Average Earnings Per Customer

[LearningGood]

You are right for a 500K 20 year term policy for a 30 year old would be $384 (approximately what policy genius says). Also, what was stated by the number of policies sold/year can help with commission. How long the business stays on my books helps with residuals. Lastly, if I am selling a lot of good policies my commission could be 120% on the first year of the policy. I read on other threads that you want a good insurer...the amount of commission paid is not everything.

I do not care about my income (commission rate) in the first few years. All that I care about is will my business model work. So looking at an average healthy customer staying with the policy I write for 5 years. Me writing a 500K policy for 20 years on average...my gross revenue per customer will be in essence $500. This is just for term life. Not looking at permanent insurance...this is great if I get it but all that I care about is term life insurance. Not looking at FE insurance, etc. may sell as a side line someday with expansion but I only care about term.

$900/sale would have been nice but $500 is the reality...now I can go back and plug this number into my business model to see if it works.

 

[Allen Trent]

You are right for a 500K 20 year term policy for a 30 year old would be $384 (approximately what policy genius says). Also, what was stated by the number of policies sold/year can help with commission. How long the business stays on my books helps with residuals. Lastly, if I am selling a lot of good policies my commission could be 120% on the first year of the policy. I read on other threads that you want a good insurer...the amount of commission paid is not everything.

I do not care about my income (commission rate) in the first few years. All that I care about is will my business model work. So looking at an average healthy customer staying with the policy I write for 5 years. Me writing a 500K policy for 20 years on average...my gross revenue per customer will be in essence $500. This is just for term life. Not looking at permanent insurance...this is great if I get it but all that I care about is term life insurance. Not looking at FE insurance, etc. may sell as a side line someday with expansion but I only care about term.

$900/sale would have been nice but $500 is the reality...now I can go back and plug this number into my business model to see if it works.

From what I am told, Residuals on term have become almost non existent (compared to the past or other insurance products) as most carriers have boosted 1st year commissions or lowered premium rates to be more competitive to both consumers & agents.

PC is where the residuals are & also where the service work & expenses are. PC carriers that also sell life tend to have lower 1st year life comm, bigger bonus & life residuals to encourage persistency. Not better, they just tend to have an entirely different comp model than life only competitive term

 

[Tahoe Ray]

How long the business stays on my books helps with residuals.

Just FYI, most of the big term carriers pay almost no renewals.

 

[LearningGood]

Thank you both for this information! Now my earnings per customer is forecasted to be $400. Hmmm...this is painful news but I would rather have accurate numbers so thank you.

 

[jdeasy]

Residuals are non existent on life insurance. Renewals? That's a different story. Every term company I write has renewals. Lower renewals than whole life but they have renewals. Many of the term are as low as 2%. RNA used to pay 4% but changed to no renewals a couple years ago. Bumped up first year by 10%.

Many IMO's keep all the term renewals and the agent gets none.

 

[Real_AMG]

Thank you both for this information! Now my earnings per customer is forecasted to be $400. Hmmm...this is painful news but I would rather have accurate numbers so thank you.

Simplified issue term(mortgage protection) is the obvious choice for an independent agent that needs to make money. It’s much easier to create a more intricate, targeted business plan when you have real capital.

 

[Allen Trent]

You are right for a 500K 20 year term policy for a 30 year old would be $384 (approximately what policy genius says)

My 23 yr old future son in law just got approved with our average priced company this morning. $500k for $20 per month or $1M for $33 per month on 20 yr term.

He will likely combine some 30 yr term & some permanent, but I am just pointing out to you that it will take a massive amount of everyday average term sales to make an average living, especially if you are gonna have to buy leads, pay any overhead, self employment taxes, etc.

You might need to combine another product Target market or also be a PC solicitor/sub producer to generate revenues

 

[marindependent]

From what I am told, Residuals on term have become almost non existent (compared to the past or other insurance products) as most carriers have boosted 1st year commissions or lowered premium rates to be more competitive to both consumers & agents.

PC is where the residuals are

Completely true. If you are going to focus on Life/Health but still have some P/C knowledge it is possible to set up a referall lead exchange where by the LH agent still gets commissions and residuals from a Cluster/Agggregator/Other Agent of P/C. However this typically ends up frankly paying peanuts. And you are usually better off finding a referal partner on the P/C side to do straight referrals.

 

[LearningGood]

Thanks again. Lots to think about!