Advanced Commissions Versus As Earned

[David Douglas]

I am just now contracting to sell FE and I am not sure how the commission structure works. If I am on a 110% contract and I sell a $50 per month policy, what is the earned commission vs. the advanced commission? My credit is not very good right now, due to some real estate investment "mistakes." Will that affect my commission choices? What is the safest way to go to stay out of hot water, but still have enough cash flow to operate successfully?

Thank you.

 

[WCMason]

I am just now contracting to sell FE and I am not sure how the commission structure works. If I am on a 110% contract and I sell a $50 per month policy, what is the earned commission vs. the advanced commission? My credit is not very good right now, due to some real estate investment "mistakes." Will that affect my commission choices? What is the safest way to go to stay out of hot water, but still have enough cash flow to operate successfully? Thank you.

Multiply 50 x 1.10 to get your monthly as earned amount. Multiply 50 x 1.10 x the number of months you're advanced for the advanced commission.

 

[just some f.e.llow]

I am just now contracting to sell FE and I am not sure how the commission structure works. If I am on a 110% contract and I sell a $50 per month policy, what is the earned commission vs. the advanced commission? My credit is not very good right now, due to some real estate investment "mistakes." Will that affect my commission choices? What is the safest way to go to stay out of hot water, but still have enough cash flow to operate successfully?

Thank you.

Safest bet is to take as small an advance as possible, without sacrificing cash flow.
Buuuut..... When starting, you usually need the full nine month advance to keep you afloat.
My suggestion has always been to take a nine month advance the first three months, then back down to a six month advance (you lose 33% of your immediate income but your can usually survive at that point). After six months at six month advance, your back end commission kicks in, so you can go down to three month advances. After three more months, go down to add earned.

Yes, it's a year long process. But I'd you're in this for the long haul, it only makes sense.
My $ .02. Good luck!

 

[David Douglas]

Thank you for your responses. Do you think i will be able to get advanced commissions with poor credit?

 

[pcbinsurance]

It depends. You may with one carrier and not another.

Poor credit can be anything from bankruptcies to being habitually late on your CC payments. If your credit is poor but you don't have a bankruptcy, you might be okay. It also depends on when you had these credit issues. Over 7 years ago would be in your favor.

 

[David Douglas]

Looks like I'm screwed. I am currently in a Chapter 13 which I had to file to save my home.

 

[pcbinsurance]

I would see if your IMO/FMO can do anything for you.

 

[just some f.e.llow]

Looks like I'm screwed. I am currently in a Chapter 13 which I had to file to save my home.

Personal experience for me has been that with a lot if carriers, my agents with credit issues are either declined for appointment, or they get the 9 month advance.

Again, NOT a hard and fast rule, and some carriers (SNL and Oxford, for example) will give a smaller advance rather than decline, but I've seen since pretty sketchy credit get through fine.
Just gotta contract and see what happens.

 

[David Douglas]

I was a RE/MAX agent in Florida and was very successful. Rode the rocket up, and rode the rocket down. Just trying to get a fresh start. Thanks for all the suggestions and kind support.

 

[pcbinsurance]

Good luck in your new career. Living on the beach here in Panama City Beach, I've seen lots of folks who bought in high (2005-2007) and are still under water.

Things around here are creeping back up though and it's not like they are adding new beach.