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I was curious how long the average FE policy lasts before it lapses or a claim is filed? Also are there any stats anywhere on the average persistency industrywide?
What is the Average "life" of a FE Policy?
- Thread starter jacobtn
- Start date
- 17,072
I have always heard 8 years but it's usually because of death not lapsing.
I really don't have very, very few lapsing.
I really don't have very, very few lapsing.
- 11,280
Newby said:
So you have a lot that lapse? I thought you were better than that....
- 17,072
I didn't not have many not drop off and negative on the not crash & burns neither.
G
Guest
Guest
What is the average lapse rate?
- 11,280
Newby said:
I thought that wasn't what you didn't mean...
This is a great topic question, I often lay awake at night thinking about this.
I hear some managers talk about big upfront commissions but getting burned on the back end. I listen and see their point, However...
If I was looking at 2 contracts and the first contract showed 15-20% more in the front 5 years of the contract vs the other.
While the 2nd contract had 15-20% more commission paid over all in the first 10 years because of better renewals in years 6-10.
Which one would I choose?
I like the front loaded one because what % of your business makes it to year 6? When you include NBR, persistency, and deaths I believe its possible the amount of premium you lose will not offset the difference in commission on years 6-10.
I do think a yr 2-10 level renewals are good from a manager stand point because consistence override renewals are important. Perhaps why people on this forum like that type of contract.
Which would you all choose?
I hear some managers talk about big upfront commissions but getting burned on the back end. I listen and see their point, However...
If I was looking at 2 contracts and the first contract showed 15-20% more in the front 5 years of the contract vs the other.
While the 2nd contract had 15-20% more commission paid over all in the first 10 years because of better renewals in years 6-10.
Which one would I choose?
I like the front loaded one because what % of your business makes it to year 6? When you include NBR, persistency, and deaths I believe its possible the amount of premium you lose will not offset the difference in commission on years 6-10.
I do think a yr 2-10 level renewals are good from a manager stand point because consistence override renewals are important. Perhaps why people on this forum like that type of contract.
Which would you all choose?
- 19,645
I would take lower first commission for higher renewals if given a choice. However, you can get high first year commissions and high renewals.
If all you are getting is contracts, get both. If you are getting other things from the IMO, leads, training, support, etc. Those things have to be taken into account.
- 17,072
lsalmans said:
It doesn't work quite like that. I once had an agent ask for a release from Settlers because he was offered a 110% and I had him at a 105%. His new contract had him at 5% on years 2-10 and mine had him at 11% 2-10 and 3.5% 11-forever.
Yes, I released him. He was too stupid to keep.
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