How Long Does It Take to Truly Make a Profit at FE?

[Tom Highway]

I've been doing Final Expense with Equita for about three months, but the first month I didn't have any legitimate leads. Once the leads have started rolling in, I've had some decent success, my best week was somewhere around $4500 in annual premium written. Of course, not all of this was issued, and some of it was monthly pay by check, so it's not annualized commission.

Up to this point, I'm pretty much at the breakeven point, I haven't made much of a profit, and I'm wondering how typical this is.

How long does it take to truly make a profit in Final Expense?

Also, is all the annualized commission based on a 9 month annualization?

 

[Tom Highway]

The $4500 week was a very good week. But, now I know that I can write that much premium in a week - I have it in me. I average less than that, though, but I'm working on it.

I do not know what your average week is but 4500 is very good some of the better agents do that. If you are on a 100% contract and 9 months advance you should be doing fine even with lead cost which should not be over about 500 or so a week maybe a little more if in a bad area. And yes most advances are 9 months.


Jim Sowder
Family 1st Insurance Brokerage
304-640-8914
[email protected]

 

[Daytona_Guy]

The challenge you have with organizations like that is that there are guys producing $20,000+ per month that are struggling still because of low commissions (80%, 90%) with full lead costs. The commissions are only increased there after 3 months of consistent high production.

If you were to start out at 110%, for instance, you'd have a much faster return on your lead investment and greater return on investment right out of the chute. Oh, and the renewals (big factor) are MUCH greater when you're on a good contract! This means that next year you have NO LEAD COST because your leads are paid for by the residuals from last year!

CW

I've been doing Final Expense with Equita for about three months, but the first month I didn't have any legitimate leads. Once the leads have started rolling in, I've had some decent success, my best week was somewhere around $4500 in annual premium written.
How long does it take to truly make a profit in Final Expense?

 

[jdeasy]

The challenge you have with organizations like that is that there are guys producing $20,000+ per month that are struggling still because of low commissions (80%, 90%) with full lead costs. The commissions are only increased there after 3 months of consistent high production.

If you were to start out at 110%, for instance, you'd have a much faster return on your lead investment and greater return on investment right out of the chute. Oh, and the renewals (big factor) are MUCH greater when you're on a good contract! This means that next year you have NO LEAD COST because your leads are paid for by the residuals from last year!

CW

Those numbers don't compute even if the sceniaro was correct.

If a guy is doing $20,000/mo ap and just say he loses 20% of that, {which he won't in FE}, he then has $16,000 issued paid. On an 80% contract, he got paid $12,800. or on a 75% advance, $9600. Even if he paid full price for leads, that would cost him about $1500. He now has $8100 in his pocket with his leads paid for and 25% more commissions to come.


If that's "struggling", I'm sure many would like to struggle. Of course, I can't imagine anyone that's producing $20,000/mo and on only an 80% contract or paying full price for leads.

I've not done $20,000 in a month with them and I don't pay full price for leads and my contract is is quite a bit higher than 80%.

 

[Daytona_Guy]

If a guy is doing $20,000/mo ap and just say he loses 20% of that, {which he won't in FE}, he then has $16,000 issued paid. On an 80% contract, he got paid $12,800. or on a 75% advance, $9600. Even if he paid full price for leads, that would cost him about $1500. He now has $8100 in his pocket with his leads paid for and 25% more commissions to come.

That assumption is if he only had 60 leads for the month! ($1,500 you showed). His actual lead cost was $25 per lead to start. He also is paying an appointment setter $15 for each appointment because he's working 12 hours a day in the field, 5 days a week to generate that result. (This is from a friend in this very scenario.)

At a 1.5% response mailing on his own, that's about $25 a lead and he should have a 40% higher contract. That's the point.

 

[jdeasy]

That assumption is if he only had 60 leads for the month! ($1,500 you showed). His actual lead cost was $25 per lead to start. He also is paying an appointment setter $15 for each appointment because he's working 12 hours a day in the field, 5 days a week to generate that result. (This is from a friend in this very scenario.)

At a 1.5% response mailing on his own, that's about $25 a lead and he should have a 40% higher contract. That's the point.

Everything "should" be better I suppose, but, I'm not trying to sell the guy anything or get in into my marketing team or anything like that, so, I can just give real numbers. I did say he could lose 20% and that's really on the high side for FE.

I only get 15 leads per week. I know others that do more production than I do and only get 15 leads per week. A new person with EFES pays $24 per lead now. I don't know what commission a nw guy gets since I don't recruit. The lowest I've had anyone tell me about with EFES is 80%. I don't at what level you move into higher contracts. Mine is the same as I started with. I have my cost lead down to $9 now. I still only get 15 leads per week and some weeks, not even that many.

There may very well be better deals out there for FE agents than EFES. But, most agents would love to "struggle" in the example you gave. Still, in that same example. if the guy was paying another $15 per lead to an appointment setter as you said, he would be out another $900. Still leaving him $7200.mo after lead costs to struggle thru for 9 months until he starts getting the back end 25%.

I have stuggled before in the insurance business. Having $7,000+ per month in my pocket would never have qualified for one of those struggling times.

I do know a guy that is struggling mightly with EFES. He has written only about 3 or 4 policies on 60 leads. That is struggling. A guy writing $20,000 ap per month is not. Unless he was a millionaire to start?
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I agree guys will do a lot better in the end getting their own leads and better contract. Also you know the leads are fresh and new when you do the mailings yourself.

Jim Sowder
Family 1st Insurance Brokerage
304-640-8914
[EMAIL="[email protected]"][email protected][/EMAIL]

I do not agree with that. I've done my own mailings in the past and it was never as successful as when I bought leads. And, that is with any lead company I've dealt with. I've done well with NAA leads, with LH leads, with internet leads and with EFES leads. I never even got my money back on mailers I did myself. I know many, many agents with that same story. In fact, the only agents I've ever run across that are doing well with their own mail are agency managers or agents that have been established for many years. I'm sure there are some doing well that I haven't met. But, I know dozens of agents that went broke and that are no longer in the business because they had no one to market to.

 

[Daytona_Guy]

I do not agree with that. I've done my own mailings in the past and it was never as successful as when I bought leads. And, that is with any lead company I've dealt with. I've done well with NAA leads, with LH leads, with internet leads and with EFES leads..

I think some folks are just cut out to be working for the man, and others want to work for themselves. Either way you look at it, $20,000AP a month is either $16,000 commission before leads (at 80%) or $24,000 with a good contract. That's a mighty big difference. Nothing ventured, nothing gained.

 

[jdeasy]

I think some folks are just cut out to be working for the man, and others want to work for themselves. Either way you look at it, $20,000AP a month is either $16,000 commission before leads (at 80%) or $24,000 with a good contract. That's a mighty big difference. Nothing ventured, nothing gained.

If you knew me, you would never say that I'm someone that is cut out to be wotking for the man.

My point in this discussion is not that $24,000 is not better than $16,000, even Stevie Wonder can see that $24,000 is better. The point is, without the leads, he wouldn't have done the $20,000. 120% of nothing equals the same thing as 80% of nothing.

Of course if a person could get in front of the same people, a higher contract would be better. But, if you can't get in front of people, what difference does it make what your contract is?
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JD,

Maybe I was not clear I meant doing your own orders not trying to do all the other BS. yourself. I think the guy I was replying to meant that as well. For example I have contracts at mail houses that allow people contracted though us to send 1000 mailers at $335. I offer higher contracts than Effs so I think in the end it works much much better.

Jim Sowder
Family 1st Insurance Brokerage
304-640-8914
[EMAIL="[email protected]"][email protected][/EMAIL]

I have a 115% contract with Chesapeake. I have 105%, or maybe 110%, with Forethought. Those are my highest two contracts. I don't have leads with either of those companies or the FMO's for them. I had to do my own mailers for them. I was paying about $350/1000 for my mailers. The best return I ever got was 1%, most were well less than that. Needless to say, I have very few Cheasapeake and Forethought policies on the books.

My contracts with EFES are all 95% or 105%. I now pay $9 per lead.

One doesn't need to be much of a mathmatician to figure the better deal.

 

[jdeasy]

JD,

I would suggest you talk to someone that does a lot of ordering maybe your IMO because you can do a lot better than what you did though a mail house. You do know Efes uses direct mail also sometimes. In the end you are just paying for someone to place the order for you. Even though I still fill you are leaving money on the table you have a much much better deal than some I have talked to.

Jim Sowder
Family 1st Insurance Brokerage
304-640-8914
[EMAIL="[email protected]"][email protected][/EMAIL]

I only use EFES direct mail. I don't take any dialer leads. Even if I was able to get a 1.5% return on mailers, which is high, that would make the leads cost me about $23/each. I now pay $9 and get a designated amount per week. The other thing is, I'm satisfied with how everything works. I wasn't when I was doing it all myself. How much value is there in satisfaction?

 

[JustinUpright]

Leads make or break you. Dialer and Mailer leads breaked me ! But then, I got this hairbrained idea of creating my own leads by phone and setting pre-set appointments for FE.
I actually got to get in some doors for a change, and made 2 sales in the first 5 leads! Because they are fresh and hot, and I use my own script, (similiar to this, but not exactly...have to keep some trade secrets), I now have the upper hand!

Hello Laura,

My name is______ and I'm with______burial insurance. Did you know that the alarming rise in funeral costs have reached as high as $15,000?
All this week we are delivering brochures and giving quotes to folks in ____________(town).
Which day would be best for you, we can stop by either morning or afternoon?
etc.,etc, etc.


My other script, which is much better than the above can generate more leads than I need..I could offer a couple of guys 15 pre-set, partially qualified, fresh appointments a week. PM if interested.

Its the only way to fly for me now. $$$$$$

Are you using a list? How are you getting your leads for the calls?