The Pain of Comp Cut!

[Crabcake Johnny]

The math is pretty easy and it's what I go over when anyone contacts me for advice on becoming an independent health agent without selling any other line of products:

Average annual volume = $3,000
Average commission = 10%
Average comp per deal = $300
Average cost to gain a client = $100
Net = $200
Average deals issued per week = 3
Total average weekly pay = $600

Now, there's a LOT of room in there - from zero to six figures depending on many factors but $600 a week is the baseline.

 

[GeminiGroup]

Based those #'s Johnny

Would you suggest even starting in the health or limited health business, when life or p/c are out there?

Granted a person NOT already on the health side.

 

[djs]

Numbers for P&C are worse:

Average annual policy premium = $1,000
Average commission = 10%
Average comp per deal = $100
Average cost to gain a client = $100
Net = $0
Average deals issued per week = 5
Total average weekly pay = $0

And no, I'm not kidding for P&C.

It's all about renewals.

Dan

 

[Crabcake Johnny]

Based those #'s Johnny

Would you suggest even starting in the health or limited health business, when life or p/c are out there?

Granted a person NOT already on the health side.

I don't think it's my job to recommend or not recommend - just to lay out the math.

To some agents, $600 net per week first year is just fine. It's $30,000 first year, you work from home and have a job.

Some agents are young and that's fine, others have working spouse and it's no issue.

 

[P&cmi]

We not sell health with

Critical Illness
Accident
Life
Disability

 

[Crabcake Johnny]

Because that's mainly a failed concept for most agents mainly being hammered into agent's heads by agencies who have lost out on overrides.

This is not to say there's no value in those products but it's not as easy as turning health into a Billy Mays pitch "...but wait, there's more!"

Products need to fit your client's needs. Not be something that's pitched to everyone to compensate for commission cuts.

 

[P&cmi]

I show three proposals and let the client choose. Sometimes they pick just the health. Sometimes they pick number three that has it all. Most is option two. Health with one or two options.

 

[taterpeeler]

I show three proposals and let the client choose. Sometimes they pick just the health. Sometimes they pick number three that has it all. Most is option two. Health with one or two options.

And you sire are Montey hall... and I THINK you sell chit they dont need.... booyaa

 

[P&cmi]

Thats Funny chit. They pick it so they most see value in it.

 

[somarco]

The days of a truly independent agent working by himself as a health agent are virtually over moving forward. Carriers spend to much money on this model.

Care to expand on this?