Getting into P&C at 50

[BoomBoom68]

I have my life license and approached a small P&C agency to see how about cross-selling their P&C book for life insurance ...He talked me into studying for my P&C exam… Average commissions he says are 10 to 18 percent and I would get a 50-50 split… he has a book of about 4,000 clients ... I have a couple questions… Is this a fair deal and is 50yo too late to start building a P&C book?

 

[BoomBoom68]

Anyone?

 

[adjusterjack]

Realistically, average commissions are 10 to 15 percent. A 50/50 split is generous because, unlike life and health, it's the same for renewals. Even better if he pays you the 50% for servicing his 4000 clients in addition to any new business you bring in.

Will you be an employee or independent contractor? If an employee you'll be covered by his E&O. If an independent contractor you'll need your own E&O to cover P&C.

Whether age 50 is too late to get into P&C is something only you can answer depending on all the financial variables of your life.

 

[CALTCAgent]

Whether age 50 is too late to get into P&C is something only you can answer depending on all the financial variables of your life.

The financial variables in his life should not make this decision alone. The financial variables of the P & C business are what he is trying to find out I believe.

 

[BoatNFun]

I wouldn't think 50 is too late to get into P&C business, especially if your partnering up with another agent!

 

[LostDollar]

I have my life license and approached a small P&C agency to see how about cross-selling their P&C book for life insurance ...He talked me into studying for my P&C exam… Average commissions he says are 10 to 18 percent and I would get a 50-50 split… he has a book of about 4,000 clients ... I have a couple questions… Is this a fair deal and is 50yo too late to start building a P&C book?

Rudyard Kipling:

I KEEP six honest serving-men

(They taught me all I knew);
Their names are What and Why and When

And How and Where and Who.

I cannot respond to the insurance specifics of your question, but you are asking something that goes beyond just insurance.

You are asking about WHEN you can start a change. If you just draw a line in the sand and write the number 50, there is no problem with the number 50. However you should put a couple of other numbers with that. WHEN do you want to stop selling insurance and WHEN do you want to stop working? What may work ok if you start at 50 and work to a now standard retirement of 70, may not work well if you want to retire at 62 or want to switch to doing something like running car wash franchises or doing mission trips at 60. Or if health issues present themselves.

Consider WHAT this will require of you. Consider things such as mental effort, emotional effort, physical effort, financial effort, technological effort and family relationships.Will the P&C products place demands upon you beyond what the Life products do, and will you be able to cope with it?

Re Fairness: If you wanted to involve another person in a Life business which you owned, HOW would you do it, WHERE would you find someone and WHO would you choose? HOW do those thoughts match with what you are experiencing on the receiving end now?

WHY is this person extending this offer to you? I am a naive and gullible person, so I cannot tell you how to consider this question wisely, but it is important that you do so. Over a period of 12 months there have been a number of threads pop up by insurance agents who are in a disastrous partnership relationship with another agent. Trust and respect were violated, contract provisions were ignored, or an agent with experience and market position just flat took advantage of another agent's need.

Even beyond the fairness issue, you still have the question of the succession victim. If you are the succession victim for agent A and your business affairs are entangled with his; if it becomes necessary for you to find your own succession victim before A is out of the picture, you may be unable to do so because the business will be unable, financially and/or legally, to support a third person. This might not be a big concern if you were starting at age 30, but I think it is something that could be a concern for starting the relationship at age 50.

 

[BoomBoom68]

Thank you for your replies. I guess I’m trying to figure out if one can actually live off p&c income in years 1 and 2 without going broke lol ... He said I’d be 1099, but under his e&o ... I’m able to basically work his book to federate new business ... my first thought is to call his hoi clients who don’t have auto with him yet and Busa versa as a foot in the door ... then once they are home and auto clients work them for life and annuities

 

[BoomBoom68]

Also, I’m hearing there is a lot of “servicing” to be done with p&c clients ... Can you elaborate?

 

[Jazz10]

Sounds like a great deal to me. Why would you only need to live off P&C business if you will still be writing life business?
Will you own the P&C business you bring in? How old is the owner of the agency? Would he be willing to sell you the business if and when he retires?
At a 50/50 split he is basically making you a partner without any risk from you.
I would get the agreement in writing though.

 

[LostDollar]

It has not been clarified as to whether or not the agency owner will also be getting a 50/50 split of the new life business. Or how much customer service (vs selling) the "new associate" will be expected to provide. I can see a potential for a great deal for the agency owner and maybe not so much for the op.