New Agent needs Contract Question Answered

[ccage]

I am a newly Licences Life Agent. I know quite a few agents that I am friends with but I can't seem to get this question answered clearly without one saying "sign up with us and I will teach you everything."

I have a Question about Contracting with a firm. So I my basic understanding is you are an Independent Contractor and become contracted with a carrier.

What is Captive vs. Non- Captive. I know an agent who basically told me he is Captive for Final Exspense through one carrier but said if he wanted to sell a product like mortgage protection through another or multiple ones.

What is an MGA, IMO and how do you become one. Does everyone start out as an agent then work up, or can you just walk in and become one. I ask an agent how do you become an MGA, and his response was like it was this amazing almost un-attainible feat like becoming a Black Belt in Karate. Another Told me that he became an MGA when he walked in but it was because he was a recruiter and had lead generation experience in his previous carreer.

Insurance seems almost like the same model as Real Estate, You have a Broker who has Agents under him, then when you qualify to be one you can become a Broker so you can have agents under you, or you can go off on your own and form your own firm.

Any help with this would be great

 

[DHK]

What is Captive vs. Non- Captive. I know an agent who basically told me he is Captive for Final Exspense through one carrier but said if he wanted to sell a product like mortgage protection through another or multiple ones.

I'll help you understand this through the eyes of traditional life insurance companies.

New York Life and Northwestern Mutual life are captive companies. You (generally) cannot sell their products unless you are contracted through them. When you leave, your clients belong to them. You may be able to sell other companies, but usually after a "first right of refusal" by your captive company.

MassMutual and Guardian Life are "semi-captive". You have a contract to fulfill, but you can also sell for other companies. When you leave, you can still service your fixed insurance business that you sold - subject to GA approval and a non-solicit/no-replacement clause for 2 years (pretty standard).

Essentially, it all depends on your contract language.

 

[10X]

Really read the fine print on anything you sign. Many of the MLM type agencies (they encourage you to build a team, or your upline is hiring a team) will say just about anything to get people to come on board...even saying you can contract with other carriers. This is often not the case as they will want all business to be run through them...especially if they are providing/selling leads to you because they don't want any of their leads getting written or placed elsewhere.

 

[ccage]

So Basically it is all a business like everything else.

 

[rousemark]

So Basically it is all a business like everything else.

Yes.. Treat it any differently and you will not last.

 

[ccage]

Gotcha, they just want you to sign up so they have as many agents under them as possible. Thats why whenever you meet an MGA, or even a GA, and you may be selling a low-ticket product, he (or she) tries to recruit you with the whole "you could be making so much more selling with me." because they figure you are in the sales industry so you know a little more about what goes on then the college grad and has more of a shot of making it. It's all commission so they if you don't make it they just concentrate on the ones that do.

So that is why people fail because that get "Niave" about it and think they are getting "Screwed" over but nobody is actually getting screwed they just don't realizes it's a business.

 

[10X]

Gotcha, they just want you to sign up so they have as many agents under them as possible. Thats why whenever you meet an MGA, or even a GA, and you may be selling a low-ticket product, he (or she) tries to recruit you with the whole "you could be making so much more selling with me." because they figure you are in the sales industry so you know a little more about what goes on then the college grad and has more of a shot of making it. It's all commission so they if you don't make it they just concentrate on the ones that do.

So that is why people fail because that get "Niave" about it and think they are getting "Screwed" over but nobody is actually getting screwed they just don't realizes it's a business.

That Multi-Level Marketing 101. Get hired on with little to no experience (often starting at 50-60% commission), hire someone under you with little to no experience (often starting at 50-60% commission), and then teach them to sell (because you have so much knowledge being so new)...and then keep doing that some more.

MLM will tell you to "follow the system," and everything will work out. MLM will focus on apps submitted and APV products, not actual business placed and policy persistency. If they sell leads, they are in the lead selling business first, and revenue production second.

Chargebacks are routine (and you will be responsible for the chargebacks of all agents underneath you if they leave) given that you will likely be encouraged to take a 75% advance on commission and encouraged to sell expensive Table 4 products most of the time.

It works for some people...but they are often the mythical unicorns in this business.