How Could A MLM Company Make Money With Insurance Products?

[sdmillar]

Ob1,

I believe you said that these mlm associates would not be licensed insurance agents correct? Assuming that is the case, how could they be legally compensated for insurance sales? If lets say all the business goes through a licensed agency like yours and you give them a percentage of each sale, that would get your licensed yanked, at least in our state.

Another area of caution that comes to mind would be charge backs.

Good luck, would like to hear if you get it off the ground.

 

[0b1kanobee]

Ob1,

I believe you said that these mlm associates would not be licensed insurance agents correct? Assuming that is the case, how could they be legally compensated for insurance sales?

I don't think I said anything about sales. I believe I was talking about products they buy or products they refer. If you understand MLM you would know that there is no money (real money) in selling anything. Only referring others to use the product and receiving credit for doing so (money) and them doing the same (called the snowball effect or growing phase)......growing you organization. Using products and services and getting others to do the same and teaching them to do the same and those who you taught teach their people to do the same, ect. ect.
I can only do so much production as one person so why would I sell anything. Similar reason why you can't just go buy some Amway soap (some people love the stuff and just want the soap). That however does not fit the business model.

All selling of insurance products would be done by licensed insurance professionals around the country. Also for that matter, I could be earn money for someone buying an auto policy say in California however I'm not licensed in California to sell anything yet it can be done and done so legally from what I have found out so far. Like I said, more than one way to skin a cat.

This company already has people making money off associates selling prescription drugs, yet nobody to my knowledge is a pharmacist a owns a pharmacy. If you had access to prescription drugs for less, could you go out and start selling them legally? Better yet, could you earn money from others doing the same? I don't see how but I can tell you it is happening everyday and it is 100% legal.

 

[sdmillar]

I don't think I said anything about sales. I believe I was talking about products they buy or products they refer. If you understand MLM you would know that there is no money (real money) in selling anything.

OK, so someone is going to be "REFERRED" to buy some insurance product from a licensed agent somewhere. Then the person that did the "referring" makes money off the sale if the person being "referred" buys any insurance? I miss how it is legal for the licensed agent or agency actually selling the insurance product to be able to rebate money back to any non-licensed "referrer" The way I understand it, if my brother, who is not a licensed insurance agent refers a client to me and I pay him a fee or percentage of the sale, that is against the law. Not saying that kind of thing does not go on, but it is against the law, at least in our state.

As far as your analogy about Amway, I happen to live in their hometown and I can tell you that they sell about $1 billion dollars of product each month and if something is not sold, the income streams dry up fast. Other than the most scam filled MLM that are really just pyramid schemes, the companies put the MLM system in place to sell their product, whether it is juice or soap, the end game is to move product.

Only way I see any value for the mlm associate is if they could buy the insurance at a discount for themselves. Once you start the earning money off referrrals that turn into sales approach, I think you cross the line.

 

[bigfrie]

OK, so someone is going to be "REFERRED" to buy some insurance product from a licensed agent somewhere. Then the person that did the "referring" makes money off the sale if the person being "referred" buys any insurance? I miss how it is legal for the licensed agent or agency actually selling the insurance product to be able to rebate money back to any non-licensed "referrer" The way I understand it, if my brother, who is not a licensed insurance agent refers a client to me and I pay him a fee or percentage of the sale, that is against the law. Not saying that kind of thing does not go on, but it is against the law, at least in our state.

As far as your analogy about Amway, I happen to live in their hometown and I can tell you that they sell about $1 billion dollars of product each month and if something is not sold, the income streams dry up fast. Other than the most scam filled MLM that are really just pyramid schemes, the companies put the MLM system in place to sell their product, whether it is juice or soap, the end game is to move product.

Only way I see any value for the mlm associate is if they could buy the insurance at a discount for themselves. Once you start the earning money off referrrals that turn into sales approach, I think you cross the line.

I agree, for someone to make money off an insurance purchase that person has to be licensed.

 

[sdmillar]

Ob,
You got an update for us on the MLM insurance project?

 

[0b1kanobee]

Ob,
You got an update for us on the MLM insurance project?

It is slow moving and right now that is fine with me. The biggest problem I am having is talking to the right person who can make the money part work so people can get paid. It is taking me a while to narrow that person/s down. My first couple of attempts, I had to talk with silly company reps who facilitate this kinda stuff and they had no idea what an MLM was or a network marketing company. They hadn't even heard of Amway.

I'm having to be very careful because I don't want another MLM doing what I think has good potential. A lot of work left but it could pay off big. We'll see.

 

[myinsurebiz]

LOL

There is a lot of mis-information in this thread about MLM's - don't even know where to start. Well - guess I won't.

However - no way to flow "real" insurance commissions thru a MLM comp plan. Anyone sharing the money must have a license.

You could market discount or association group indemnity type products without a license.

MLM isn't bad - just some of the people / companies in it.

 

[Shalom]

Good MLM's have changed a lot and are now about product not pyramids. This is where you are going to run into problems. If the product is not good you will not have people join unless you are doing high pressure sales.

 

[Guest]

This can be done through several associations. However, before proceeding he should consult his tax advisor to see they would qualify IRS section 162 Bonus or Double. There is another way but let me know the answer on this way first.

 

[Rbrown]

I have thought for years that using mlm to raise money to form an account that could only be used for paying deductibles, premiums, co-pays etc. would be a good idea. I would love to participate in such a program if it were available. Having been involved in several different mlm programs I have learned what works and what doesn't work in recruiting members, so I do have some ideas for that if anyone is interested.
I would love to work along side of a company that could promote this concept but I'm not smart enough to develope this myself. I, again, would Love to have this available so that I could participate in such a program as these cost have become unaffordable for me and others I'm sure.
Feed back please...