Can I get clarification please ...IMO's, commission, and residuals

[DonP]

That’s just not true.

Agents are not getting that across the board.

Anywhere. I’m not getting that and I’m in my 21st year and never not written 300 apps in a year.

I have one contract at 130%. Maybe 1 at 125%?

Only a couple at 120%.

And I almost never write those companies. Well, one at 120% I write quite a bit now.

I don’t know what you get. Not care. But telling agents 120% and more is readily available is just wrong.


And that’s FE. This is not the FE forum.

People certainly aren’t getting those levels on traditional life.

Jd I never lie ever . I’ll send you a few of my contracts . Am am , moo , foresters , prosperity ,Aflac (137%) rna , American memorial ( before they went under ), trans , lumico , all 130% and I do very minimum fe business compared to Medicare . You need to ask Scott for 130% min as he can easily do it . With your production I’d ask for 135% .

 

[DonP]

Who are you using for GI...Corebridge?

I’ll be honest up until recently I was using great western . Now I use Cica for most people . If they have present cancer I use corebridge now . I was using Gtl for Chf but now I use cica. Cica takes 90% of what was Gi before .

 

[jdeasy]

Jd I never lie ever . I’ll send you a few of my contracts . Am am , moo , foresters , prosperity ,Aflac (137%) rna , American memorial ( before they went under ), trans , lumico , all 130% and I do very minimum fe business compared to Medicare . You need to ask Scott for 130% min as he can easily do it . With your production I’d ask for 135% .

I didn’t say you were lying. In fact, I said I didn’t know what contracts you have nor care.

You are claiming that anyone can get those levels. They can’t.

 

[myinsurebiz]

I'm newly licensed (L&H) and new to the insurance industry. I've been speaking with a few IMO's and I've been learning as I go and with the help of this forum.

I would like some clarification on how IMO's make their money and I have some questions as well. Please correct/clarify any information that is incorrect.

I was told that IMO's are essentially a wholesaler for the carrier and make their money directly from their carriers based on what the agent/producer sells.

Does an IMO also make money on the residuals or only the first year? Who sets the commission amounts and residual amounts ... the IMO, the carrier, or both of them together? I was under the impression that the carrier sets the commission and residual amounts for the agent/producer since they're paying the agent/producer directly. However, I'm beginning to question this and it appears that perhaps the IMO sets the commission and residual rates ... is that correct? So, if that's correct, and as an example, if the carrier pays 105% commission but the IMO commission grid states 90% for first year ... does that mean the IMO is getting 15% from the carrier? Does the same apply to residuals?

I have some commission grids that show residuals anywhere from 2.5%-3.65% for years 2-10 residual ... and some pay for 11+ years and some only pay up to year 10, depending on the carrier, of course. However, my hubs has a friend that's an insurance agent and the residuals are higher ... lowest is at about 2.25% for years 11+ and highest is at about 12% for years 2-5 and lower for years 6-10 and lowest for years 11+ but some are still higher at 11+ than some of the commission grids I have. This is a different insurance carrier than the carriers I have commission grids for ... I was just surprised to see the difference is pretty significant.

So, I'm not sure if part of the reason for the difference is how the commission and residual is set by each IMO? Or if going directly through the carrier is the reason? Who sets the commission/residual amounts?

I'd appreciate your feedback to help me understand how this works. Again, I'm new to this industry and still trying to learn.

Why does that matter to you?

 

[myinsurebiz]

People sometimes call it a "pyramid" but it is probably just a "triangle" like in most business models... when you go buy a burger for lunch, a part of that goes to the salary of some executives somewhere, and part of it goes to the franchise owner, and part of it pays the guy who made the sandwich.

"Pyramid" business models typically have a structure where recruiting is the primary means of growing and building a business. These do exist in the insurance space... so the feedback you get on here will help you identify them.

"Triangle" business models, are a hierarchy, with people at the top, often the founder, creating a business, with people under them. The people at these levels above the bottom, are paid a percentage of the total sales commission. You can get a good deal or a bad deal in this model.

The hierarchy in the Insurance biz is the ultimate Pyramid" structure . . .

Has been since the beginning.

 

[GoPokes]

Quick question ... do carriers base commission for IMO's on volume of policies? Meaning, do you as an IMO get a higher amount from the carrier based on how much volume your agency is doing and so then you can offer a higher commission to your agents? So, a smaller IMO that may not have a lot of agents and so wouldn't do as much volume as a larger IMO, would the smaller IMO's get less from the carrier and therefore, pay their agents less commission. Hope what I'm asking makes sense. Thank you.

Not necessarily volume of policies, as much as total premium of policies.

So 1500 policies at $75 per month ($900 Annual Premium) = $1.35M

Or 1300 policies at $100 per month ($1,200 Annual Premium)= $1.56M


The first example has more volume of policies, but the second has less policy volume, and more premiums. The higher commissions typically go to the higher premium, but all companies have limits.

Higher contracts doesnt always mean more money. I have contracts between 120-130, but I havent sold an FE policy in a few years. Im willing to bet JD and most of the other commenters have made more money on FE than I have, at lower contract levels.

There is also value in relationships. 5-10% less on a contract, working with someone who is providing value, might be a worthy investment.

But taking 60% less, might not be. My highest FE contract was 65% for the first 6 years of my career, and most of my leads where cold calling, but I learned a lot, and Im still in the business.

There are a lot of former agents who had big contracts.

 

[Diana2024]

Not necessarily volume of policies, as much as total premium of policies.

So 1500 policies at $75 per month ($900 Annual Premium) = $1.35M

Or 1300 policies at $100 per month ($1,200 Annual Premium)= $1.56M


The first example has more volume of policies, but the second has less policy volume, and more premiums. The higher commissions typically go to the higher premium, but all companies have limits.

Higher contracts doesnt always mean more money. I have contracts between 120-130, but I havent sold an FE policy in a few years. Im willing to bet JD and most of the other commenters have made more money on FE than I have, at lower contract levels.

There is also value in relationships. 5-10% less on a contract, working with someone who is providing value, might be a worthy investment.

But taking 60% less, might not be. My highest FE contract was 65% for the first 6 years of my career, and most of my leads where cold calling, but I learned a lot, and Im still in the business.

There are a lot of former agents who had big contracts.

Thank you for your helpful feedback.