Follow along with the video below to see how to install our site as a web app on your home screen.
Note: This feature may not be available in some browsers.
I've never worked for a captive P&C company. But I have worked for captive life companies. 100% chargebacks for first year lapses are not unusual at all in that environment.I was in an interview for an Allstate agency, and the owner told me that I'd have to pay back all commissions, both as earned and advanced, if the client cancelled their policy within 12 months.
Like even if they paid for 8 months and then cancelled, I'd have to pay back the entire 12 months of commission...
I really do not understand what he meant.
How often do people cancel their policies? I don't see how I could guarantee that they stay insured for 12 months. Is there a way around this?
Just keep a percentage out yourself. Maybe 10-20% of your commissions going into a savings account that you don't touch unless you need money because of excessive chargebacks. I'd definitely rather hold the money myself than leave it in the company.Would it be weird of me to tell agencies that I don't want to be paid any commission until the chargeback period is over? Like can they hold my commission until then?
Why would you do that? Are you so afraid that you will spend the money that you can't trust yourself?Would it be weird of me to tell agencies that I don't want to be paid any commission until the chargeback period is over? Like can they hold my commission until then?
It wouldn't. But you're not going to lose 100% of your policies, are you? Here's what you might do: Find out what the average lapse rate is for a first year Allstate agent. Put that percentage of every commission into savings. That should be enough, unless your experience is much worse than average.The advice is great, but I'm not understanding. If I put say 20% in savings, how would that pay for a 100% chargeback?
They aren't going to charge back 100% of your sales you make. Only the ones that quit paying. So probably 10% or less. So if you sell $100,000 and 10% quit paying they will charge back $10,000.The advice is great, but I'm not understanding. If I put say 20% in savings, how would that pay for a 100% chargeback?
You Can't.I don't see how I could guarantee that they stay insured for 12 months. Is there a way around this?