Life vs P&C

Jun 13, 2008

  1. MaggieMae
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    MaggieMae New Member

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    First time post, I have been reading for the last 4-5 months, a lot of good information. I have just started studying to take my state, KY, licenses, got in the mail today. The question that i have is to focus on Life or P&C, I have two local independents that have both said they would work with me. My only thing is I don't know which way to go, with P & C it seems as if it would be better long term with renewals vs. Life, but it seems as if there is benefits of both. Please help, if you want background i can give but hours and funny schedules don't affect me.
     
  2. JRoot
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    JRoot Guru

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    There are residuals in health, permanent life, disability, long term care, med supps and some other life products. It's not just P/C that has residuals.

    With P/C, rates change all the time so you're fighting every year for your renewals. It's not automatic. There is also a lot more servicing with P/C...

    Life/health is a much harder sale, but for me it's more meaningful and that's why I chose it for my career. No one here will be able to tell you what you should/shouldn't do... It's a matter of preference.

    I think you'll get more information by asking specific questions...
     
    JRoot, Jun 14, 2008
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  3. Guest
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    "I have two local independents that have both said they would work with me."

    Will you be working with these independents, or do you mean that they will be helping you?
     
    Guest, Jun 14, 2008
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  4. Soaringagent
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    Soaringagent Guru

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    I prefer P&C and health... but each person has their own preferences.
     
  5. MaggieMae
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    MaggieMae New Member

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    Thanks for the quick responses.
    JRoot, I didn't realize there where renewals with life products you mentioned, that gives me something to ask more questions on. Do you find your business is tied to the overall economy more than P&C would be it seems(due to gov't-bank requirements), or is your target market less affected?

    DJAdams- I would be working for them, because they would be keeping around 1/2 the commission.

    Soaringagent: Why do you prefer P&C vs life? Jroot said that he likes Life because of meaningfull?

    In the last 8 years i have had two jobs. One I owned a business the other sold new homes. Based upon these two jobs the thing that I believe I value and miss the most is repeat and referals, it gave me as much if not more of a sense of pride than does the big checks. Yea with family obligations I need an income, but if the above two happen it seems the pay will follow.


    Thanks in advance,
     
  6. Alston
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    Alston Guru

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    My son just started in the business this year. Our strategy is for him to focus on policies that pay heavy renewals until he has built up enough renewals to give him a steady income that pays his bills. For us that means health and Medicare plans. After his income reaches a certain point, we may experiment with life, DI and annuities. My son is getting most of his current salary from my renewals and is able to build his book without the kind of urgency that I had when I started out so his situation is different from most newbies. (Fortunately he is pretty motivated. He has about 50% of the year's sales goal done and he started in February.)

    There are renewals with most products but life tends to to pay much smaller renewals when compared to P&C and health. Life has a potential to pay a very high commission for a single sale which individual health and individual P&C do not. All things being equal, I would give you the same advice I gave my son.

    However, here are some reasons you may want to sell life: Your sales skills and personality are more compatible with life sales. The training available to you for life is better than the training available for P&C.

    Good luck to you,
     
    Alston, Jun 14, 2008
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  7. MaggieMae
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    MaggieMae New Member

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    Alston, that makes sense, that is kinda what I have been reading and hearing. Congrats to your son for picking up quickly, if you don't mind what did he do before working with you? I think the training will be about the same in their respected fields, so the renewals is what is really sticking out so far. I am fortunate not to need alot of immediate cash, all my spreadsheets have been comparing years two on, Life seems to spike early then P&C balancing out the larger commissions upfront of life with renewals in years 3 on. Does this seem like a fair thought?

    Thanks again.
     
  8. Alston
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    Alston Guru

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    My son is 23. He was working as my assistant before he started working as an agent. Before that he worked as a courier.

    Depending on your production, you could make more with P&C right from the beginning. Life has the potential to be more lucrative upfront, but may be easier to sell a higher volume with P&C.

    I haven't sold P&C in over a decade now. I may not be the right person to confirm the data on your spreadsheet.

    I sell health primarily for two reasons. The first is that my personality makes it easier for me to sell health insurance. My approach is to come across like a CPA giving advice. I'm not nearly as good at looking for or creating emotional reasons to buy. If you are better at the latter, you may be short-changing yourself if you don't try selling life insurance at some point. The second reason I sell health is the renewals.
     
    Alston, Jun 14, 2008
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  9. MichaelJM
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    MichaelJM Expert

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    heh, if you are new to the business you should probably stick to life. P&C is great and all, but the challenges you will face will include massive amounts of customer service and a ton of classroom study to beat out the learning curve you will have with it. Personal lines are an easy start though, but it takes a lot to make a little. Commercial is where us big boys like to play, and unless you know your shtick you will get out bid every time. P&C / Life residuals hmmm.. depends on the company you are appointed with, but I agree P&C *can* be more lucrative on the residual end provided you do not have a massive loss ratio on a commercial client. Be a student of your industry, and you will go far. I dove in head first 3 years ago into P&C. For the first year I was swimming in research overload, but now I am realizing the benefit of 4 million dollar premiums on CL and CP coverages. My agency is appointed with over 140 P&C Companies so beating anyone isn't a problem. Remember if you just want to focus on personal lines then go with some captive agency like allstate/state farm/nationwide or whatever. However, you will never roll with the big premiums using those companies as they are not geared well to the commercial market at all.
    Also, after 3 years in P&C I would still profess that I am not an expert in P&C. I have my CIC CISR and I am working on a few more. Just remember be a student of your industry! The more you know the stronger your client retention and gain will be
     
  10. MaggieMae
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    MaggieMae New Member

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    MichaelJM,
    If I go the P&C way I was thinking in two to three years start making the transition to either commercial or into equine. I don't know about either one enough yet to make an educated decision.
     
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