Selling Life Insurance...

[James]

I'm up to speed on health, but not life so forgive my ignorance.
What companies offer term commission up to 115% and is that direct or through an IMO? If it's an IMO, who is it?? Most of the numbers I've been given for term are 90%-100%.

It comes usually with production, or agencies like Randy Murray will pay 115% straight up on term commission. Just ask whatever IMO or GA about it before signing any contract, they'll let you know what they have available.

 

[padthaiforlunch]

Through May From Custom Insurance Brokerage, regardless of production....
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75.00% - 105.00%​

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[Ahnuld]

It comes usually with production, or agencies like Randy Murray will pay 115% straight up on term commission. Just ask whatever IMO or GA about it before signing any contract, they'll let you know what they have available.

James,

What is meant by, "straight up?" And if that means you can get a 115% commission level, which company pays that and is that accompanied with minimum production requirements?

Thanks you.

padthaiforlunch: Through May From Custom Insurance Brokerage, regardless of production.... Does it make you want to go sell some 30 year term?

padthaiforlunch,

"Through May from CIB..." Does this mean they have lifted the minimum production requirements temporarily until May on these term products? And presuming that is the case, are the production requirements reinstated May 1?

Thank you, too.

 

[moonlightandmargaritas]

Ahnuld...had to let you know...cool avatar.

 

[Ahnuld]

Ahnuld...had to let you know...cool avatar.

Thank you.

 

[padthaiforlunch]

padthaiforlunch,

"Through May from CIB..." Does this mean they have lifted the minimum production requirements temporarily until May on these term products? And presuming that is the case, are the production requirements reinstated May 1?

Good question. I only use CIB for annuities, but they send me e-mail trying to induce me to place biz with them. I'm contracted with West Coast through ECA and have no production requirements with street level commissions as listed in my earlier post. In fact WC is offering an additional 5% commission on 15 and 20 year term.

 

[James]

James,

What is meant by, "straight up?" And if that means you can get a 115% commission level, which company pays that and is that accompanied with minimum production requirements?

Thanks you.

Some companies you have to go thru a GA, other companies you can get a GA contract thru depending upon your production history. A lot of agencies will boast a 100% rate on AIG which if I remember correctly don't contract straight to agents, I go thru several GA's as in mutliple appointments, AIG still allows that or did last year. Best Agency always gave me 100%, so a local agency calls up and I simply say, "sure I'll sign up, I want 115% on AIG" straight up, no production requirement is what I mean by straight up. I get 115% on the first sale and every other sale.

I would suggest to call up all local GA's or FMO's and ask them what they are offering, and be willing to say what you want! If you can not find a compromise you like be prepare to walk, a lot of fish in the river as the old saying goes.

 

[Ahnuld]

Good question. I only use CIB for annuities, but they send me e-mail trying to induce me to place biz with them. I'm contracted with West Coast through ECA and have no production requirements with street level commissions as listed in my earlier post. In fact WC is offering an additional 5% commission on 15 and 20 year term.

Thank you for the explanation. Then the commissions you posted earlier are not, I believe, street. So it appears that CIB is paying these higher commissions as bonuses without production req's until May 1 as an incentive. I'll have to give CIB a ring about their promotion on level term.

 

[Ahnuld]

Some companies you have to go thru a GA, other companies you can get a GA contract thru depending upon your production history. A lot of agencies will boast a 100% rate on AIG which if I remember correctly don't contract straight to agents, I go thru several GA's as in mutliple appointments, AIG still allows that or did last year. Best Agency always gave me 100%, so a local agency calls up and I simply say, "sure I'll sign up, I want 115% on AIG" straight up, no production requirement is what I mean by straight up. I get 115% on the first sale and every other sale.

I would suggest to call up all local GA's or FMO's and ask them what they are offering, and be willing to say what you want! If you can not find a compromise you like be prepare to walk, a lot of fish in the river as the old saying goes.

Thanks for the inside "straight up." If I take your meaning correctly, "straight up" is asking the FMO/GA how high can I go before I hit production requirements?

I'll have to take up your suggestion and call up some FMOs/GAs. It's funny, but I have never heard of that expression before...and my wife has always called me a "Mr. Know-It-All." But that's another story.

Let me take a wild shot, are "production requirements" ever referred to as "the brick wall?"

 

[James]

Actual case from about five weeks ago, everything done and delivered, now waiting on commission.

WL Participating kind from MM, has existing term for another 18 years, fairly low cost from AIG of 500 grand.

Open up a HELOC on his home, which he has about $115,000 in equity on a 230 grand home, so no sub prime loan here! What that did though is basically free up his Rainy Day fund, he no longer needs that 20 grand sitting in a savings account earning a whopping 2% rate. The plan is to transfer 10 grand over the next two years to his ROTH and 10 grand to his WL contract, for a specific reason. He is going to start his own "Bank", Bank of Joe Sixpack. His grandfather did the same thing, yet no one was able to explain it to him in a decent straight forward way.

So basically what we are doing is opening up a $250 grand WL, HECVWL from MM, target premiums of $4,470 and additional $5,000 in year one and two, plus a transfer of $5,000 from a UL he has that is sucking wind (I didn't sell that one to him), that is ended! So he now has $500,000 term and $250,000 WL for a total of $750,000.

Now the plan is this, in five years he needs $30,000 plus the value of his boat which he estimates that he can get around 15-20 grand when he sells it. Giving him about 50 grand for a new boat, if one is a fairly smart buyer and times it correctly, one can get a decent boat for $50,000 in 5 years. Now obviously if he doesn't have it, he'll borrow the money or he can now borrow it from himself! Plus to fund his Retirement fund he'll pay himself back using a 5% interest rate, or $566.50 for 60 months. That money goes back to the WL in a form of PUA.

Now at the end of 5 years using a 5% figure which here is what they have been crediting in dividends for the last 25 years, https://fieldnet3.massmutual.com/fnmmfg/life/pdfs/li7016.pdf Personally I think 5% is a safe amount. According to my illustration in the fifth year he'll have $33,444 in CV, likely more if the economy doesn't completely collapse in the next few years. Hopefully the reckless behavior of those Investment Banks don't destroy our economy! Now he'll keep collecting interest on the total after he pulls the money out, Mass Mutual is not a DR company.

Now in ten-twenty-thirty years (not counting the repayment of loan, that only increases the amount significantly) CV and DB.
Ten Years.....$63,314 DB.....$457,000
20 Years.......$151,530 DB.....$650,000
30 Years.......$338,185 DB.....$1,056,000

Now in year 12 or 13 if he wants he can basically stop all payments and allow the Dividends to pay the policy. Basically it would be a paid up policy if he wanted out at this time with a fairly large DB to last for life.

Now as far as the Retirement Funding, of course he has some money saved, not much and fears in the next few years its going in a downward trend, thanks IB's! No wonder he wants to start his own bank! Okay, he's planning on retiring around 70, figures what ever happens surviving on his savings will be a breeze till he hits 80 then it gets dicey! He wants to live the high life while he is healthy and young enough to enjoy it, so the first ten years on his retirement fund is about as long as we can count on that, at 80 he'll likely slow down but still wants a comfortable life. So at 80 not counting in the extra money from borrowing and paying back, just using the low figure of 5% and his $4,470 yearly premium he is looking at a CV of $706,542. So he has this decision, he can start taking out withdrawals and loans of a significant amount or just take the Dividends, using 5% that would be $35,000 what I would consider minimum, if we use 7% that they are paying today and was paying up to 12% a few years ago, that amount could easily be in the range of $50,000 and up! Now if I go back and figure in the loan repayments after the 7th year (the whole MEC thing), that amount starts climbing and closer to $100,000 yearly (dividends) he can use to aid his other retirement money, basically minimum amounts, likely larger amounts will be realize when the fat lady sings!

Now what kind of position will this guy be in if he completes this plan? The whole idea is to start shifting monies away from bad debt, or paying to much for that debt. The Heloc is in place, if he desires he can wrap his credit debt to a lower interest rate and then transfer that in future years to the WL loan feature. Basically at age 50, he can use that $60 grand plus his added money from the boat ($50,000 plus interest minus cost of interest on loan) are $100 grand plus, to pay off bad debt, buy a car and instead of paying out interest to third parties he pays it to himself! Now at the age 60, 70 he can start loaning money out to children/grandchildren, if that is something he wants to do. His Grandfather did the same thing, charge his kids equal to what the company charge him on his WL policy.