Time for Some Straight Talk
As a new agent the insurance industry offers some great opportunity for you. Focusing on Final Expense is a very focused area of insurance where the top agents DO make $200,000+ and some agents do earn $100,000 within their first year. But the reality is, most agents don’t make it at all.
Half the agents that get into Final Expense will fall into traps and bad deals that will drain your time, money and energy. Pay CLOSE attention to any offers you are considering to look for these signs:
1. Recruiter Pitching– Some of the huge agencies pitch that the road to fast riches is for YOU to recruit a down line. Many new agents fall for this. Does it make any sense? Absolutely not. You have no knowledge. You have no higher commission than any new agent can get. Usually these guys are throwing 80% contracts at you with promises that you will go to 100% once you recruit 5-agents. But the truth is, your 5-agents can get 120% by jumping past you and going straight to us. How would this ever work out for you? It doesn’t. The only way that you will have any value to your down line is AFTER you have success selling the product your self. Then agents will be attracted to you like bees to honey and will be wanting to sign up under someone who can actually help them. Trust your gut feeling on this one! If you make a few sales and recruit a few agents and then fail out (which you will if your focus is distracted away from selling insurance) you lose but your up line wins. They get your renewals if you don’t keep your license active AND they have several more low-commissioned “patseys” to keep the cycle of despair going.
2. Giving up too much commission- Giving up commission long term is a wrong move. For most agents, the first 80% of the commission covers their cost of living (house, car, food, taxes, etc.) the next 20% covers their lead cost and the last 10% to 20% is their getting ahead money. If you are spending $600 per week on leads you should be writing $3,000 to $4,000 per week very consistently. The numbers work. But if you are on 80% contracts it will still be hard to get ahead. Street level with FE companies is 110-125% for every agent. If you are giving some of this up, there needs to be a good reason.
3. The look how much others have made gimmick: One very active Final Expense Company that recruits heavily loves to show you how much your managers make to entice you to sell their FE product. They are selling the most over priced FE company known to exist but pay the lowest commissions and renewals of all companies. This is a manager’s dream but the selling agent’s nightmare. And the carrot they hang out there to keep you chugging along is…maybe you can be a manager someday too! Not likely. That one is a revolving door of broken agents. They pitch financing your leads through them to make you in debt to the company so once you realize that the grass is greener selling the better priced companies and making higher commissions, you are so far in debt to them that they will ruin your credit on the way out the door. If you are considering this one at all, talk to agents that have been there and left, not the pitches from their recruiters.
4. Free Leads, Magic Leads, Special Leads- The truth is; All good leads cost money. If you are getting 20-good direct mail leads per week you should be writing at least $3,000 to $4,000 in premium every week. Free Leads are going to be the most expensive leads you ever got. They come with reduced commission contracts and always turn out to be B-leads (previously worked.) The IMOs that sign you up on the reduced contracts won’t release you once you figure out their leads are worthless. In order to succeed, you have to buy leads. They are going to cost you around $30 each for good new, fresh leads no matter what you do. There are no short cuts. Direct mail leads will average $30. Telemarketing leads and Facebook leads are much cheaper but are always less quality than direct mail and less predictable of how many you can get each week AND usually very spread out so it chews up more of your day and your gas driving from one appointment to another. ALL top FE producers use direct mail as the foundation of their business. Some will buy telemarketed leads and Facebook leads as filler.
5. Releases- Most FMOs will never give you a release. That’s the dirty secret in the insurance business. Any up line that will NOT release you is not motivated to do the right things keep you happy. At FexContracting.com we believe that EVERY agent should only be here if this is the best place for him to be. We keep agents by keeping them profitable and happy. Anyone can be released anytime they want as long as the new IMO they are moving to will assume their debt responsibility. Do NOT tie your contracts up with an IMO that will not agree to release you if you want to move elsewhere.
