- 6,134
I know for a fact they used to preach how renewals were pointless blah blah....they offered 0 renewals after the first year. That could have changed now though.
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- Thread starter spuds77
- Start date
I know for a fact they used to preach how renewals were pointless blah blah....they offered 0 renewals after the first year. That could have changed now though.
- 5,309
Just because I say renewals aren't that important, doesn't mean they don't matter, or that it gives an agency carte blanche to take every last basis point an agent would normally receive, such as in Boman's example.
And 99% of final expense agents are not retiring off of renewals. Unless you are issue-paying $300,000AP annually for 10 years.
magicofreality
Expert
- 55
Do you personally and/or teach your agents to cold knock houses around their leads? If so, how many do you recommend?
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All carriers are 10 year renewals... Some around 16% second year and around 6% years 2-10.
- 5,309
No. You are better off doing seminar marketing instead.
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Fun With Math!
Year 2: $125,000 issue-paid business (Top 10% Agent) x 6% (average renewal rate) = $7,500 in annual renewals.
Year 3: $7,500 in new renewals + 80% of last year's renewals = $7500 + $6000 = $13,500 in annual renewals
Year 4: $7,500 in new renewals + 80% of Year 3 new renewals + 80% of $6000 of renewals in Year 2 = $7,500 + $6000 + $4,800 = $18,300 in annual renewals.
This results in an additional $1,525 in income monthly. And this is off of $3,000AP weekly producer, who would be in the Top 10% of producing agents.
Even if you doubled his production... making him into an elite Mungia/Massi Terminator Agent... you're still nearly $2,000 short of your $5,000 claim.
Where are my numbers wrong?
The one thing I will add... that both Mungi and Massi can attest to I'm sure... is that the "renewal" like income we get is from unsolicited call-ins and referral relationship developed over the years.
Five years into this thing, I have at least 2, maybe 3, cases to write up Thursday that called in last week. AND I get one or two unsolicited call-ins every week now.
That's the fruits of year's of hard labor.
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- 5,309
You're still short by 50% at an imaginary 10% renewal average at Top 10% issue-paid production of $125,000 annually.
Renewals just don't make a measurable difference... unless your an agency-builder or a Terminator agent who produces considerable premium, year-after-year, for at least 5 years and beyond.
- 1,819
I've always saw renewals as something that could knock out the stray chargeback or two.
Nothing to realistically retire on.
magicofreality
Expert
- 55
That's a great perspective.... Makes sense.
- 30,589
How many of the "typical" FE buyers do you think will even be on the books for 10 years? I'll bet it's a small %. IF they stay on 10 years almost all companies greatly reduce the renewals after 10 years...some stop completely. Hardly anything you could retire on.
- 5,309
Correct. The final expense renewal business is in:
1) Writing a high-renewal carrier exclusively like Columbian or Settlers, or, more likely:
2) Building a large final expense agency.
If an agent wants lasting renewals after they quit selling new business, they need to get into a market other than FE for two reasons. One is the income level of the average FE buyer but the main reason is the age. If you are writing people with an average age of 65-70, you are going to be surprised as to how quickly they die off. The same is true of the Med Supp market.
