What is a Decent Preneed Commission?

[cook920]

Just trying to get a client signed for a preneed plan.

I was already doing Final Expense with a company and was going through a Regional Sales Guy for contracting for their Preneed sales when I received a shocking commission schedule.

Ages 0-85 2.25%
Ages 86-115 1.00%

The schedule says this is earned based on premiums received by the company.

I understand that their Single Premium Commissions are like 23%, but this schedule left me wondering.

Someone please let me know if I should be looking for something a little more than this for preneed.

Thanks in advance!

 

[JimmyUt]

Just trying to get a client signed for a preneed plan.

I was already doing Final Expense with a company and was going through a Regional Sales Guy for contracting for their Preneed sales when I received a shocking commission schedule.

Ages 0-85 2.25%
Ages 86-115 1.00%

The schedule says this is earned based on premiums received by the company.

I understand that their Single Premium Commissions are like 23%, but this schedule left me wondering.

Someone please let me know if I should be looking for something a little more than this for preneed.

Thanks in advance!

I just got paid 1/2 of a preneed commission on a 68 year old couple and my split was $1100 . My guy says he gets paid 11% of the total premium. So if it is a 10k funeral, he makes $1100. Not bad.

 

[Newby]

Just trying to get a client signed for a preneed plan.

I was already doing Final Expense with a company and was going through a Regional Sales Guy for contracting for their Preneed sales when I received a shocking commission schedule.

Ages 0-85 2.25%
Ages 86-115 1.00%

The schedule says this is earned based on premiums received by the company.

I understand that their Single Premium Commissions are like 23%, but this schedule left me wondering.

Someone please let me know if I should be looking for something a little more than this for preneed.

Thanks in advance!

A lot of Preneed commissions is based on age and your annual production. Above age 85 you are doing charity work.

You aren't going to get a real good contract until you've turned in some big numbers.

The commissions are based on the face amounts NOT the premiums.

The begining agents will usually make in the teens on the good ages. The top producers can get up in the 30's.

81 is NOT a good age but you are getting a LOW contract offer.
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I missed that you had the same low commission for age 0-85.

No you are being totally taken advantage of with that. Your FMO better have a great excuse for that or I would move every contract you have away from him.

 

[cook920]

Thanks Guys!. Great Points. I received this commission schedule from the Regional Sales Director. He didn't send me the Single Premium schedule though.

I have not worked the preneed side with this company as of yet, but it sounds like I need to look into some more companies for preneed.

This is the second preneed this guy has purchased The first was for his brother with Forethought. Maybe I should look into them.

What would be a decent commission for a newby like myself?

 

[Newby]

Thanks Guys!. Great Points. I received this commission schedule from the Regional Sales Director. He didn't send me the Single Premium schedule though.

I have not worked the preneed side with this company as of yet, but it sounds like I need to look into some more companies for preneed.

This is the second preneed this guy has purchased The first was for his brother with Forethought. Maybe I should look into them.

What would be a decent commission for a newby like myself?

ForeThought doesn't sell their Preneed insurance through channels other than funeral homes. So to get it you MUST have a funeral home owner or manager sign a contract with you.

They do however have their original FE product still available which is called ForeThought Select. It is basically the same as their Preneed product but designed to be sold by regular insurance agents. To contract on it you will need to contact them directly and the first 10 people you talk to will not understand what you want. They will think you are wanting the ForeLife product which is very different.

Your FMO can not usually get ForeThought Select. Only the ForeLife product is distributed to most FMOs.
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ALSO I would definitely look for a different FMO if you feel that you need an FMO at all. HE is the one putting the screws to you NOT the insurance company.

 

[RonRoberts]

Is there a better deal for an agent to strike a deal with a funeral home to be able to offer preneed? Such as:

The funeral home providing leads
Name recognition of funeral home
Higher commissions than with final expense

Just curious?

Ron

 

[0b1kanobee]

Is there a better deal for an agent to strike a deal with a funeral home to be able to offer preneed? Such as:

The funeral home providing leads
Name recognition of funeral home
Higher commissions than with final expense

Just curious?

Ron

Everything I have seen right now puts FE as a bigger money maker. Here where I am people spend average 5k on funeral and 1,300 on cremation. Well at paid in full at 16%, that isn't a lot of money. The commission drops when they pay only certain amounts down all the way to 5% when they put 10% down.

So on 5k with 50% down you get 14% which comes out to $700. You also get no residuals. I would think if there wre money to made writing for funerals, guys like JDeasy would be doing it.

Have to see what Newby says. I think it is apples and oranges. You have FE prospects and funeral prospects and some may want both. It's nice to be able to distinguish what kinda prospect you have in front of you then sell based on their emotional responses.

 

[Newby]

Yes, if you sell for a good funeral home you have an endless supply of leads. You actually have call-ins and walk-ins which you never get with FE.

The commissions are much higher than FE on the good ages. Worse than FE on the older ages (above 81). Your FMOs are not offering decent Preneed commissions. You do not need FMOs on Preneed. Insurance companies have traditionally contracted directly with Preneed agents and funeral homes. When you add an FMO to the mix they suck huge % of your commissions out.

The average Preneed agent makes more money than the average FE agent. But the top FE agents make more than the top Preneed agents do. There are exceptions to all of this.

It is extremely rare for any Preneed agents to also sell FE.

 

[Jason Newby]

Newby,

You state that it is rare for a FE agent to sell PreNeed and vice versa. Based upon your responses here and to other posts would you advise agents to go the PreNeed route to best serve their clients?

I mainly do Medicare here in Indy and have lots of clients that have requested help in this area. I haven't done anything yet. because I want to make sure that I am doing the best thing for them-- preneed vs. FE.

Doing FE through Med Supp companies is already set-up for agents while trying to contact funeral homes to do preneed for them sounds like a whole different ball game-- lot's of leg work and preparation. Everyone encourages agents to cross-sell to help retention and better serve the clients (and probably make money off of us), but it seems like there is a lot to know if you truly want to put the client first and very few people willing to share all the details on which way is best.

Your advice would be greatly appreciated.

Thanks.

 

[Newby]

Newby,

You state that it is rare for a FE agent to sell PreNeed and vice versa. Based upon your responses here and to other posts would you advise agents to go the PreNeed route to best serve their clients?

Your advice would be greatly appreciated.

Thanks.

They are both good products when done correctly and both are terrible products when done incorrectly. They are just two completely different animals.

Selling Preneed is usually more like a captive situation. You work FOR a funeral home. You are generally expected to be AT the funeral home during regular hours ( ie:9 to 5)

You are dealing with more affluent people. You may or may not be allowed to cross sell Med Sups, LTC, etc. but in 90% of funeral homes they would NEVER want you selling final expense, term life or even traditional whole life or UL products.

Preneed agents who are successful are usually less sales minded and more detail minded, and work a MUCH slower sales cycle.

With FE you have complete independence. You sell to lower income people (lowest monthly premium for life mentality). It is much faster paced and is better suited for a more aggressive agent. The sales cycle is MUCH shorter.

I think most successful FE agents would go crazy trying to sell Preneed only for a living. It would be WAY too much record keeping and WAY too slow moving.

So my opinion...both are good for different reasons. Choose one and focus on it. If you get REAL successful at Preneed and write GREAT business that sticks for several years you WILL be noticed by other funeral homes and insurance companies and that is when you can create a position with cross selling opportunities.