Tennessee--Selling a Book of Business

kellys3angels

New Member
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Hello! I am new to this forum. My father passed away in May of this year. He sold Medicare supplements and a few other small dental and life policies. His book of business is not extremely large....totaled about $16,000/yr in commissions, most of it being with BCBS, Humana, and Mutual of Omaha. We have someone that is interested in buying his book of business, but my mother and I have no idea where to begin with selling this. In fact, we didn't even realize until recently that it was even a possibility. She would rather just have a lump sum than be reliant upon the buyer to pay her a portion of commissions each month, but is not completely opposed to that idea either.

Is there anyone who can offer us some advice on this and where to find out how much she might expect to get from a buyout? Or at least where to start bargaining? Thank you so much. Although my Daddy sold insurance, unfortunately due to his health problems, he wasn't able to get much life insurance on himself, therefore I am trying to do what I can to help my mother out. Thanks so much!!

Kelly
 
Hello! I am new to this forum. My father passed away in May of this year. He sold Medicare supplements and a few other small dental and life policies. His book of business is not extremely large....totaled about $16,000/yr in commissions, most of it being with BCBS, Humana, and Mutual of Omaha. We have someone that is interested in buying his book of business, but my mother and I have no idea where to begin with selling this. In fact, we didn't even realize until recently that it was even a possibility. She would rather just have a lump sum than be reliant upon the buyer to pay her a portion of commissions each month, but is not completely opposed to that idea either.

Is there anyone who can offer us some advice on this and where to find out how much she might expect to get from a buyout? Or at least where to start bargaining? Thank you so much. Although my Daddy sold insurance, unfortunately due to his health problems, he wasn't able to get much life insurance on himself, therefore I am trying to do what I can to help my mother out. Thanks so much!!

Kelly
It all depends on how many years are left to pay out on the policies. I am just taking a stab at it but I wouldn't expect more than $25k. That may be a highball amount too...
 
senior-advisor-indiana:

I am not sure I understand what you mean by "left to payout on the policies", since the majority of these are renewals from Medicare Supplements, would they not be until they either/if switch agents, policies, or pass away?

But oh my goodness, your figure is WAY higher than anything we imagined. I had read figures of 1.5-2 x the amount of commissions, but I really had not figured we could get anything like that and was more looking toward the possibility of $10-12k, but thought I was being unrealistic with that even.

My initial thoughts were to ask for $12k paid out in quarterly installments over a one year period. Does that sound like a feasible way of doing it? Are we setting ourselves up for a disaster doing it that way?
 
senior-advisor-indiana:

I am not sure I understand what you mean by "left to payout on the policies", since the majority of these are renewals from Medicare Supplements, would they not be until they either/if switch agents, policies, or pass away?

But oh my goodness, your figure is WAY higher than anything we imagined. I had read figures of 1.5-2 x the amount of commissions, but I really had not figured we could get anything like that and was more looking toward the possibility of $10-12k, but thought I was being unrealistic with that even.

My initial thoughts were to ask for $12k paid out in quarterly installments over a one year period. Does that sound like a feasible way of doing it? Are we setting ourselves up for a disaster doing it that way?
$16k X 1.5 =$24k...............................

Med supp generally pay out for 6-8 years. Could be different in Tennessee. I would check the link pcb posted...
 
Hello! I am new to this forum. My father passed away in May of this year. He sold Medicare supplements and a few other small dental and life policies. His book of business is not extremely large....totaled about $16,000/yr in commissions, most of it being with BCBS, Humana, and Mutual of Omaha. We have someone that is interested in buying his book of business, but my mother and I have no idea where to begin with selling this. In fact, we didn't even realize until recently that it was even a possibility. She would rather just have a lump sum than be reliant upon the buyer to pay her a portion of commissions each month, but is not completely opposed to that idea either. Is there anyone who can offer us some advice on this and where to find out how much she might expect to get from a buyout? Or at least where to start bargaining? Thank you so much. Although my Daddy sold insurance, unfortunately due to his health problems, he wasn't able to get much life insurance on himself, therefore I am trying to do what I can to help my mother out. Thanks so much!! Kelly

First, I just want to say sorry for your loss.

Depending on what's left of the renewal payout and where the book is located, I may be interested in purchasing the book of business. Usually 1-1.5 times the yearly income is normal for a small book of business. I wouldn't suggest doing anything but a lump sum payment. If you're interested let me know. Thank you!
 
Thank you Knox.

We are located in Cleveland, TN. Yes, we are looking for a lump sum payment. We have been offered a commission/month buyout, but we are not interested in that. We would like to just be done with it, without too much hassle for us. Therefore, without a decent amount, it just really isn't worth it to us to try to pass the business along. My father loved and babied his customers and we were just hoping to find someone that felt the same about their customers and would do the same for his.
 
Thank you Knox.

We are located in Cleveland, TN. Yes, we are looking for a lump sum payment. We have been offered a commission/month buyout, but we are not interested in that. We would like to just be done with it, without too much hassle for us. Therefore, without a decent amount, it just really isn't worth it to us to try to pass the business along. My father loved and babied his customers and we were just hoping to find someone that felt the same about their customers and would do the same for his.

Good morning. My boss is actually looking to purchase smaller agencies, particularly with Medicare supplements. He's purchased one agency before so he has some knowledge about the process.

He's a really good guy so I think you'd benefit from speaking to him.

He lives in Pleasant Shade, TN. If you'd like to message me your contact details I can give it to him.

Thanks
 
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