Client asking about commission
- Thread starter JJ2713
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- 5,778
First concern is where that question came from...
- they are concerned that you are going to get paid for what you are doing for them
- they are just being nosey
- they are being skeptical (which may indicate issues with your presentation)
I would be cautious about going to detail about that question.
- 11,272
I am paid in direct proportion to the guarantees and the length of premiums to be paid to the insurance company.
For a $100,000 ten-year term policy, I am paid a certain amount.
For a $1,000,000 whole life policy, I am paid a certain amount.
For a $100,000 SPWL policy, I am paid a certain amount.
The difference in compensation is based on guarantees and how long premiums are paid.
Of course, that all depends on what problems the products are solving for the client to make sure it's worthwhile and makes sense for the situation.
So, I am paid for doing the following tasks for each sale I make:
- 20% of the sale for reaching out to you via referral or professional introduction (prospecting)
- 20% of the sale for going through a discovery session to find out what you want (fact-finding)
- 20% of the sale is for knowing how my products work (product knowledge in context of the fact-find)
- 20% of the sale is for knowing how to present the product so that you understand how it works and fits with your goals and objectives. (Proposal generation)
- 20% of the sale is for getting the product placed - ideally on favorable or client expected terms (field underwriting).
This is my profession and it requires high level skills. These are the skills that I have to bring to each successful sale.
If you work for an agency or brokerage firm, you can further elaborate by saying: "A commission is generated to my agency/firm and then they share a portion of that with me. That's only fair, isn't it?"
For a $100,000 ten-year term policy, I am paid a certain amount.
For a $1,000,000 whole life policy, I am paid a certain amount.
For a $100,000 SPWL policy, I am paid a certain amount.
The difference in compensation is based on guarantees and how long premiums are paid.
Of course, that all depends on what problems the products are solving for the client to make sure it's worthwhile and makes sense for the situation.
So, I am paid for doing the following tasks for each sale I make:
- 20% of the sale for reaching out to you via referral or professional introduction (prospecting)
- 20% of the sale for going through a discovery session to find out what you want (fact-finding)
- 20% of the sale is for knowing how my products work (product knowledge in context of the fact-find)
- 20% of the sale is for knowing how to present the product so that you understand how it works and fits with your goals and objectives. (Proposal generation)
- 20% of the sale is for getting the product placed - ideally on favorable or client expected terms (field underwriting).
This is my profession and it requires high level skills. These are the skills that I have to bring to each successful sale.
If you work for an agency or brokerage firm, you can further elaborate by saying: "A commission is generated to my agency/firm and then they share a portion of that with me. That's only fair, isn't it?"
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- 11,272
The only other thing I may add is that the commission isn't paid OUT of their policy but it is BASED on their policy.
The insurance company pays me to bring them business on favorable terms.
Because of all the regulations with policies, there is no discounts for NOT going through an agent. If you contact the insurance company directly and ask for the same policy but "with no commissions"... the policy would be the exact same thing.
While I can charge fees (if I set up the right legal documents, etc.), I'd rather just let the insurance company pay me rather than charging planning fees out of YOUR pocket.
The insurance company pays me to bring them business on favorable terms.
Because of all the regulations with policies, there is no discounts for NOT going through an agent. If you contact the insurance company directly and ask for the same policy but "with no commissions"... the policy would be the exact same thing.
While I can charge fees (if I set up the right legal documents, etc.), I'd rather just let the insurance company pay me rather than charging planning fees out of YOUR pocket.
PInnacleQuote
Expert
I always tell the client exactly what I make, if he asks. I always make it clear though, there are no hidden fee's and he doesn't pay me anything, when the policy is approved and paid for the insurance company pays me.
- 29,467
Good stuff Bob!!! I agree...do what's best for the client, and we'll be compensated down the road by the client taking out additional policies with us and sending referrals our way. I don't pay much attention to the bonuses either...unless they're on a company that I'm already using.
- 15,041
The nature of the question makes me think it is actually a hypothetical.
You'll find almost no one worth doing business with will actually ask this question. The people who ask will never buy and you really don't want as a client anyway.
If for some reason it is coming up repeatedly, then you probably need to revisit your presentation and style.
Now sometimes I do get asked how I get paid, and I just tell them the truth. The company pays me for sending them business.
You'll find almost no one worth doing business with will actually ask this question. The people who ask will never buy and you really don't want as a client anyway.
If for some reason it is coming up repeatedly, then you probably need to revisit your presentation and style.
Now sometimes I do get asked how I get paid, and I just tell them the truth. The company pays me for sending them business.
