Commission Split on Life Insurance with Customer?

[DHK]

Folks,
Please forgive me if this question is not appropriate by any means.

Here is my challenge... I am an individual planning to buy life insurance for my personal family protection. I have been doing lots of research. I do not need much guidance and know pretty much what I need. I am looking for a specific policy from Guardian which is kind of close to my needs.

I am planning to buy a large policy but I hate losing first 2 years on investment in agent commission and other fees. Its sadly the ugly side of whole life insurance as consumer loses in first 5 years.

Is it ok for me to ask the agent to split his commission with me in the first year to soften the burden? This large fee/loss has kept me on the side lines for last couple of years and its just too hard to bite the bullet and take a substantial loss.

Please advice how to proceed. I dont want to offend someone and dont know if it is something that will be acceptable to the agent.

thanks

What makes you feel that you are entitled to my compensation?

Did you ask your real estate agent to refund 50% of his commission back to you when you sold your house?

Are you going to share your commission with the people who spent time with you directly, wrote the articles, or created the youtube videos on how (you think) life insurance works?

Asking someone for money that you are not entitled to... IS offensive.

Let me share something else with you: every single penny you put into a life insurance policy is NOT "your money" for as long as you want it to secure the death benefit. If you withdraw the money, it lowers the death benefit. If you borrow against the policy reserve, you lower your net death benefit.

Since it's not "your money" (until you want/need it)... why not just count the whole thing as a "loss" and just do it for the right reasons?

 

[Gooner]

What makes you feel that you are entitled to my compensation?

Did you ask your real estate agent to refund 50% of his commission back to you when you sold your house?

Are you going to share your commission with the people who spent time with you directly, wrote the articles, or created the youtube videos on how (you think) life insurance works?

Asking someone for money that you are not entitled to... IS offensive.

Let me share something else with you: every single penny you put into a life insurance policy is NOT "your money" for as long as you want it to secure the death benefit. If you withdraw the money, it lowers the death benefit. If you borrow against the policy reserve, you lower your net death benefit.

Since it's not "your money" (until you want/need it)... why not just count the whole thing as a "loss" and just do it for the right reasons?

So to play devils advocate, I've always gotten 50% back from my real estate agents. Never paid more than 1.25% to a selling agent and never more than 1.5% to a buyers agent...that I employed.

What everyone here is ASSUMING is that the guy doesn't have adequate insurance in place. He very well me be covered with term and wants (but doesn't need) a CV policy...as he sees it at as a luxury purchase.

 

[BNTRS]

I know a lot of you are torching this guy, but I find what he's asking no more asinine than the umpteen emails I get every month from insurance agents who want me to tell them how to best design/sell various whole life or universal life products and not charge them anything to do it.

Some people just don't value other people's time and efforts. Best you can do in response is not value there's.

 

[critter]

You will likely find an agent willing to do this, but his or her competence will likely be so low that they policy you purchase will underperform any policy you would get from a highly professional agent who does not need to rebate to you.

 

[sirherbie]

Gooner as far as Real estate goes that's a tough one. I've actually done one better but it didn't work. I had an expensive piece of real estate to sell. I actually got a remax agent(who makes the full commission and doesn't split it with the office) to just wanted list it at a flat $4000 which came out to 1/4%. I like you just wanted someone to put it in the Mls. It took at least 30 emails to find and agent who would take my deal. Most people were insulted or didn't even answer. I also found out that some people who wanted to do it there managers wouldn't allow it. To make a long story short it didn't work out and I got frustrated after a yr of listing and went to a full service broker and it sold fast.

 

[Gooner]

Gooner as far as Real estate goes that's a tough one. I've actually done one better but it didn't work. I had an expensive piece of real estate to sell. I actually got a remax agent(who makes the full commission and doesn't split it with the office) to just wanted list it at a flat $4000 which came out to 1/4%. I like you just wanted someone to put it in the Mls. It took at least 30 emails to find and agent who would take my deal. Most people were insulted or didn't even answer. I also found out that some people who wanted to do it there managers wouldn't allow it. To make a long story short it didn't work out and I got frustrated after a yr of listing and went to a full service broker and it sold fast.

When I actually sell property, I usually pay under .5% to the listing broker...which is a good deal for them because all they do is put it on fmls and I do the rest

 

[sirherbie]

Yes and I did the same thing. But in a yr if it doesn't sell you have to try something different if you want to sell. And I assure you the guy that listed it for $4k will never do that again. He fielded at least 35 calls for showings and make nothing.I was in a hot area but it just didn't sell so you have to make a change.But overall theres still not many agents that will take 1/2 % especially if the house is under $300k as that's only $1500. There are services that will list for $750 are so and put it in the mls but they'll never show it.

 

[WCMason]

Folks, Please forgive me if this question is not appropriate by any means. Here is my challenge... I am an individual planning to buy life insurance for my personal family protection. I have been doing lots of research. I do not need much guidance and know pretty much what I need. I am looking for a specific policy from Guardian which is kind of close to my needs. I am planning to buy a large policy but I hate losing first 2 years on investment in agent commission and other fees. Its sadly the ugly side of whole life insurance as consumer loses in first 5 years. Is it ok for me to ask the agent to split his commission with me in the first year to soften the burden? This large fee/loss has kept me on the side lines for last couple of years and its just too hard to bite the bullet and take a substantial loss. Please advice how to proceed. I dont want to offend someone and dont know if it is something that will be acceptable to the agent. thanks

Firstly, your family is fortunate that you did not die in the last two years while you were "kept on the sidelines" as the substantial loss would've been theirs.

Secondly, any agent would be a fool to do this as nothing would prevent you from taking half that commission and then canceling the policy, sticking the agent with a chargeback of the entire commission. Since the agent did something illegal in writing the app it's not like he or she can go report you (though the agent does have a lot of personal information on you from the application and could mess with you quite a bit. That would be illegal, too, but the agent would have already shown that not to be a hindrance).

 

[rrajeshh]

I had posted a reply back few days back to this thread but somehow it did not appear in the thread.

I see we have tough crowd here, but I respect your blunt honestly.

I also see people have created assumptions on the commissions without inquiring about the details of policy. I am looking at a policy which will have approx 18K premium. I am also planning to overfund the PUA with 300K for first 2 years. I also plan to fund PUA going forward with 50-70K annually in years 3+. As I would like to do first 2 years together (back date policy), the commission would be ~20K in the first year itself. On going yearly commission would be ~$2.5K.

I know I will get flamed for saying this, but this is a very handsome reward for any agent for couple of days of work.

The question on commission split in the first year was asked by me with entire sincerity, as I did not find the answer to it anywhere on internet. The reason I asked it was because commission splits are very common in real estate and I did not want to overpay on policy by not knowing how WL works.

I know that there are many wise people in this forum who might understand cost value of money better than I do, but I am trying to learn and do the best I can. I am also doing my due diligence to make sure I get the best policy at best available terms

Thanks alot for your guidance. I honestly appreciate it!

 

[Lewis_FL]

Correct. That would seem very cumbersome to implement and some carriers strictly forbid rebating even if legal.