FE Comission Vesting

[rousemark]

At my age, vesting of commissions after termination becomes a primary concern. I kick the bucket, I want my family to receive the commissions as long as possible. After reviewing all the contracts I have, I have come to the conclusion that Settlers has the cleanest vesting contract I have.

Where many companies pay almost no renewals or claim that the renewals after X year are service fees which are not vested, Settlers pays a lifetime "commission" (not a service fee") which is fully vested. They will continue to pay renewals until the commission falls below $180.00 per year. With a lot of companies they will quit paying commission after the commission falls below $600 per year. Settlers pays full commission after termination unlike some companies, UNL for example, that reduces the commission payable by 5% of the premium paid. Columbian has good vesting on their ordinary contract but on the FE contract, they quit paying if the policy count falls below 20.

 

[goillini52]

At my age, vesting of commissions after termination becomes a primary concern. I kick the bucket, I want my family to receive the commissions as long as possible. After reviewing all the contracts I have, I have come to the conclusion that Settlers has the cleanest vesting contract I have.

Where many companies pay almost no renewals or claim that the renewals after X year are service fees which are not vested, Settlers pays a lifetime "commission" (not a service fee") which is fully vested. They will continue to pay renewals until the commission falls below $180.00 per year. With a lot of companies they will quit paying commission after the commission falls below $600 per year. Settlers pays full commission after termination unlike some companies, UNL for example, that reduces the commission payable by 5% of the premium paid. Columbian has good vesting on their ordinary contract but on the FE contract, they quit paying if the policy count falls below 20.

Damn...you're right, Settlers renewals are really good! 4% for life. I'm just starting to add a few companies(just added Settlers)... I'll have to look closer at that. I'd noticed that FE renewals weren't high, but I didn't realize how bad they were! I just looked at the 2 I've mostly used up to now, and they both suck after 10 years! Oxford Life pays 0% after 10years and American Continental's not much better at 1.5%. Hard to plan for retirement with those #'s!

 

[RichMcK]

rouse, I am really glad you brought this up. Renewals need to be brought to the attention of all us. Not that long ago Monumental re vamped their commission schedule = increased 1st year and CUT renewals. Pay raise???? I've been selling ins. for over 35 years. All along companies cut, then cut more. The agent is always taking a hit.

 

[goillini52]

rouse, I am really glad you brought this up. Renewals need to be brought to the attention of all us. Not that long ago Monumental re vamped their commission schedule = increased 1st year and CUT renewals. Pay raise???? I've been selling ins. for over 35 years. All along companies cut, then cut more. The agent is always taking a hit.

I was recently told that this is what lot's of agents want...front loaded FYC and lower renewals. I guess a lot of carriers are going to this. The only way it makes sense is if the agent wants it up front because it won't hurt as bad in the pocket if the customer dies or lapses after a couple of years.

 

[rousemark]

I was recently told that this is what lot's of agents want...front loaded FYC and lower renewals. I guess a lot of carriers are going to this. The only way it makes sense is if the agent wants it up front because it won't hurt as bad in the pocket if the customer dies or lapses after a couple of years.

That may be what salespersons want but it shouldn't be what agetns want. If you are just going for the sale and hope to keep it for a year or are planning on going back the next year and rolling the business in order to get a new first year commission, then the front load is best. But if you are an agent that plans on servicing the best interest of your clients over the years, then the renewals are important. However, most companies are only at about 110% street.. I think Settlers is 105% and by the end of the second year you are even. After that it is Settelrs head and shoulder s above most of the rest. But my focus is not only who pays the highest renewals but who pays them the longest after termination. It seems a lot of companies want to restrict their payment of renewals as much as they can get by with. Not so with the current Settlers contract.

 

[goillini52]

That may be what salespersons want but it shouldn't be what agetns want. If you are just going for the sale and hope to keep it for a year or are planning on going back the next year and rolling the business in order to get a new first year commission, then the front load is best. But if you are an agent that plans on servicing the best interest of your clients over the years, then the renewals are important. However, most companies are only at about 110% street.. I think Settlers is 105% and by the end of the second year you are even. After that it is Settelrs head and shoulder s above most of the rest. But my focus is not only who pays the highest renewals but who pays them the longest after termination. It seems a lot of companies want to restrict their payment of renewals as much as they can get by with. Not so with the current Settlers contract.

I roll Medicare Supplements every couple of years, but that is in the customer's best interests because of premium increases...if I don't do it someone else will. I don't see how you can roll FE policies like that without screwing the customer unless you can save them money/give them more face amount...they haven't built up any cash value...and their health hasn't changed. Since FE premiums don't go up, how likely is that?

 

[Newby]

Renewals are great but I would never count on building a retirement off them. Most of your FE and Med Sup clients will die off by the early years of your retirement.

You plan your retirement by selling yourself annuities every year, let them defer and then turn on the lifetime income.

 

[rousemark]

Renewals are great but I would never count on building a retirement off them. Most of your FE and Med Sup clients will die off by the early years of your retirement.

You plan your retirement by selling yourself annuities every year, let them defer and then turn on the lifetime income.

What you say is true.. But why should an agent walk off (or die) and leave the renewals behind unnecessarily? I have renewals coming in from business written as long as 20 -25 years ago.. But I have even more that is not being paid because I did not pay serious attention to the vesting provisions of the contracts.

 

[smokin goose]

Renewals are great but I would never count on building a retirement off them. Most of your FE and Med Sup clients will die off by the early years of your retirement.

You plan your retirement by selling yourself annuities every year, let them defer and then turn on the lifetime income.

I had thought about this too. Buy one every year and turn em on when you want on down the road.

 

[RichMcK]

Renewals are great but I would never count on building a retirement off them. Most of your FE and Med Sup clients will die off by the early years of your retirement.

You plan your retirement by selling yourself annuities every year, let them defer and then turn on the lifetime income.

While what you say is true, the insurance companies have lowered renewals to ridiculous levels. When renewals were higher, first year 100% + contracts were available, just as they are now. I think the companies found a way to increase profits at the expense of the agent. Remember companies do not make profit in the first couple of years, it's in the subsequent years when profits increase.