Captive vs. Independent

[myinsurebiz]

Captive isn't a bad situation while someone learns the biz.

I'm actually thinking of taking my company that way.

Tomorrow I'm going to start the process of getting a LLC and going to start a captive type agency - but still let everyone be a 1099 independent contractor.

I came to this conclusion after receiving over 20 calls last week from ads I ran seeking agents - and 18 of them weren't even licensed. Which to me - is a good thing.

So - if we are going to bring them into the business, train them and assist them with leads - they might as well be "captive" kinda sorta . . .

Nothing fancy - we'll require the agent not have any appointments but with us or we'll exercise our option to terminate their contract with a 7 day notice.

If they don't like the stipulation - they don't have to join.

If they are already licensed - instead of appointments, we'll require that they don't write any FE biz for any other carriers - or we will terminate their contract as well if we catch them.

The agent can terminate as well. They are automatically vested with the carrier. We will offer a release subject to any chargeback risk.

This of course wouldn't terminate their contract with the carrier - just with our marketing organization.

We'll still offer 100% contracts for those that want to supply their own leads and be independent. Those agents are self sufficient anyway.

What ya think ? ? ?

Tom

 

[GreenSky]

Re: Captive - versus - Independent

Another business model?

Rick

 

[myinsurebiz]

Re: Captive - versus - Independent

Still recruiting agents and selling only one product - Simple Issue Whole Life (FE) - just gonna structure it a little different.

Since we are providing Leads to Agents that produce - we have to safe guard this Lead.

We want Agents that are committed to growing with us. We provide an opportunity to make money to anyone that is willing to follow a system.

It will be easier to build, train and motivate a "captive" system. Managing the system will be easier too.

The Agents are still "independent" - i.e. They work when and where they want, and the hours the want. They can sell from any phone in the world. No quotas. No meetings. No hassles.

They just wouldn't be able to sell FE for anyone else.

I know we won't be attractive to everyone - but this way we can be a little pickier. We project to have 200 producing Agents by the end of 2010. We won't need everybody to join to help people make 6 figures . . .

Over the last 2 weeks - 90% of our Agent prospects are normal joes with no insurance license or experience. I like it better this way.

Tom

 

[Franz Kafka]

Re: Captive - versus - Independent

Forgive my ignorance but aren't only the carriers able to offer captive contracts??

How does an independent agent become captive with a FMO??

 

[Guest]

Re: Captive - versus - Independent

I don't do FE but from what I've read here, in the best interest of the client their policy should be tied to, and price-guaranteed with, a funeral home, no? Next best is a quick (2 day or less) claims payment like Forethought or the "credit card lady" at Lincoln Heritage (maybe not so much, the latter). Other than that, my understanding is that the family will have to come out of pocket for all final expenses until the insurance company pays, which won't be in time.

Am I missing something?

I want to move into FE in the future, but with my eyes wide open in the best interest of the client. You won't want me to come in behind you.

 

[GreenSky]

Re: Captive - versus - Independent

I don't do FE but from what I've read here, in the best interest of the client their policy should be tied to, and price-guaranteed with, a funeral home, no? Next best is a quick (2 day or less) claims payment like Forethought or the "credit card lady" at Lincoln Heritage (maybe not so much, the latter). Other than that, my understanding is that the family will have to come out of pocket for all final expenses until the insurance company pays, which won't be in time.

Am I missing something?

I want to move into FE in the future, but with my eyes wide open in the best interest of the client. You won't want me to come in behind you.

In my limited experience, FE and Pre-Need are two separate markets.

FE is basically purchased by people with little money. Pre-Need is purchased by people who actually can find the money to pre-pay a funeral. I'm interested enough in this that I'm meeting with a GA tomorrow for more details on the potential opportunity.

Rick

 

[Guest]

Re: Captive - versus - Independent

In my limited experience, FE and Pre-Need are two separate markets.

FE is basically purchased by people with little money. Pre-Need is purchased by people who actually can find the money to pre-pay a funeral. I'm interested enough in this that I'm meeting with a GA tomorrow for more details on the potential opportunity.

Rick

So....FE is "sold" to folks with little money. Ummm...folks whose family probably can't come up with the money for the funeral while waiting for the FE policy to pay the claim (days or weeks later). What's the solution to this ethical dilemma (in my mind). Newby? Travis? Comments?

 

[SUPERSALESMAN205]

I would disagree that FE is for people with little money, most time I sell FE to people b/c of the lack of underwriting involvement (if you get what I'm saying)........ Also most people who are buying FE are elderly and their premiums aren't cheep....... Every case is different.

 

[briko3]

I thought that most funeral homes let you sign over policies for payment. It just requires that they get paid first with the remainder of the death benefit going to the family.

 

[DavidD1]

I would disagree that FE is for people with little money, most time I sell FE to people b/c of the lack of underwriting involvement (if you get what I'm saying)........ Also most people who are buying FE are elderly and their premiums aren't cheep....... Every case is different.

good point. FE is really nothing about cheap....its mostly about underwriting