That's true for the FE side of the company. But they still take them on the debit side. The home service agents are better equipped to keep people on the books after a failed draft. I got two policies issued this week on DE with them. I'm not a fan of drafting from DE, though. I think those clients are better served with regular agent collection. But I will write it that way if that's what the client wants.
You write FE and most pay annually?
It's not so much about the contracts for me, but about the corner of the business in which I was trained many years ago, and has always been a successful and enjoyable model for me, even though I don't and never have done that exclusively. But the contracts can be quite lucrative. I can't disclose specific details on an open forum, and the contracts vary from company to company. But speaking generally, the first year commissions are lower, but the renewals are usually quite a lot higher than the same policy in FE. The higher renewal rates are compensating the agent for the time he gives in serving these policyholders. You can also write these policies on other modes, like bank draft or DE, if that's appropriate for that client.
seems most of the companies that allow Home Service will pay 18%-20% on that business.. Plus the premium is usually 15%-40% higher than bankdraft so It can add up. For example one company I have, you can write 10K on their Fe plan on a 70 FNS for $51 per month.. On the home service (MDO) plan 10K would be $92 per month. First year commission rates are about the same but the home service pays a lot more due to the higher premium. The difference comes in after the first year.. The bank draft pays about $45 second year.. The home service pays $216.. I have never written an MDO with them, but I do have some on the books that I inherited from another agent. He gave them to me when he retired.. Only one of them has to be collected. The rest buy a money order and mail their premiums to me. On the one I collect, I have written 4 family members so far this year. She called yesterday to refer me to her 80 year old aunt that wants some "burial" insurance.
