PreNeed Commissions schedule

[Serena]

Hey insurance forum,

I am just starting out on my own and received a commission schedule for pre-need insurance sales that shows the following for single & 1 year pay plans:

Age 50: 14.72%
Ages 51-55: 13.80%
Ages 56-60: 13.62%
Ages 61-70: 12.43%
Ages 71-75: 8.28%
Ages 76-80: 7.18%
Ages 81-85: 3.86%

3, 5, and 10 year plans yield much higher commissions (20-25%)

Does this seem below, at, or below average? Any advice is appreciated

 

[Lawsonhj1]

Starting out on your own meaning "Funeral Director will you accept my preneed" they know your independent and you and or your team may write for their competitors.

or meaning "Funeral Director I'm moving in taking over and running the show those other marketing companies are clueless?" so your in house on their contract or yours?

Fair is what you agree to. Are you asking if there is a possibility of more?
I know nothing of CT. Out west I know of a few would give you more.
The ones I know would get more excited is if they thought you were bringing a decent funeral home into the game and taking over family service.

Do you have one or more funeral homes lined up who will accept your business?

 

[Serena]

These are very interesting points you bring up. I am interested to explore this further...so Connecticut is a very restricted state, in that you need to be a licensed funeral director to sell preneed contracts. I was working with a corporation writing preneed, and decided it would be in my best interest (and probably in the best interest of the families i'm serving) to leave the corp and do my own thing. So I created a funeral planning service that markets directly to consumers and then places them with their preferred funeral home, more or less acting as an advocate to ensure high quality service and fair prices. That being said, I do have a handful of funeral homes that want to play, as well as a group of funeral homes in another county that will feed me walk in/call in business.

So now my question to you is...are these commission schedules regularly reviewed, perhaps dependent on performance year over year? Does each funeral home need to have its own commission schedule? Or only if they're giving you the business? Am I better off to go directly through insurance companies or through a 3rd party marketing agency for higher commissions even though they're taking a cut? From what I understand not many people are doing it this way, but in CT there is a need to be filled and I'm trying my damndest to fill it!!

 

[Lawsonhj1]

As far as commissions it's what you negotiate as far as reviews it what you negotiate. No matter what you are under a marketing company I just prefer ones that leave me alone. If I wanted quotas and meetings I'd still be with a funeral chain. So the Planning Service you created any bites and where did you take them? To truly be independent preneed you normally need at least one funeral home who will agree to take your business. They will need to sign a basic agreement. Do you have a funeral home lined up? If not call around say you have a client, and will they accept your preneed? That will be interesting independent funeral homes fall into several categories there.

 

[Serena]

Guess I better start negotiating...Thank you for your input, you have brought a lot of light to what I'm doing and where I need to change course. My planning service is already getting bites because I have built relationships with conservators, social workers, and group home managers for lots of steady title 19/medicaid work. Currently I am using a product that doesn't require a specified funeral home. I do have 4 funeral homes and a crematory that will take my business and they are signing an agreement. Apparently I am going to have multiple agreements with various funeral homes as well as several different insurance carriers. It will be a lot to keep up with, however if it means no meetings or daily reporting, I am all about it!!

Do you use your own CRM? Any recommendations on something that's already suited for the sort of sales we're doing? Also...do we need E&O insurance if we're only selling preneed? My instincts say yes, but the marketing agency said the insurance carriers provide it??? Have you ever heard of such a thing?

 

[Lawsonhj1]

Guess I better start negotiating...Thank you for your input, you have brought a lot of light to what I'm doing and where I need to change course. My planning service is already getting bites because I have built relationships with conservators, social workers, and group home managers for lots of steady title 19/medicaid work. Currently I am using a product that doesn't require a specified funeral home. I do have 4 funeral homes and a crematory that will take my business and they are signing an agreement. Apparently I am going to have multiple agreements with various funeral homes as well as several different insurance carriers. It will be a lot to keep up with, however if it means no meetings or daily reporting, I am all about it!!

Do you use your own CRM? Any recommendations on something that's already suited for the sort of sales we're doing? Also...do we need E&O insurance if we're only selling preneed? My instincts say yes, but the marketing agency said the insurance carriers provide it??? Have you ever heard of such a thing?

Sounds like you are further along than I thought. Independents can be sneaky keep an eye on your business make sure they don't backdoor you. The only reason I'm in preneed anymore is because I can sit at home and pop them by phone for me super cheap cremations. I make sure my clients know that I am Me Me Insurances Services and I'm there to keep it all legal. In other words they are becoming my book of business for Medicare bait, annuities , anything else I can get. So even if they Plan Ahead with XYZ Funeral Home their agent is ME ME Insurances Services.

 

[Newby]

Hey insurance forum,

I am just starting out on my own and received a commission schedule for pre-need insurance sales that shows the following for single & 1 year pay plans:

Age 50: 14.72%
Ages 51-55: 13.80%
Ages 56-60: 13.62%
Ages 61-70: 12.43%
Ages 71-75: 8.28%
Ages 76-80: 7.18%
Ages 81-85: 3.86%

3, 5, and 10 year plans yield much higher commissions (20-25%)

Does this seem below, at, or below average? Any advice is appreciated

That’s about half of what will be available to you once you get a good track record. But if you don’t have any production to show from previous years no one‘s going to offer you the big levels.

 

[Lawsonhj1]

Strategy wise if someone had four funeral homes who would take your business and you were in control I would stick to one carrier contract who gives you the highest commission and use the others as an ace in the hole when you need to renegotiate down the road.

Eventually you might run into a funeral home owner who prefers one carrier company or another for some goofy reason then deal with it. Sometimes the goofy reason might not be so goofy like growth rate or they like how one handles claims. Most the ones take my business don't ask about growth and let me sign as director for them so I don't need to chase down signatures. I have one funeral home hasn't changed prices in seven years because they don't know how owner was born there in about 1935 upstairs was the living quarters.

 

[Newby]

Strategy wise if someone had four funeral homes who would take your business and you were in control I would stick to one carrier contract who gives you the highest commission and use the others as an ace in the hole when you need to renegotiate down the road.

Eventually you might run into a funeral home owner who prefers one carrier company or another for some goofy reason then deal with it. Sometimes the goofy reason might not be so goofy like growth rate or they like how one handles claims. Most the ones take my business don't ask about growth and let me sign as director for them so I don't need to chase down signatures. I have one funeral home hasn't changed prices in seven years because they don't know how owner was born there in about 1935 upstairs was the living quarters.

The "goofy" reason that the funeral home owner if he has half a brain will want to select the pre-need company is because his interests will conflict with the agent's. The agent wants higher commission. The funeral home needs higher annual growth of the death benefit.

Any preneed company will design the product with HUGE commissions 30%+ if growth is minimized. They will also design one with huge growth if commissions are minimized.

Right now with interest rates squeezed as tight as they have been the past decade there is less to work with than there was in the past. We used to see 4%+ compounding growth on those policies. And with 30% commission to work with at the same time. Those days are gone for now.

But you have to work with the funeral homes to find a happy medium that you can both live with.

Another thing to work out is: Are you going to be the agent on EVERY preneed contract that runs through that funeral home? Or is the owner or one of the directors licensed and going to write the walk-ins and call ins? Huge difference. Because when you start spending big dollars marketing for them it generates more call ins and walk ins than other responders. The funeral homes never recognize that. They think it just got busy naturally and write up all your business if you don't get that iron clad.

Any funeral home I have sold for THAT was my #1 condition. If the owners mother wants to preplan I am the agent. No exceptions. Because I spent a LOT of money and a LOT of man hours generating that business. It ALL has to go through me. But I never would sell for two competitors in the same market either. You sell for ONE funeral home and you show sizable increases to their market share. That is how you make yourself very valuable and earn the top levels. Very few agents will do that work. Most just want to skim the easy cream off the top and that really adds no value or growth to the funeral home.

 

[GC Preneed]

The growth on preneed products is total utter bullshit. It's discretionary non-guaranteed simple interest. Any FH taking the bait of growth versus commission in hand doesn't understand math or contracts. Unfortunately this is the norm in the industry. BTW @newbie2001 once someone has a track record they should be earning 20-30% on single pays (below 75) and approaching 40% on standard issue multipays (all as a percent of face). Good track record, btw, is over 1M in face over several years. Of course, many funeral homes want a slice of that commission, so plan accordingly.

Credentials: 140M/year in preneed face - VP at goldenconsiderations.com