero new business . After the 5 th yr I'll take calls 2 days a week ( by then my book will have dwindled 40% or more ) . In the 6th yr I send a letter " I'm retiring . Call the company if you need service " . I'll still certify yearly and in 4-5 yrs my book will only have 5%left . That way I make 5 plus times the income over selling it

This is basically and essentially my exact plan for when I have enough real estate...

That might change, but I plan to passively let the book dwindle.

 

[hockeyday]

I looked at some of new horizons tapes . Good info but they never discuss what type multiples they pay . I know a lot of analysis goes into what they pay . Age of client , how long a client , what % med sup and what yr are the plans in ( only 6 yr payout ). What's the composition of the mapd ( how many duals etc) . Any fe , hospital , cancer , long term care ,di. But looking at many videos over the last yr I'm formulating about 1.5 times annual commissions . Honestly I'd never ever do that . What I'll do if I wanted to sell in 7 yrs . In 2 yrs I'll no longer work any leads . I'll no longer save any disenrollments . I'll no longer basically do face to face with any one . I'll still work referrals in the 2 nd and 3rd yr . I'll no longer reach out aep . In the 4 th and 5 th yr I'll still take calls but work zero new business . After the 5 th yr I'll take calls 2 days a week ( by then my book will have dwindled 40% or more ) . In the 6th yr I send a letter " I'm retiring . Call the company if you need service " . I'll still certify yearly and in 4-5 yrs my book will only have 5%left . That way I make 5 plus times the income over selling it

Never said they did discuss what they will offer, you just layed out a plan if you stay healthy and you can still renew your AHIP and CE, Life happens every day and with out a plan you are screwed,

 

[Tahoe Ray]

There should be some kind of disability protection.

There is. It's called disability insurance.

Every agent should own a disability policy on themselves. They're crazy not to.