As earned vs advance

[Crabcake Johnny]

As far as getting off the ground just don't fail to calculate when you receive that 1st as-earned check. When I sell Aetna or Blue it's 2 to 3 months before I see my 1st commish after the approval. That's fine once you're chugging along but don't forget to account for that.

With life it's easy to have something baking for a month just in underwriting. Then you miss the commish cut-off and it's the following month for the 1st check.

Again, not remotely an issue once it all kicks in. Could be an issue getting off the ground.

 

[senior-advisor-indiana]

DO the deadlines come into play if you are on direct deposit or is that only if you have a check mailed to you.

 

[David C]

as earned

Direct deposit gets your money to you much faster AFTER all underwriting requirements have been met.

For instance: my Ohio National contract is set up to pay me as earned. Say I sell a life policy on 4/27/07, it will take some time to get the exam done, commissions are disbursed on 5/03/07 (not likely enough time to have conditions met), the next final requirement cut-off date is 5/11/07, IF the customer and the examiner have not pissed time away, and if nothing is needed from the applicant's doctor then I will have my commission deposited sometime right after 5/18/07.

Time can slip up on you and you really have to stay on top of commission cut off dates and final requirements dates.

 

[Crabcake Johnny]

I haven't seen advances be an issue. I know rotten agents who have had a bunch of business blow back on them. Either on advances or as-earned if your placement and persistency are horrible you're out of business on either method. If your placement and persistency are great then the advance doesn't matter. I love the advance.

 

[Wprice]

Well can we talk a little bit on persistancy and placement? I know persistancy has a huge part to do with Customer service, but how do you know that in three months someone isn't going to cancel? How are some soft ways to get that information? When you qualify what are specific topics that you hit on?

 

[J.R.]

Well can we talk a little bit on persistancy and placement? I know persistancy has a huge part to do with Customer service, but how do you know that in three months someone isn't going to cancel? How are some soft ways to get that information? When you qualify what are specific topics that you hit on?

Money aside, clients who "value" health insurance should not cancel. Are you marketing towards potential clients who value insurance or feel obligated to obtain a policy? It is one thing to talk about the dangers of jeapordizing the ability to qualify for health insurance, but if the person does think it is importance do you really want that person as a client?

We have no control over anyone's finances, but we do have control over what we tell clients about the importance having something in place to protect against the unforeseen because if something major happens they will be screwed and hospitals don't care about using condoms. "Nice house, you want that surgery huh???"

But, then again, if they do not have the interest or value and simply decide to buy it because you are a "Great" salesman, that is a lapse waiting to happen.

I think it is important to determine early on and keep an eye on the types of clients you want. They represent your agency just as much as you do and the agents under you do.....

 

[Crabcake Johnny]

Neither here nor there if you're talking about as-earned vs advance. If a clients cancels quickly you're not getting paid on either method.

That being said, there is liability with an adavace you don't have with as-earned. If you sell a lot of policies that blow back on as-earned and see this biz isn't for you - or maybe the product isn't for you - then you simply quit. However, with an advance you could have a negative balance that needs to be satisfied if you choose to throw in the towel.

 

[Wprice]

Well I'm used to being a life agent. Health is a different and new thing.

 

[Bob_The_Insurance_Guy]

I do all my contracts "As Earned". Even for Term Life Products. I don't ever want to owe an insurance company money.

I sell primarily health-based products, and find that, if someone is going to cancel, I won't be affected that much. These are the same people who, on the P&C side, get car insurance just to get their tag, then never pay the next month's premium.

That being said, with medicare advantage plans, you are paid a lump sum per app. No way around that. Since 98% of the MA plans I sell are "zero premium", I can understand why. The only exception being the evil empire, but I haven't sold any of their MA plans yet.

With As Earned, I'm not laying awake in bed, wondering if someone cancels, how much I've got to pay back, or eat away at my future commissions before I get another check.

Hint: Sell STM. They never lapse. They even keep it, once they get a job, and go through the probation period. Very low maintenance product.

 

[Frank Stastny]

Well can we talk a little bit on persistancy and placement? I know persistancy has a huge part to do with Customer service, but how do you know that in three months someone isn't going to cancel? How are some soft ways to get that information? When you qualify what are specific topics that you hit on?

Whether or not they are going to cancel is up to you!

I have found that if you sell the prospect what they need, not necessarily what they want or what pays the highest commission, cancellations are not a real problem.

Send a letter, not a pre-printed "Thank You" card that you only sign, thanking them for their business and tell them when they should expect to receive their policy, the effective date and when their next premium is due. Tell them to call you with any additional questions they may have thought of since you were there. Have a toll-free number for them to call. Return phone calls the same day when possible, no later than the next day including Saturdays and Sundays.

If you don't deliver the policy, call the new client after you think they have received the policy and ask if they have any additional questions.

Keeping an open line of communications with your new client will go a long way in keeping them.

People tell me that once they take a policy from an agent they never hear from that agent again or the agent never returns their phone calls. Other than huge premium increases that seems to be the most common reason people cancel their existing policy. (Crappy service from their agent.)

Do not let an FMO, IMO, or anyone else communicate with your client. YOU, personally handle any questions or problems YOUR client has. YOU are the only one who will give your client the best service!

You have to work at keeping your clients. However, it is less work keeping them than it is finding new ones.