Company I am with only accepts ACH draft through routing/account as payment

[shonceman]

What type of clients actually keep up a policy via mailing in a MO? Logic would say the persistency just has to stink on that business?

You might be surprised. But you're right that you can't depend on everybody to do it. But I have a few that do mail it faithfully.

 

[rousemark]

What type of clients actually keep up a policy via mailing in a MO? Logic would say the persistency just has to stink on that business?

The majority of these few did not start off mailing their premiums in. The agent collected their premiums.. However, when the agent started having some health problems, he asked them to mail him a money order each month. Their coverage was several years old and they did not want to lose it so they did. The mail a money order along with their collection book. I mark their book and mail it back to them along with a stamped envelope to use the next month. He probably had quite a few that never did mail but that was before I got involved so I have no idea how many. Of those I received I have lost about 2% of them over the last three years.

 

[shonceman]

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.

LBL Home service rates are in the range of their SIMPL Standard on the FE side. The home service premiums aren't rated for tobacco, so sometimes for a smoker I can get a rate that's lower than the preferred rate on FE. Underwriting has some differences, too. For example, a hospital stay in the last year is a knockout for FE, the home service app is only 90 days. I wrote a couple last year where I put the wife on SIMPL Preferred, but because the husband smokes the HS policy was cheaper for him.

 

[eersfan]

You write FE and most pay annually?

I don't write FE and never have. My clients are mostly corporate and use over-funded permanent insurance for deferred comp.

 

[TampaHound]

You might be surprised. But you're right that you can't depend on everybody to do it. But I have a few that do mail it faithfully.

I'm actually surprised by that. What I generally tell people is that it's easier and simpler for all parties to open a checking/savings account. I've been known to show them how to keep a checkbook or access their account on line.

I've been known to tell them "DON'T get a debit card since you're not keeping track of what you buy." If you just use cash, you always know what you got.

Of course, most of the companies I work with don't accept the MO's either.

 

[shonceman]

I'm actually surprised by that. What I generally tell people is that it's easier and simpler for all parties to open a checking/savings account. I've been known to show them how to keep a checkbook or access their account on line.

I've been known to tell them "DON'T get a debit card since you're not keeping track of what you buy." If you just use cash, you always know what you got.

Of course, most of the companies I work with don't accept the MO's either.

I've written people on home service who had a FE agent drive them to the bank to set up an account. Of course it failed and the policy lapsed. If you're talking to people who are middle aged and older who don't have checking accounts, it's not usually because they've never had one. It's because they can't manage one.

 

[TampaHound]

I've written people on home service who had a FE agent drive them to the bank to set up an account. Of course it failed and the policy lapsed. If you're talking to people who are middle aged and older who don't have checking accounts, it's not usually because they've never had one. It's because they can't manage one.

I spent most of my life in banking. So I spent a lot of time educating people on that very thing. Often it's just a matter of behavior, and with all the tools and access people have today...it's nearly impossible to overdraw your acct.

 

[shonceman]

I spent most of my life in banking. So I spent a lot of time educating people on that very thing. Often it's just a matter of behavior, and with all the tools and access people have today...it's nearly impossible to overdraw your acct.

And yet they do! The tools and access, etc. are great for most people. But when lack of discipline and/or self control are part of the picture, any payment method is going to be a problem (including agent collection). However, a good home service agent has ways to handle the inevitable payment problems.

Michael gave good advice to FE agents above when he said to filter for income above $15k to weed out most of that business. Leave the 0-15k crowd to me!