Americo rates

[titeye]

They didn' cut commissions it's just a levelized Comission similar to Medicare supplement

Think about it for a minute:
Based on what I was faxed, that same NT prospect would qualify for Super Preferred at a rate of $52.20 per month. An agent at 100% level would gross $578.40. This is because the $4 mo. membership for Legacy is not commissionable. In years 2-5, it pays 4.25% ($98.33); years 6-10, it pays 2.25% ($65.07); and, every year beyond it pays 0.75% ($4.34). That is a total of $781.80 thru year 10.
If this agent sells this same client the Platinum Plan, the monthly premium is $45.21. This same agent, who has the 100% contract level, will receive a commission of 15% on annualized production of $494.52 for 5 years. That is a total of $370.89 in commissions. His commissions totally cease thereafter.
The difference in commission for selling Platinum is $207.51 less, not including renewals.
To make matters worse, if the agent knows anything about the time value of money, this levelized structure further devalues his commissions.

I have made mistakes before, so if I made an error, please let me know.

 

[rousemark]

Think about it for a minute:
Based on what I was faxed, that same NT prospect would qualify for Super Preferred at a rate of $52.20 per month. An agent at 100% level would gross $578.40. This is because the $4 mo. membership for Legacy is not commissionable. In years 2-5, it pays 4.25% ($98.33); years 6-10, it pays 2.25% ($65.07); and, every year beyond it pays 0.75% ($4.34). That is a total of $781.80 thru year 10.
If this agent sells this same client the Platinum Plan, the monthly premium is $45.21. This same agent, who has the 100% contract level, will receive a commission of 15% on annualized production of $494.52 for 5 years. That is a total of $370.89 in commissions. His commissions totally cease thereafter.
The difference in commission for selling Platinum is $207.51 less, not including renewals.
To make matters worse, if the agent knows anything about the time value of money, this levelized structure further devalues his commissions.

I have made mistakes before, so if I made an error, please let me know.

What percentage of the business actually strays five full years once you consider lapses due to non payment and death claims?

 

[Baseball7]

I'd say 50-65% in the best case. I've got plenty of clients 4-6 years in on there 2nd carrier.

final expense companies need to make it a lot easier to service and conserve business.

KSKJ today went above and beyond to do that. All by email.

Another company I have to call and the easiest solution was just to redo the application vs there procedure.

When you get into year 2, and beyond where we are making pennies to keep them on the books, it shouldn't take much more than an email to correct a conservation issue.

 

[DonP]

What percentage of the business actually strays five full years once you consider lapses due to non payment and death claims?

I had trans statements and looked from 2015 to 2021 . I'd estimate possibly 40% max were on books 6 yrs later .Some lapsed , Some died , I'm sure some replaced . We deal with sick people so mortality in yrs 5-10 very high . I will say once the policy gets to yr 5 very few fall off but claims start to hit them . In 24 months my renewals in Medicare 6 times what I have in fe looking back 10 yrs . But Medicare also 10 times the work ( taking call after call)and retention 10 times as hard . Your constantly having to try to save plans . These people being called 20 times a day . All they Have to do is pick up the phone 1 time and they'll be flipped

 

[titeye]

What percentage of the business actually strays five full years once you consider lapses due to non payment and death claims?

I'm not so sure the % of business that actual staying on the books the full 5 years is relevant. Any amount that stays on the books after the 1st year makes my case stronger.
Let's say we forget about renewals altogether. The difference in commission the first year alone is $207.51. Just one policy per day is equivalent to $50,000 annually, even if all 250 clients cancel, lapse or replace after the first year.

 

[Baseball7]

They're not looking at it in the first year, since they looking at it in a Medicare supplement sense. The problem is average premiums on Medicare supplement are three times what the final expense premiums are so the numbers just don't work.

 

[theinsuranceman]

Let me make sure I fully grasp this:
*Live-call Transfer TV lead cost...$55
*Premium....$39.51 mo.
*Annualized Production... $474.12
*Commission 20%... $94.82
*Commission Advance 9-mo.... $71.12
*Call Duration (best case scenario)...30-mins
*Gross Profit...$16.72 (before accounting for 20% falling off the books)
Note: Gross Profit assumes a close ratio of 100% from every lead purchased.

Adjusting for 20% charge-backs:
*Commission Advance...$56.90
*Live-call Transfer cost...$55
*Call Duration...30mins
*Gross Profit...$1.90, or $3.80 per hour (ie. restaurant server wages, before tips)

In either scenario, failure to close 1 lead, agent is in the red.

Is my analysis accurate?

Your math is wrong. That should be obvious. You'd get 20% commission paid each month for years on end.

 

[Baseball7]

I'm pretty sure they pay advances on this business not as earned. You literally couldn't afford to operate on a 20% as earned contract in this market..

 

[Newby]

$58.31 incl. Legacy
$54.31 excl. Legacy

That doesn't look correct.
FexQuotes shows $79.76 for the standard rate for a 60 year old male with Senior Life.
Standard is the best rate a smoker can qualify for with them isn't it?

 

[theinsuranceman]

I'm pretty sure they pay advances on this business not as earned. You literally couldn't afford to operate on a 20% as earned contract in this market..

Advances (75%, 60%, or 50%) are available or paid as earned. You'll be getting 20% renewals starting on the 13th month. I tell my agents that the Platinum plan is probably most useful when they might need to beat another carrier's premium to get the sale. After all, a half of a loaf is better than no loaf.