Farmers' or independent agent? Advice needed

Sep 26, 2008

  1. colomb
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    colomb Guest

    Hi All,

    It's so great to find this online community! I'm now facing a very important turning point in my life and I need your advice and help badly.

    Recently I kept receiving emails from district managers of Farmers inviting me to become an agent with them. As it's so hard to find an appropriate job currently due to age (50), non-American education background and maybe, the
    bad economic situation, I have to consider this career change very seriously. By browsing this forum, I got to know there are basically two kinds of agents, one works for a specific company and another represents a group of companies. My key questions are:

    1) Which kind of agent is the best, their pros and cons?
    2) How long will it take to get the mandatory licences(assuming all pass at the first test)?
    3) What are the mandatory licences I'll have to get?
    4) How long will it take for me to start earning if I put all my efforts?

    I'd been a real estate agent for a couple of years which was absolutely a self-employed position, so I know the hardships of being an commission based agent. Please let me know your suggestions and advice so as to make final decision.

    Thanks in advance.
     
    colomb, Sep 26, 2008
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  2. patch36
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    patch36 Guru

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    Re: Farmers' or independent agent? Advice needed.

    You have to learn the business somewhere. Some places are more expensive than others. For me, Farmers falls in that category.

    I started with them when I was 49. Left just before 51 and went independent. I make way more money than any of my Farmers career school classmates, even those who were handed a book of business.

    Licensing can take a week or two for the initial Life and Health. Depends on how well you can take tests and study.

    Look at Medicare Advantage and Supplements, Final Expense and Fixed Index Annuities. In that order, if you want to get a fast start. Look quickly because all the training and prep for the upcoming enrollment period is happening right now. Go to medicare.gov and see what plans are available in your area and then come here and find a good FMO to get appointed through. NOT Parker or any of their shell companies.
     
    patch36, Sep 26, 2008
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  3. MoonCrowe
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    MoonCrowe New Member

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    Re: Farmers' or independent agent? Advice needed.

    There are always pros and cons to captive (working for a specific company) and Independent. If you are looking at the Life end of the business both can be very lucrative. I was an independent P&C broker in Ca for over a decade. What you get by being captive is instant name recognition, reputation and advantageous national advertising.

    As an independent, you get all the cash, but you also get ALL the expenses, in Ca the yellow page ad alone finally got me. (I was walking the high risk side of the street, so renewals weren't that hot)

    I am now going captive with Farmer's but my case is different, my Dad was a Farmers agent for 35 years and we share a name.
     
  4. patch36
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    patch36 Guru

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    Re: Farmers' or independent agent? Advice needed.

    ...and a huge book of business no doubt. A very rare happening, and as long as you have that 35 year old book of business to support your office...you are bulletproof. Not a very good example for someone new in the business who is going down this road.

    Great for you that dad can hand you that, but most new agents on the career path have to meet a lot of numbers/goals and take loans against a production promise that is difficult at best to meet, and even when they do it is a subsistence existence.
     
    patch36, Sep 26, 2008
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  5. Reuben
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    Reuben Super Genius

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    Re: Farmers' or independent agent? Advice needed.

    So far no one has mentioned the poverty trap that Farmers' will put their new agents under once they sign on to go "captive" (an apt name in this specific instance.).
     
    Reuben, Oct 1, 2008
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  6. xrac
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    xrac Guru

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    Re: Farmers' or independent agent? Advice needed.

    My friend was with Farmers about 5-6 years. He like to starved. Since he left farmers and went independent his income has quadrupled.
     
    Last edited: Oct 1, 2008
    xrac, Oct 1, 2008
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  7. Crazy Rick
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    Re: Farmers' or independent agent? Advice needed.

    It depends sir, Indy? Captive? Some folks here said it right. With indy, you get all the expenses. And THEY ADD UP VERY QUICKLY. Stationary, leads (at the low end is $13 per lead, per day), basic advertising, gasoline, cable service for your computer, paper for your fax and ink for the printer, business cards. This is just the basics mind you. This is the bare bones of what you’ll need to begin.

    Even if you love your new found freedom and enjoy insurance like I do, the mortgage company doesn’t care: they want their money and since the banking industry is in the shitter and most people are afraid of losing their life savings thanks to that knit whit in the white house scaring Americans AGAIN, and unemployment is at an all time high, nobody is buying anything. I don’t care what anyone on this forum says. Three of my closest friends all lost their jobs within the last month. I’m down to my last $6 that I have in my wallet and that I got from my girlfriend who is a tenured schoolteacher. I have no reason to lie, $6 is all I have. I can’t even afford life insurance and therefore don’t have any. I switched banks because Commerce was 35 miles from my house and I can’t afford that trip anymore. It gets very disheartening very quickly when you’re in a business you love and understand and you get 80 year old grannies on the phone that balk at a $4500 dollar LTC premium. And the bills just keep mounting up at a daily rate and you have to contemplate giving up your indy lifestyle that you trained so hard and for so long to achieve. As you can read, being an Indy, right out of the box is very difficult.

    Learn at first by being a captive. If you love what you do, you’ll be able to ignore working weird hours and dealing with cry-babies and superfluous office rules and ridiculous, insurmountable quotas and asinine demands from greedy office owners whose operation was bank-rolled by their mommy and daddy.

    Learn and save some money; you’ll need it if you want to branch out on your own –it’s that simple. Some folks here suggest a year’s salary, some folks will or have suggested less, but it’s all the same. You’re going to need working capital to finance your independent lifestyle (above) right away and if you have little ones at home or a $6k a month mortgage, then the answer should be obvious unless you have investors on standby ready to finance your new business.

    Some people work better in a structured environment like being a captive, others, like myself don’t. List your weaknesses and strengths and all of your financial obligations. If you begin your new career as a captive, you didn’t lose anything by jumping in as an indy and going broke.

    Good luck to you sir.
    -Rick

     
  8. RayGroupInsurance
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    RayGroupInsurance Super Genius

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    Re: Farmers' or independent agent? Advice needed.

    Wow, he got way off topic. Let me clear up some of what he mentioned, first of all you can buy leads for much less than $13. I pay $6 for all of my leads, but you can get them even cheaper if you're willing to pick up the phone and do some cold calling on your own. Secondly, this is off topic, Bush is not to blame for the economy right now and we don't have record levels of unemployment. Rick sounds like an angry person that is about to lose his agency he has worked most of his life to build. I feel bad for him, but this is not the place to vent.

    I am a captive agent and have been one for 1 year now. I tried to start with Farmers 2 years ago while I was working a full time job, I would sell insurance during the evenings after my regular job. That didn't work out very well for me so I bought an agency from Allstate. As far as I know Allstate is the only Captive company that lets you buy an existing agency, you might want to look into that. In my state you have to have your license for 3 years before you can consider going independent so I am biding my time and doing some research on this forum.

    People have mentioned that you have more expenses as an indy and I'd imagine that's true, just know that as a captive you are responsible for many of the things they mentioned. At Allstate I get free yellowbook advertising during my first year only than it's up to me. I pay for my own ink, paper, advertising, leads, postage, etc. If I hit certain goals than the company will give me a bonus in the form of paying 50% of those expenses up to a certain amount each year. I think Farmers had a similar thing where they will give you a certain amount for office expenses if you hit your goals.

    I hope that helps, I was very interested to see the responses to your question as this is something I am considering in the next 2-3 years, but most of the answers haven't been too helpful so far.
     
  9. Crazy Rick
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    Re: Farmers' or independent agent? Advice needed.

    "I pay $6 for all of my leads..." -Yeah, and they're shared for that price, explain that to the new guy.

    "Bush is not to blame for the economy right now..." -I didn't say he was to blame, I said he was scaring Americans AGAIN.

    I'm not about to lose my agency, but thanks for the empathy. I'm just tired of tire kickers and pestering and pestering and pestering and mailing hard copy and convincing the prospects that the prices are fixed only to have prospects refuse to pick up the phone and discuss.

    Despite what other agents here say: Yes, they are shopping like it's Walmart. Wouldn't you? I was explaining to the new guy that no amount of proof is going to get some if not most people to buy nowadays when we're all pinching pennies and have to decide between eating or putting that money away for next year's Life Insurance premium.

    The shopper's mindset is 95% of the buying public and it really is this simple: "Hmm, ya know, I don't have Health Insurance. So I'm going to go online and click on that banner ad that I saw. I'm sure forty agents will call me soon after so I'll put down a phony phone number, after all, all I want is a ball park figure of what I'm in for and I don't want to talk to anyone and can't really afford it, but I just want to see. Hmm, here it goes. Wow! I was right! Five minutes later, seventeen agents emailed me. Three of which included these attachements called proposals. One premium is for wow! $10,000 a year and the lowest is $6,000 a year, but wait, what's this Daily Benefit thingy? Oh, Long Term Care? What did I click on? Oh well, I can't afford it anyway, I'll just keep these in my desk till I'm older and need it."

    With this typical mindset, you can see this is a waste of a prospect and $13. The only way to get a hold of them is via U.S. mail and no amount of convincing will change their mind; they don't even know what product they need! Even if they did, they can't afford it!

    "I am a captive agent and have been one for 1 year now. I tried to start with Farmers 2 years ago while I was working a full time job, I would sell insurance during the evenings after my regular job." -This sounds like the way to go. I advised the new guy to check his strengths and weaknesses, maybe he's cut out for being a captive and wouldn't enjoy going broke by chasing down ignorant people from the ghettos of New Jersey who don't even know how to spell the word: Insurance. I don't think he'll enjoy pestering 80 year old grannies via the U.S. mail
    trying to convince them, since they don't have any protection now, a little is better than nothing. Ring, ring, ring. Oh, look at that, her answering machine is on again. What didn't I do correctly? Hmmmm, nothing! Did everything by the book and still get an answering machine after the tenth call. What a waste of another $13 dollars.

    "I think Farmers had a similar thing where they will give you a certain amount for office expenses if you hit your goals." -Oh, those insurmountable "goals" we all hear about. Didn't someone above say "He liked to starve" or words to that effect? What does this tell you and the new guy? It's supposed to tell you that the Executives like a rigged game. This is what they do, and they laugh all the way to the bank each evening. The rules are purposely written in their favor. Didn't another guy above say new captives are put in the poverty bowl once they sign on the dotted line. How is this a way to make a living?

    I'm not saying there's one correct answer and notice my proper grammar. The new guy has only three choices and starting out in this industry without financial backing isn't the route to take. He may have the finances to go indy, he didn't indicate so. He may work part time at night like you did, which seems the way to go.

    Angry? You bet your ass I'm angry. Read my scenario above again and tell me I'm wrong. I know, I know, "Rick, you're going after people that ARE shopping instead of prospects that need coverage right away." I can't stop the shoppers folks. If they need coverage right away, I make so easy for us to hook-up, I may as well be living in their basement with my briefcase and four different proposals at the ready.

    It's as simple as the scenario above. You got to give me at least that much. :skeptical:
     
  10. djs
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    djs Super Moderator Moderator

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    Re: Farmers' or independent agent? Advice needed.

    Hmm, I've heard of this with State Farm, but never with Farmers. I know several Farmers agents, they don't mention this. Are you sure you have the right company?

    Farmers does give 'incentive' money that is effectively a loan that gets waived if you make certain numbers. Outside of that, you have your own expenses, which can be fairly minimal.

    Dan
    - - - - - - - - - - - - - - - - - -

    This is true in most P&C captive situations as well. Even as a captive, it is your agency, your company, and therefore, your bills.

    Dan
     
    Last edited: Oct 2, 2008
    djs, Oct 2, 2008
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