Final Expense Vs. Other Life Products

[chrisbeyersinut]

I have a limited budget and limited time, of course. I am trying to decide where to focus my efforts and resources moving forward. I would love to hear from experienced agents, what their thoughts and perspectives are on focusing on final expense vs. other life products.

Obviously final expense is an easier sell, with smaller face amounts and less underwriting. But does the smaller commission offset this? In terms of where to spend time, money and effort what have other agents found is a better return? Easier sale, with less commission or more difficult sales with higher commissions?

 

[xrac]

It probably easier to get started in FE unless one has a strong natural market. However, more and more people are going into FE so some markets may become crowded.

 

[jdeasy]

I have a limited budget and limited time, of course. I am trying to decide where to focus my efforts and resources moving forward. I would love to hear from experienced agents, what their thoughts and perspectives are on focusing on final expense vs. other life products.

Obviously final expense is an easier sell, with smaller face amounts and less underwriting. But does the smaller commission offset this? In terms of where to spend time, money and effort what have other agents found is a better return? Easier sale, with less commission or more difficult sales with higher commissions?

What smaller commissions are you talking about?

As for an easier sell, it is and it isn't. It's a simple product but it's a very difficult to understand market.

I see MA salesmen coming into FE everyday and failing miserably. Same for the MP agents.

There's money to made and sales to be made in every market. Med sups may be the easiest of them all but that doesn't mean it's easy to do.

If you are looking for "easy" you won't find it in the insurance field.

 

[Josh]

I see MA salesmen coming into FE everyday and failing miserably. Same for the MP agents.

"What? There's a premium?"

MA agents crack me up. When I was a carrier rep they'd always beat their chest about how much they've sold. Every now and again I'd sit one down and say "Wow. Great job. How many premium checks did you collect?" I'd then follow it up with telling them that this was the easiest money in the world to make in the insurance world (F%$# MIPPA). One girl I know wrote over 3k apps in one year, but she was in a great market, no one could beat the product, she'd been doing it for a while, she had the marketing budget of one of the largest health insurance companies in the country providing her seminars with 100 people in a room at a time (ok, might have only been 50), and she was a gorgeous. Her "twin" only did about 2,500 if I remember correctly and in her pitch she pointed out that the carriers don't even get the entire Part B premium to cover the cost of the $0/month plan, it's only a portion of the Part B premium. Geniuses, freakin' geniuses. Good for them though.

MA agents, crack me up.


To the OP's question, if you have limited time and a limited budget you may want to rethink the way you're trying to get some extra money. The commissions on FE are great (not LTC or annuity commissions), a $75/month plan = what most people make in two weeks at a "real job". Now that's not the average, but it's not unrealistic. That said, it takes time (and money) to learn how to get good at selling anything, including life insurance. It's going to cost money to generate leads and once you have leads you're going to screw up on the first pile you have and miss out on some sales. It takes a lot of time and some decent coin. Even if you cold call ($59/1,000 cold leads/calling records) it's going to take a great deal of time to generate your leads. Most folks only get 4-8 leads per full day of calling. If you don't have the time to do that you can drop direct mail and work lead cards at $400-$450/1,000. At a 1% response rate (could be higher or lower) that's $40-$45/lead card. Some of those are going to be junk and so you'll be calling through those finding folks with dementia and all sorts of other great stuff that means they weren't really interested. If you don't buy a cheap calling list to get over your fear of calling on you're going to be cutting your teeth on lead cards that cost you a small fortune.

That's basically the story for nearly any other type of life insurance too. Is it worth that kind of time and money to invest in a career that tons of other companies are recruiting too? That's the question I'd be giving thought to if I were in your situation.

 

[chrisbeyersinut]

What smaller commissions are you talking about?

As for an easier sell, it is and it isn't. It's a simple product but it's a very difficult to understand market.

I see MA salesmen coming into FE everyday and failing miserably. Same for the MP agents.

There's money to made and sales to be made in every market. Med sups may be the easiest of them all but that doesn't mean it's easy to do.

If you are looking for "easy" you won't find it in the insurance field.

Yes, thanks for the feedback. Let me clarify:

Smaller Commissions - Smaller face amounts on policies with FE so inherently commissions are smaller. Not that they are from a % standpoint.

Easy - Certainly know selling isn't easy and insurance isn't easy. My question isn't so much what is "easier", as it is what provides a better return for an agent's investment of time, money and effort. Trying to make a business decision where to focus my efforts.

Thanks.

 

[Josh]

Yes, thanks for the feedback. Let me clarify:

Smaller Commissions - Smaller face amounts on policies with FE so inherently commissions are smaller. Not that they are from a % standpoint.

Easy - Certainly know selling isn't easy and insurance isn't easy. My question isn't so much what is "easier", as it is what provides a better return for an agent's investment of time, money and effort. Trying to make a business decision where to focus my efforts.

Thanks.

That's a question many agents ask themselves every day when they wake up in the morning. There is no silver bullet. It varies a great deal by market and ability. The best thing you can do is try some different things and see what works for you in your area or get hooked up with an agency that is looking for help and already has a good system and training program.

 

[0b1kanobee]

I have a limited budget and limited time

By limited time, do you mean you work another job or something or you only have so much time to make this work?

Second, what's your budget? $500, $1000, $5000?

Third, what is your background?

Last, how much money can you afford to lose?

 

[WinoBlues]

Yes, thanks for the feedback. Let me clarify:

Smaller Commissions - Smaller face amounts on policies with FE so inherently commissions are smaller. Not that they are from a % standpoint.

Easy - Certainly know selling isn't easy and insurance isn't easy. My question isn't so much what is "easier", as it is what provides a better return for an agent's investment of time, money and effort. Trying to make a business decision where to focus my efforts.

Thanks.

Today I quoted a $1,000,000.00 term policy at $87. per month I also mailed a $25,000 FE app @ $170. per month.

The term policy, if it goes through, will pay in about 3 months. The FE policy will pay about 3 days after it is received at the company.

 

[jdeasy]

Yes, thanks for the feedback. Let me clarify:

Smaller Commissions - Smaller face amounts on policies with FE so inherently commissions are smaller. Not that they are from a % standpoint.

Easy - Certainly know selling isn't easy and insurance isn't easy. My question isn't so much what is "easier", as it is what provides a better return for an agent's investment of time, money and effort. Trying to make a business decision where to focus my efforts.

Thanks.

OK, what smaller premiums? I was a top 15 agent with NAA doing MP. I average more premium in the FE market than I did in the MP market. And I have a higher commission level.

You are asking questions that have no answer. What's easy for one agent could be very difficult for another.

 

[lsalmans]

I find it much easier to get a senior to commit $40 a month to a FE policy, than it is to get a 25-40 year old to commit the same to a big term policy, or a mid sized whole life policy. Never mind the ease of the app and underwriting.

There is a descent chance you will be in the hole your first 6-8 weeks of working in FE, because in the beginning you have to order your 2nd round of leads and sometimes even your 3rd round, before your first round of commissions come in.

If your budget is limited, get with an organization that will do lead financing or someone who can help minimize your exposure in the beginning. Until you can learn the ropes.