New to insurance industry - need help with questions on getting started

[Newby]

An indexed annuity is just a version of a fixed annuity. The actual name is Fixed-Indexed Annuities. They are never invested in the market. They simply pay interest based upon a factor of what their index has done. So yes just a life license is all that is needed. Also check with each annuity company there will likely be some product specific training that they require before you sell your first one.

 

[Tahoe Ray]

How did you decide to do that vs. both individually licensing in each state (and not the business entity)? Are there tax implications or liability issues to consider?

The business entity is licensed. It needs a sublicensee, an actual person attached to the license. One of those people has to have an individual license in the state that you're licensing the business in.

Your liability is your own, but theoretically, you can be sued for anything. So in a fun state like NY where a consumer can sue the agent, the entire upline, and the carrier, there is some risk. That's why you have E&O (although it won't pay for things like you committing fraud...).

Never had a tax ramification. The business pays its expenses/taxes. The rest is distributed according to ownership. You pay your personal taxes on that.

Have your accountant and attorney advise you on your setup.

 

[Jhaaz]

I thought I had this figured out already, but after reading this thread I feel as if someone cast a confusion spell on me. So... in nutshell, you need a LLC(or w/e business type) license for each state as well as your personal license for each state? Or could I just use my own name each buy E+0 and general business liability policies. I usually get LLCs for my businesses but dunno about this business.

 

[Tahoe Ray]

I thought I had this figured out already, but after reading this thread I feel as if someone cast a confusion spell on me. So... in nutshell, you need a LLC(or w/e business type) license for each state as well as your personal license for each state? Or could I just use my own name each buy E+0 and general business liability policies. I usually get LLCs for my businesses but dunno about this business.

It is confusing as hell so not weird.

Here is how it goes.

You're Joe insurance agent. Things have been good so starting an LLC makes sense. Maybe you have a business partner, Jane.

You decide to license your corp and have everything paid to that corp.

Someone needs to be a sub-licensee of that entity. You or your partner. One of you needs to have a license in each state in which your entity is licensed (because most carriers will need your entity to be licensed before paying direct commissions).

So the entity (your company) needs to be licensed as does an actual person associated with your company. If you are licensed in multiple states, you normally just need one "sub-licensee" to be appointed as non-res in that state.

This stuff mainly matters with partnerships and if you're making enough money for it to matter (if personal, you're maxing out on FICA essentially).

It more than doubles your licensing fees and includes state by state business licensing (required by some, not by others) but if your business is growing to other states, it can be worthwhile.

Let me know if you have any questions. I have done so many iterations of my business that I know a lot of what not to do lol.

 

[Deborah Armstrong]

Thanks, Todd. Do you know if we could do one individual per state (either my partner or I) and the business? Or would we both need to be licensed and the business? Or, a third option, could we just do the two of us individually and not the business? The goal is to evenly split any commissions between the two of us, no matter what.

I thought I had this figured out already, but after reading this thread I feel as if someone cast a confusion spell on me. So... in nutshell, you need a LLC(or w/e business type) license for each state as well as your personal license for each state? Or could I just use my own name each buy E+0 and general business liability policies. I usually get LLCs for my businesses but dunno about this business.

There is an easier way. You can be part of an MGA that has all the business licenses in place to avoid the headache of your business doing that. You and your partner's business can be contracted with the MGA and the business that you and your partner bring into the MGA can be paid out to your partnership under a business account that you and your partner split.