Interest on Advances
- Thread starter usakr
- Start date
- 19,658
I've been contracted with about 20 FE companies over the years and I've never run acroos even one that charged interest on advances.
I'm paid as earned now on all my contracts except one and I get a 6 month advance with them. They don't charge me interest on that advance.
- 102
I plan on switching to as earned asap! I guess you can say I fear 'Chargeback Hell' (not that I think my sales are weak, I just dont want to experience chargeback hell) and after being on as earned after a few months of sales would be sweet! I guess you could say its a goal of mine! oh about the topic of this thread...sorry im too much of a newb to be able to answer that... 
- 5,058
I don't understand this mantra about going "as earned" asap.
I do understand though about interest and debit balances.
However, with my individual health carriers I have 4 that advance me 8 to 12 months & no interest.
My as earned carriers... Aetna and Cigna, has been where I get the most aggravation in regards to compensation. They are a royal PITA. Acting like they are doing me a favor by paying me, when they feel like it.
I do understand though about interest and debit balances.
However, with my individual health carriers I have 4 that advance me 8 to 12 months & no interest.
My as earned carriers... Aetna and Cigna, has been where I get the most aggravation in regards to compensation. They are a royal PITA. Acting like they are doing me a favor by paying me, when they feel like it.
While most agents "think" that most carriers don't charge "interest" on advances they do two things that leads to this often misconception:
1. Fail to read the entire contract. If you read the entire contract you will likely find a "fee" agains advance balances. It is not called interest under certain DOI guidlines, but it has the same or simular result.
2. An agent that fails excercise #1 still fails to examine his/her commissions report. If you really look for it you will most likely see a charge against your final commissionss payout.
In addition... most agents fail to document all interest or fees as a business expense when doing their taxes. You won't get a report on YTD fees/interst so keeping each and every report that shows it is important. It can be substantial.
1. Fail to read the entire contract. If you read the entire contract you will likely find a "fee" agains advance balances. It is not called interest under certain DOI guidlines, but it has the same or simular result.
2. An agent that fails excercise #1 still fails to examine his/her commissions report. If you really look for it you will most likely see a charge against your final commissionss payout.
In addition... most agents fail to document all interest or fees as a business expense when doing their taxes. You won't get a report on YTD fees/interst so keeping each and every report that shows it is important. It can be substantial.
- 19,658
I've never had interest charged or a fee on any advances with any life company. I have had interest and fees charged on advances with med sup companies. I'm as earned on all my med sup contracts now.
If you have had experience with life companies charging interest or fees on advances, could you share which companies did that?
It has been a while, but seems like Chesapeake was one. It has been a while for me too. I am as earned on everything and have been for several years, but I remember seeing it in contracts, but you are right about it being more an issue with health related companies/products.
Foresters Life does not charge anything for advancing and I know of a ton more of them.
- 8,707
I remember selling Great American Products on an advance and they charged a 12% interest rate on outstanding balances, Which I knew about going in so I didn't have a problem and didn't sell much of their product anyway (403b market) then the new products used Annuity Investors instead of Great American and I sold 1 policy the advance amount was $49.89 .11 shy of the $50 minimum for payout once again I didn't care too much until a month later and I looked at a new statement they charged me interest on the advance even though they had held unto my money!!! Always read your commission statements I know if you have a lot of companies it can be a lot to look at but these companies will take your money if your not careful.
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