For New Final Expense Agents: 4 Final Expense Contract Scams To Avoid

[Rearden]

While I agree, keep in mind the context.

New agents know nothing.

I can't tell you how many new agents were shocked that they could get commissions over 100%. Some doubt it's even possible.

I guess my point is this: if you want a long-term business relationship with a successful producer, putting it all out on the table - the good, bad, and ugly - will yield far better results than not.

There is a very easy trick to avoid being cheated or scammed... Stop being so greedy and dishonest.

I once heard it said, cons and scams take advantage of people's greed and dishonesty. They think they are going to get one over or someone, all the while the con artist is playing them and leading them into the trap.

Nigeria Prince is going to send you a million dollars for safe keeping outside the country? Yeah right, greedy SOB thinking you're going to rip him off and keep the money.

You won the lottery you never even entered? Yep, you know you didn't even enter, stop thinking you're going to take advantage of them instead

Free leads, high comp and no downside? Yeah, right. No one is that stupid, there is a catch in there somewhere.

 

[HoosierLife]

There is a very easy trick to avoid being cheated or scammed... Stop being so greedy and dishonest.

Free leads, high comp and no downside? Yeah, right. No one is that stupid, there is a catch in there somewhere.

While I agree with you. The problem is that most new agents don't really have a clue how the system works.

I didn't know what vesting even meant before I got into insurance. A release? Who would ever think to ask about something that isn't on any contract??

And let's be honest, until you've been screwed a few times in life, you might not even read the contracts your are signing. The recruiter sounds so trusting.

Take our prospects, or even normal life insurance prospects ever read their application or policy in its entirety.

Now at the end of the day, it's the agents fault for not doing their due diligence. Hence threads like this to warn unsuspecting Agents.

 

[Thedude]

Not to mention the immediate risk of providing leads with some possibility of zero return.

Give someone 120 percent contract day 1...what are you down?

Give someone 50 percent + leads day 1...you are down lead cost

 

[DHK]

The higher comp you pay an agent the more chargeback risk there is. Instead of their 50% FYC getting rolled up... it would be 120% FYC. So in reality their model is even more risky!

I don't recruit agents... but that is as faulty of a premise as I've ever read.

Assuming a TOTAL payout of 120% (it's probably more, but what do I know?)... wouldn't the agent's 50% + 70% to the "sponsoring" organization/agency also be charged back?

The risk of charge back is the same regardless of agent commission schedule.

If you want to control charge back risk, don't do advance commissions.

 

[Thedude]

I don't recruit agents... but that is as faulty of a premise as I've ever read.

Assuming a TOTAL payout of 120% (it's probably more, but what do I know?)... wouldn't the agent's 50% + 70% to the "sponsoring" organization/agency also be charged back?

The risk of charge back is the same regardless of agent commission schedule.

If you want to control charge back risk, don't do advance commissions.

Yea I don't think he has been in this business long lol or at least hiring people

 

[rousemark]

While I agree, keep in mind the context.

New agents know nothing.

I can't tell you how many new agents were shocked that they could get commissions over 100%. Some doubt it's even possible.

I guess my point is this: if you want a long-term business relationship with a successful producer, putting it all out on the table - the good, bad, and ugly - will yield far better results than not.

I am still shocked that we can gt over 100% commission...

 

[Rearden]

Agencies mitigate chargeback risk with higher override spreads.

While the risk is the same, you can "socialize the risk of loss" with increased override spreads across the board.

 

[Thedude]

I am still shocked that we can gt over 100% commission...

Yea it is. Where does the money come from!?

 

[VolAgent]

I don't recruit agents... but that is as faulty of a premise as I've ever read.

Assuming a TOTAL payout of 120% (it's probably more, but what do I know?)... wouldn't the agent's 50% + 70% to the "sponsoring" organization/agency also be charged back?

The risk of charge back is the same regardless of agent commission schedule.

If you want to control charge back risk, don't do advance commissions.

You're not thinking it through. And Tom needs to be clearer, he is referring to debt roll up. Chargeback risk is the same either way, but once it turns to debt roll up then the higher comp is definitely risker to the agency.

If the total payout is 120% and 50% went to the agent and 70% went to the agency, the agency is only out 50%. After all, they are simply returning the 70%, they only have to come up with the 50% the agent received. So the higher the comp to the agent, the more risk if there is a debt roll up.

 

[Thedude]

If they have enough agents yes.


They are paying back the chargeback as an agency as well