Realistic Expectations of Residual Income

Jun 19, 2007

  1. hbkmat
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    hbkmat Expert

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    Hello my name is Matthew and I am getting into the life and health business. I live in California and will primarily focus on the health side of things. I understand the first year potential for signing up new clients but I have not seen a thread that talks about residual income. What type of residual income is possible doing this business. Does it keep going forever until all health insurance agents are making millions of dollars a year. Or do most agents cap out at a point where clients drop as fast as you sign new ones up? I hope someone can shed some light on this topic because it is one of the main reasons I am looking into this career besides the fact that I love helping people. Thanks this is my first post.
     
    hbkmat, Jun 19, 2007
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  2. STIBROKER
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    STIBROKER Like My post and enter the DRAWING,,,, Moderator

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    and what company are you working for......
     
  3. hbkmat
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    hbkmat Expert

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    Will be independent selling Blues, assurant, healthnet, kaiser to start
     
    hbkmat, Jun 19, 2007
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  4. hbkmat
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    hbkmat Expert

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    almost forgot goldenrule
     
    hbkmat, Jun 19, 2007
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  5. CHAS.R
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    Hey Matthew, I am a new agent here in CA. My understanding is that generaly as long as your clients pay thier premiums you will get a residule.

    What I do not know is how long your Carrier will continue to pay those residules. I'd imagine it varies from Co to Co. assuming there is a limit. However, this is a good question for your sponsor or your carrier altogether.
    I have a friend who is a life agent for 7 years now that admits it is tempting to allow the residuals to carriy you some months. But with consistancy and good program that promotes meeting new clients as well as referals you will not run out of income even if the current paying clients drop policies or do not pay thier premiums.
    Continue to "stoke the fire" daily. That means daily talking w peolple who will do business with you or with people who will be good referals for you. Remember that steady plodding brings prosperity.

    Good Luck. Chas
     
    CHAS.R, Jun 19, 2007
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  6. somarco
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    somarco GA Medicare Expert

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    Take your annualized first yr premium, multiply by 1.15 (rate increases). Then take that number and multiply it by .90 if you do an outstanding job and work primarily with folks who will NEED their insurance for years to come.

    If you don't do a very good job of matching the client with the product, and dealing with the right client then you might want to lower your sights a bit and use .60.

    Multiply that figure by 5%. That is an estimate of your first year renewal income.

    YMMV
     
    somarco, Jun 19, 2007
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  7. hbkmat
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    hbkmat Expert

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    So of the companies I mentioned on average he renewal commissions after the first year are around 5%?
     
    hbkmat, Jun 19, 2007
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  8. somarco
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    somarco GA Medicare Expert

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    Probably. Each Blue plan pays differently. In GA they pay 10% level, first & renewal. Most carriers offering hi-lo commissions pay around 5% renewal.
     
    somarco, Jun 19, 2007
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  9. Dave020
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    Dave020 Super Moderator Moderator

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    On IFP business (at standard rate):

    Blue Cross CA - 20% 1st Year/10% Life of contract (actual premium)
    Blue Shield CA - 20% 1st Year/10% Life of contract (actual premium)
    OR 21% 1st Year/11% Life of contract (fixed at original premium
    does not pay increases)
    Health Net CA - 20% 1st Year/10% Life of contract (actual premium)
    PCare* - 20% 1st Year/10% Life of contract (actual premium)
    Kaiser - $100 per head 1st Year/$50 per head renewal (referral fee)

    Watch out for PacifiCare, they are now UHC and the new contract has ZERO vesting, read it carefully! It blows!

    Group:

    Standard is 10% life of contract with decreases at premium points during the focal year.
    Western Health Advantage - 5%
    Kaiser - flat fee per head about $14.00

    Dental - About 20%/10% for individual 10% for small group



    The key is to read the contract with each carrier to determine how the vesting is set up. Blues are life of contract even in the event of death of the agent (beneficiary paid)

    Dave
    www.davefluker.clom
     
    Dave020, Jun 19, 2007
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  10. salpro22
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    salpro22 Guru

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    I gotta start selling in Cali :)
     
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