Final Expense Telesales Tips

[rousemark]

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.

 

[rousemark]

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.

With many companies advances are not interest free.. I have seen companies levy charges up to 1% per month on the balance..

 

[theinsuranceman]

With many companies advances are not interest free.. I have seen companies levy charges up to 1% per month on the balance..

That's not good for the agents, the ones who bring in the sales day in and day out. I'm glad SL doesn't do that.

1% interest per month equates to 12% annual interest rate. That's highway robbery! The prime as of today is 3.25%. That 1% monthly interest rate lowers that FYC % a little bit doesn't it?

Do you think the recruiters who are brokers tell their new agents about these interest charges on their advances? Or is it a hidden secret?

 

[Newby]

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.

Of course you would pay off high interest debt before paying off low interest debt. Much of what Dave a Ramsey says makes no sense. For instance he practically guarantees that his "advisors" can sell you growth stock mutual funds that will AVERAGE 12% returns annually (this is BS of course but he pitches it every day to drive traffic to his "endorsed local advisors" to collect his fees. Yet in the same sentence he "advises" people to pay off their 4% mortgage in full. Common sense would tell you if 12% growth is such a sure thing why not borrow the max you can get at 4% and pocket the 8% difference?

No I'm not a fan of Dave's advice. I am a huge fan of his pitching style though. Who else has packaged up simple stuff that everyone knows (spend less than you make) and sell it back to the masses? He's a great pitch man.

 

[Newby]

That's not good for the agents, the ones who bring in the sales day in and day out. I'm glad SL doesn't do that.

1% interest per month equates to 12% annual interest rate. That's highway robbery! The prime as of today is 3.25%. That 1% monthly interest rate lowers that FYC % a little bit doesn't it?

Do you think the recruiters who are brokers tell their new agents about these interest charges on their advances? Or is it a hidden secret?

They probably put it right in their recruiting pitches. I think I've seen one promoting that they charge 140% interest on advances. Which is strange because they only pay around 85% commission on FE.

 

[shonceman]

With many companies advances are not interest free.. I have seen companies levy charges up to 1% per month on the balance..

I used to see that from different companies, but I don't see it much anymore. But that's just me. I haven't looked at a new advanceable contract in quite awhile. What companies do you know of that are still charging interest on advances?

 

[NSRH]

With many companies advances are not interest free.. I have seen companies levy charges up to 1% per month on the balance..

In those cases.... Id 100% go as earned.

 

[WinoBlues]

I hate to be the guy that agrees with Greg, but it's still the truth.

How many do that? Probably less than 5%.

I was not disagreeing with him. I just thought the post would have been better with out the last paragraph. For tips for today's world. Which is different from yesterday's world.

 

[theinsuranceman]

Of course you would pay off high interest debt before paying off low interest debt. Much of what Dave a Ramsey says makes no sense. For instance he practically guarantees that his "advisors" can sell you growth stock mutual funds that will AVERAGE 12% returns annually (this is BS of course but he pitches it every day to drive traffic to his "endorsed local advisors" to collect his fees. Yet in the same sentence he "advises" people to pay off their 4% mortgage in full. Common sense would tell you if 12% growth is such a sure thing why not borrow the max you can get at 4% and pocket the 8% difference?

No I'm not a fan of Dave's advice. I am a huge fan of his pitching style though. Who else has packaged up simple stuff that everyone knows (spend less than you make) and sell it back to the masses? He's a great pitch man.

If you told me 30 years ago people would be buying bottled water I would have said you were crazy. But here we are.

 

[theinsuranceman]

This post sure is a lot nicer without all the cussing and fussing. Anyone agree?