How to calculate Commissions??

[StarterAgentKG]

Target / Base is what we blow the chit out of with Drones . . .

Overfunding is what Trump wants to do with the Wall . . .

sweet

 

[ATM]

Life insurance companies allocate the first two years of premiums to total cost of selling the product. So 200% is the total they have to work with not 100%.

There are other costs besides commissions. But commissions is the majority of it.

Don't believe this. I know of no insurance company that allocates 200% of premium to distribution costs and if they do their products are so expensive as to be completely noncompetitive - so maybe NML does but no one else.

The most I know of currently is around 140% with most in the 130% range. That means the average paid on a product not what one IMO or agent may earn because some can be paid more and some less.

From the company perspective it doesn't matter what an individual makes but in total what all make as an average. (and I am talking about upfront comp, not the comp paid over the products lifetime)

 

[Newby]

Don't believe this. I know of no insurance company that allocates 200% of premium to distribution costs and if they do their products are so expensive as to be completely noncompetitive - so maybe NML does but no one else.

The most I know of currently is around 140% with most in the 130% range. That means the average paid on a product not what one IMO or agent may earn because some can be paid more and some less.

From the company perspective it doesn't matter what an individual makes but in total what all make as an average. (and I am talking about upfront comp, not the comp paid over the products lifetime)

You are confusing the commission levels with the total sales cost of the product.

All insurance companies pretty much figure the first two years of premiums (200% of the annual premium) is the cost of getting the product sold.

That doesn’t mean that 200% goes to commissions.

But commissions do go above 140% at the top levels. That’s not unusual at all.

 

[ATM]

You will have to define what you define as sales costs then. Are you including home office marketing, product design and overhead? Or are we talking about 'sales costs' which are distribution costs.

If it is distribution then it is not at all typical for them to be 200%. Maybe in 1975 but not any longer. 140% is much closer +/- a little bit.

Throw in all the other things and that is still probably not 200% but will vary widely by carrier.

(I've been involved with product design and worked directly with actuaries. I think we are maybe playing a semantics game. Sales costs and marketing are not the same thing.)

 

[Newby]

You will have to define what you define as sales costs then. Are you including home office marketing, product design and overhead? Or are we talking about 'sales costs' which are distribution costs.

If it is distribution then it is not at all typical for them to be 200%. Maybe in 1975 but not any longer. 140% is much closer +/- a little bit.

Throw in all the other things and that is still probably not 200% but will vary widely by carrier.

(I've been involved with product design and worked directly with actuaries. I think we are maybe playing a semantics game. Sales costs and marketing are not the same thing.)

Everything the company does to get the product sold. Everything.

140% is definitely not the total sales cost. That’s not even the total commission with most companies.

 

[ATM]

Everything the company does to get the product sold. Everything.

140% is definitely not the total sales cost. That’s not even the total commission with most companies.

"not even the total commissions with most companies"

Care to name them with percentages? I would be very interested.

 

[Newby]

"not even the total commissions with most companies"

Care to name them with percentages? I would be very interested.

You can call me. But the insurance companies frown on talking the top levels on forums. But call me anytime at 270-823-2413