Final Expense Telesales Tips

[theinsuranceman]

Ive always felt like going on advance was better. I wish they'd pay a 12 month advance in some scenarios.

Yes, you must budget correctly, but during a time like this, the smart agent who budgeted on advance has a larger nest egg.

Advances are interest free loans. Why would any business man not take advantage of an interest free loan? Even if you don't need the money, you can take that interest free money and park it somewhere and earn some interest on it. Or expand your $$$ with recruiting, etc.

Of course for this to work you have to know how to handle money. Otherwise it's a bad thing for the irresponsible.

 

[NSRH]

Advances are interest free loans. Why would any business man not take advantage of an interest free loan? Even if you don't need the money, you can take that interest free money and park it somewhere and earn some interest on it. Or expand your $$$ with recruiting, etc.

Of course for this to work you have to know how to handle money. Otherwise it's a bad thing for the irresponsible.

Spot on.

 

[WinoBlues]

Advances are interest free loans. Why would any business man not take advantage of an interest free loan? Even if you don't need the money, you can take that interest free money and park it somewhere and earn some interest on it. Or expand your $$$ with recruiting, etc.

Of course for this to work you have to know how to handle money. Otherwise it's a bad thing for the irresponsible.

Good post.

The last paragraph seems less helpful right now.

Just my 2cents.

 

[jensing0406]

I've never heard an agency owner who does more production than me tell me price matters.

I only take business advice from those who are more successful than me.

Oh snap

 

[HoosierLife]

Good post.

The last paragraph seems less helpful right now.

Just my 2cents.

I hate to be the guy that agrees with Greg, but it's still the truth. We try to teach agents to put away 20% of every sale, use a separate checking account for commissions/biz expenses and pay themselves the minimum necessary until they get $10,000 saved up.

How many do that? Probably less than 5%.

Agents that have continued success and/or build successful agencies have a few things in common, but I would say having good money management skills tops the list.

 

[Newby]

Advances are interest free loans. Why would any business man not take advantage of an interest free loan? Even if you don't need the money, you can take that interest free money and park it somewhere and earn some interest on it. Or expand your $$$ with recruiting, etc.

Of course for this to work you have to know how to handle money. Otherwise it's a bad thing for the irresponsible.

And that states the problem. The majority of Americans (including agents) do not manage their money well. When they are early in this business and take advances they artificially feel like they are making more money than they actually are. Many good agents fail out early from not being able to manage the ups and downs of running their business.

I've always liked the feeling of companies owning me money. Not the other way around. It's just tortoise and haire stuff really.

 

[theinsuranceman]

I hate to be the guy that agrees with Greg, but it's still the truth. We try to teach agents to put away 20% of every sale, use a separate checking account for commissions/biz expenses and pay themselves the minimum necessary until they get $10,000 saved up.

How many do that? Probably less than 5%.

Agents that have continued success and/or build successful agencies have a few things in common, but I would say having good money management skills tops the list.

Josh, why would you hate agreeing with me? Every time you agree with me you're showing that you're a pretty smart guy...lol.

 

[NSRH]

And that states the problem. The majority of Americans (including agents) do not manage their money well. When they are early in this business and take advances they artificially feel like they are making more money than they actually are. Many good agents fail out early from not being able to manage the ups and downs of running their business.

I've always liked the feeling of companies owning me money. Not the other way around. It's just tortoise and haire stuff really.

Good points.

However, the majority of Americans should also not be opening up a business or getting into 100% commission sales.

A responsible business owner should welcome any and all cash infusions into their business at a 0% interest.

 

[theinsuranceman]

And that states the problem. The majority of Americans (including agents) do not manage their money well. When they are early in this business and take advances they artificially feel like they are making more money than they actually are. Many good agents fail out early from not being able to manage the ups and downs of running their business.

I've always liked the feeling of companies owning me money. Not the other way around. It's just tortoise and haire stuff really.

Yea most people don't know how to hang onto a dollar. They need to learn to put it away where it won't see daylight for a few years...lol.

And this is a business, a FE franchise if you will. Business owners that don't know how to manage cash flow, generate sales that are profitable, and save for a cushion usually go belly up.

If I was dealing with a carrier that charges interest on advances (I've heard there are some out there) I might reevaluate.

Newby, I know there is a psychological comfort in a steady base of renewals you can count on every month even if you don't do any work that month. But to me this is like Dave Ramsey.

As clever as he is, he misses the mark on paying down credit card debt. Here's an ex:
Let's say you have 3 credit card balances that you can not pay off immediately. Dave says pay off the card with the smallest balance 1st, then onto to the card with the next largest balance, etc. It gives you psychological momentum which is good.

Mathematically Dave is wrong. You would get all 3 cards down to a zero balance faster if you paid the same monthly payments above EXCEPT your payments go primarily to paying off the card with the HIGHEST INTEREST RATE first, not the card with the smallest balance. Then on to the card with the 2nd highest interest rate, etc.

And when all 3 cards were brought down to a zero balance, if you added up your payments for both scenarios, you'd find you spent less $$$ in the second scenario than you spent in the 1st scenario while getting the exact same result.....3 credit cards down to a zero balance.

If the interest on the cards is business related that would be tax deductible. But your payments on the credit card principle far outweighs the deduction for the interest.

 

[shonceman]

Yea most people don't know how to hang onto a dollar. They need to learn to put it away where it won't see daylight for a few years...lol.

And this is a business, a FE franchise if you will. Business owners that don't know how to manage cash flow, generate sales that are profitable, and save for a cushion usually go belly up.

If I was dealing with a carrier that charges interest on advances (I've heard there are some out there) I might reevaluate.

Newby, I know there is a psychological comfort in a steady base of renewals you can count on every month even if you don't do any work that month. But to me this is like Dave Ramsey.

As clever as he is, he misses the mark on paying down credit card debt. Here's an ex:
Let's say you have 3 credit card balances that you can not pay off immediately. Dave says pay off the card with the smallest balance 1st, then onto to the card with the next largest balance, etc. It gives you psychological momentum which is good.

Mathematically Dave is wrong. You would get all 3 cards down to a zero balance faster if you paid the same monthly payments above EXCEPT your payments go primarily to paying off the card with the HIGHEST INTEREST RATE first, not the card with the smallest balance. Then on to the card with the 2nd highest interest rate, etc.

And when all 3 cards were brought down to a zero balance, if you added up your payments for both scenarios, you'd find you spent less $$$ in the second scenario than you spent in the 1st scenario while getting the exact same result.....3 credit cards down to a zero balance.

If the interest on the cards is business related that would be tax deductible. But your payments on the credit card principle far outweighs the deduction for the interest.

I'm definitely not a Ramsey follower, but I believe he has answered that objection to his idea of "debt snowball". His reasoning for paying off low balances first is psychological, not mathematical. Most people do better if they see tangible progress. Getting rid of smaller debts first makes the progress more visible. You're correct about the mathematics, but he's recognizing the element of human nature in his followers.

(Oddly enough, though, his argument against whole life is based purely on mathematical logic. Well, that, and he has a guy....)