Producer Contract Negotiations

[goillini52]

So is it just not possible for an Agent to contract with the carriers directly?

I'm wanting to strike it out on my own, but it sounds like I can't create my own producer contract without an IMO involved

Most want you to go through a FMO...especially with Med Supps.

 

[pfg1]

Most insurance companies will pay agencies up to 140% of the first year premium. Now considering that they potentially have a new client that is going to pay for their plan for the next 10 + years they can afford to do so in the long run. Some agencies give you super low contact levels because they are greedy taking your earned comp and distributing it to people who #1 don't even sell insurance anymore #2 don't help you sell insurance and #3 run these stupid ridiculous contests to motivate you to work and give some of your earned comp too the peeps that win. That last part obviously wasn't necessary to answer the question. I'm just a bit salty from my last imo. Carry on

That is not completely true. You need to specify what area of insurance is giving those high comps. Most traditional life carriers don't pay like that at all, in fact 80-90-100 is more realistic.

So is it just not possible for an Agent to contract with the carriers directly?

I'm wanting to strike it out on my own, but it sounds like I can't create my own producer contract without an IMO involved

Yes, some carriers contract directly. Most go through an IMO/FMO. And that is not all bad, some IMO's can add value. And some the opposite. LOL. Do your homework.

 

[Todd King]

So is it just not possible for an Agent to contract with the carriers directly?

I'm wanting to strike it out on my own, but it sounds like I can't create my own producer contract without an IMO involved

Most FE companies won't take agents direct. Some do, but not many. As for Med Supps, yeah, you can go direct with many....but why?

Many IMOs/FMOs have tools that you can use whereas the companies don't. It's not normal to be better off straight with the company.

 

[Mike007]

Ieevena - I'm licensed in property & casualty, life, and health. I mostly focus on P&C. Life, or health, would just be cross-sell opportunities. They're actually offering quite a bit of support, in the form of clerical, in-office expenses, etc.

Markthebroker - Sound advice. I'm wondering if that means I've got to track two posts. I'll remember for next time.

Goillini - Thank you. At 130% for new policies, the agency is paying me more than their commission. Are you being serious? How'd you arrive at those percentages? Serious question. No sarcasm intended. Also I love your quote about timid salespeople.


Thanks everyone.

The 130% is only in the final expenses market and that is only on certain products or underwriting qualification . some final expense products payout even less than 100%.

If you are looking to sell Term, GUL, IUL, or Whole Life, it's going to be around 80%-100%. And with agency support, you may be looking at 70%-80% commission. It also depends on how high that agency's contract is. They can't give you everything and get nothing. They need to have some override to pay for expenses and profits as well.

 

[goillini52]

It's not normal to be better off straight with the company.

Who says he's normal?

 

[Tahoe Ray]

The 130% is only in the final expenses market and that is only on certain products or underwriting qualification . some final expense products payout even less than 100%.

If you are looking to sell Term, GUL, IUL, or Whole Life, it's going to be around 80%-100%. And with agency support, you may be looking at 70%-80% commission. It also depends on how high that agency's contract is. They can't give you everything and get nothing. They need to have some override to pay for expenses and profits as well.

Yep...and DI is going to be closer to 50-60.

And since OP asked, renewals on traditional life are almost non-existent (with whole life being the exception).

DI renewals can be great but are predicated on your production with most carriers. You'll often start at 5% but if you write any meaningful business with a carrier (25kish) you can easily be at 10-15% or more.

 

[KC Catfish]

Who says he's normal?

I'm not, my mother says I'm special

 

[William76]

I think I might need to clarify, or at least make sure I'm understanding y'all correctly. What I'm concerned with is my producer commission off what the agency receives. I think some of you are saying the agency gets 140%. What's a realistic producer (new business) commission from that, please? On group life, health, disability, dental, vision, etc.

Again, thanks everyone.

 

[goillini52]

I think I might need to clarify, or at least make sure I'm understanding y'all correctly. What I'm concerned with is my producer commission off what the agency receives. I think some of you are saying the agency gets 140%. What's a realistic producer (new business) commission from that, please? On group life, health, disability, dental, vision, etc.

Again, thanks everyone.

Don't worry about what the agency/FMO is getting. Worry about what you can get. You should give Todd King a call. He's a straight shooter and will tell you what each type of insurance pays.

 

[Tahoe Ray]

I think I might need to clarify, or at least make sure I'm understanding y'all correctly. What I'm concerned with is my producer commission off what the agency receives. I think some of you are saying the agency gets 140%. What's a realistic producer (new business) commission from that, please? On group life, health, disability, dental, vision, etc.

Again, thanks everyone.

You're only selling group?