I need some guidance. How to start

[cjmarka]

Hello all,

Longtime lurker here. I'm at a crossroads in my professional career, and life, and am interested in pursuing a future in the annuity business.

Background:
Currently I'm 50, live in Utah, and work as a Senior Product/Project Manager for a major defense contractor. I feel the corporate ladder world is sucking my life away and wondering if I'm wasting my time and talents for ~$150k/yr (I'm not complaining, I'm very lucky. I just wonder if I can do better). Education level - Masters. Licenses - I have a current and active Life and Health licenses in the state of Utah.

In another life (before 2009) I was in the mortgage protection insurance business, selling mostly F&G and Americo ROP policies, and I also worked in operations and marketing for a decent sized IMO. My father was successful in AL Williams and did well in mortgage protection, but when the market crashed in 2008, he went into retirement. I have a long life of exposure to this industry. But in 2009 I left and went on to other things.

However I still keep interest in this business and I feel it calling back out to me, especially considering the demographic changes and the growth of the annuity industry in general, I feel like I could use some of my prior experience along with my current skills to try this again. But I don't know where to start.

Challenges:
1. I don't have relationships anymore with any IMOs, or anyone. Everyone I knew is gone to other things or lost contact.

2. In 2016 I briefly returned to the business at a friend of mine's request, who convinced me to help him in the FE market, with recruiting. We did some recruiting and sadly, two bad apple agents were fraudulently writing and replacing policies to the tune of $19k and left me with the debt (currently with Prosperity) and so I have a vector (I just learned of this). I think this might prove a challenge in getting the contracts I seek.

3. I can't quit my day job on day 1. My business plan is to do appointments in the afternoons, evenings, Fridays (I'm off), weekends, in person or even better, remote (I know this is a unique challenge), until I get into a groove I am comfortable with.

4. Leads. From my experience I can't trust any of them. I have about $15k to kickoff my business but can't afford to waste any of it unless its vetted.

In summary, I guess I'm hoping to link up with someone trustworthy and legitimate (no BS) who can guide me. I'm more than willing to take reduced commissions if need be, but I'm hoping there's a one-stop place to go who can help guide me.

Sorry for the novel but was hoping to get it all out at once. Many thanks in advance.

-Chris

 

[sman]

First question you have to ask and answer, how long can you live on an income under your current salary (and benefits) without causing issues at home. Can you make more than $150k in this business? Absolutely. Do a lot of agents do it? Absolutely not.

The challenge in this business, whether it's life, health or annuity, is getting in front of enough qualified prospects to make a living. While I do the occasional annuity, it's not my main line of business. I do managed money and Medicare.

I would recommend having a conversation with @Tahoe Ray as he seems to work the annuity side more than most here.

You'll also need to consider the other issues outside of income such as health benefits. Do yourself a favor and go on healthcare.gov and price what health insurance would be for you and the family. This will be an added expense you need to consider. Also, to earn $150k as an independent agent, you will also need to to add the expense of paying the employers portion of Social Security and Medicare. That's an additional 7.65%. I'd venture to guess you will need to earn in the $200k range to match the $150k you earn as an employee when considering benefits and the employer portion of Social Security and Medicare.

I don't say all this to discourage you. I say it so that you will consider the cost of being self-employed.

 

[Allen Trent]

Hello all,

Longtime lurker here. I'm at a crossroads in my professional career, and life, and am interested in pursuing a future in the annuity business.

Background:
Currently I'm 50, live in Utah, and work as a Senior Product/Project Manager for a major defense contractor. I feel the corporate ladder world is sucking my life away and wondering if I'm wasting my time and talents for ~$150k/yr (I'm not complaining, I'm very lucky. I just wonder if I can do better). Education level - Masters. Licenses - I have a current and active Life and Health licenses in the state of Utah.

In another life (before 2009) I was in the mortgage protection insurance business, selling mostly F&G and Americo ROP policies, and I also worked in operations and marketing for a decent sized IMO. My father was successful in AL Williams and did well in mortgage protection, but when the market crashed in 2008, he went into retirement. I have a long life of exposure to this industry. But in 2009 I left and went on to other things.

However I still keep interest in this business and I feel it calling back out to me, especially considering the demographic changes and the growth of the annuity industry in general, I feel like I could use some of my prior experience along with my current skills to try this again. But I don't know where to start.

Challenges:
1. I don't have relationships anymore with any IMOs, or anyone. Everyone I knew is gone to other things or lost contact.

2. In 2016 I briefly returned to the business at a friend of mine's request, who convinced me to help him in the FE market, with recruiting. We did some recruiting and sadly, two bad apple agents were fraudulently writing and replacing policies to the tune of $19k and left me with the debt (currently with Prosperity) and so I have a vector (I just learned of this). I think this might prove a challenge in getting the contracts I seek.

3. I can't quit my day job on day 1. My business plan is to do appointments in the afternoons, evenings, Fridays (I'm off), weekends, in person or even better, remote (I know this is a unique challenge), until I get into a groove I am comfortable with.

4. Leads. From my experience I can't trust any of them. I have about $15k to kickoff my business but can't afford to waste any of it unless its vetted.

In summary, I guess I'm hoping to link up with someone trustworthy and legitimate (no BS) who can guide me. I'm more than willing to take reduced commissions if need be, but I'm hoping there's a one-stop place to go who can help guide me.

Sorry for the novel but was hoping to get it all out at once. Many thanks in advance.

-Chris

I would only suggest you consider what it will take to net $150k selling annuity. $150k in your current job with benefits, FICA match, 401k, etc is likely the equivalent of $200k after business expenses paid from selling annuity. Meaning, you will likely need to gross $250k or more in annuity commissions to cover business overhead/leads. If selling a mix of MYGA & index Annuity, you are likely looking at needing to do $8-10M annually in annuity premium ($170k to $200k weekly). Lastly, qualified retirement money these days is much, much more work to get it rolled over from the previous company.

I just caution you as you dont want to run from a current $200k a year equivalent job.

 

[cjmarka]

Thank you Allen, much appreciated. I'm in the exploratory phase right now and these are solid considerations. Thank you

 

[cjmarka]

First question you have to ask and answer, how long can you live on an income under your current salary (and benefits) without causing issues at home. Can you make more than $150k in this business? Absolutely. Do a lot of agents do it? Absolutely not.

The challenge in this business, whether it's life, health or annuity, is getting in front of enough qualified prospects to make a living. While I do the occasional annuity, it's not my main line of business. I do managed money and Medicare.

I would recommend having a conversation with @Tahoe Ray as he seems to work the annuity side more than most here.

You'll also need to consider the other issues outside of income such as health benefits. Do yourself a favor and go on healthcare.gov and price what health insurance would be for you and the family. This will be an added expense you need to consider. Also, to earn $150k as an independent agent, you will also need to to add the expense of paying the employers portion of Social Security and Medicare. That's an additional 7.65%. I'd venture to guess you will need to earn in the $200k range to match the $150k you earn as an employee when considering benefits and the employer portion of Social Security and Medicare.

I don't say all this to discourage you. I say it so that you will consider the cost of being self-employed.

Pretty much right on the money of my guesstimates, too. I appreciate the feedback and I'll reach out to Tahoe Ray - thanks for the tip

 

[sman]

I would only suggest you consider what it will take to net $150k selling annuity. $150k in your current job with benefits, FICA match, 401k, etc is likely the equivalent of $200k after business expenses paid from selling annuity. Meaning, you will likely need to gross $250k or more in annuity commissions to cover business overhead/leads. If selling a mix of MYGA & index Annuity, you are likely looking at needing to do $8-10M annually in annuity premium ($170k to $200k weekly). Lastly, qualified retirement money these days is much, much more work to get it rolled over from the previous company.

I just caution you as you dont want to run from a current $200k a year equivalent job.

Many people don't count the cost of being self-employed. I mean, I get it, being an employee can suck. But earning a $150k salary as an employee is not the same as grossing $150k in commission as a self-employed person.

I can say with some high certainty, if I were earning $150k in a J-O-B when I began my insurance career, I likely would have never started in the insurance business. Fortunately that wasn't the case and now I have a very nice income with lots of free time to do other things. Not much going on today so I cut grass after lunch. Playing golf tomorrow and Wednesday. But I put in the hours, especially in the Fall, so I can take reap the rewards this time of year. No way I could do all of those things if I worked a regular 9 to 5.

 

[cjmarka]

I should add that I'd be happy keeping my job and spending my extra time writing business for extra income as well. Not sure if you think that's realistic but I'd love to hear it

 

[sman]

I should add that I'd be happy keeping my job and spending my extra time writing business for extra income as well. Not sure if you think that's realistic but I'd love to hear it

Definitely realistic if you can commit the time required. Keep in mind, you are talking about handling people's next eggs. They may need some reassurance that you are there if any questions come up. The beauty of the MYGA and Index annuity business is you don't have to worry about clients losing money in market downturns which would/should limit the frantic phone calls. You just need to figure out how you will gain clients as that is the lifeblood of this business.

 

[scagnt83]

That is a tough level to replace in a quick manner.

However, with the right marketing plan and the right method with clients, it is possible in a few years.

It helps to be multifaceted to make it. "Selling Annuities" is tough if you want that kind of income. Especially if MYGAs are in the mix.

You would be well advised to get your Series 65. Or at least find an Advisor you trust to help work with clients.

Usually, no more than 50% of a portfolio is going into Annuities. You are leaving money on the table and competition in our own house.

Also, these clients need planning. Along with Life Insurance & LTC Insurance. Their grandkids need life insurance. Their adult children are probably underinsured for both Life and DI.

Dont think of it as a single client.

Think of it as a Household and Family Unit.
You gain the assets.
You sell the annuity.
You sell the LTCI. (often funded with a portion of the assets)
You sell the GUL or WL.

Then you sell them Grandkid policies using WL. Which introduces you to the adult children of your Annuity client. Then you sell them Life/DI. And maybe even get some AUM from them.

That could be a $50k in revenue household over 12 months if worked properly. With $5k-$10k in recurring revenue each year.

Dont ask me how to do it. Team up with someone who already does it. Find a mentor. Bring them in to work the case from the very first meeting. Give them 40%-50% for doing so. That is the cost of your education. After 12 months you dont need them aside from backroom support.

 

[cjmarka]

That is a tough level to replace in a quick manner.

However, with the right marketing plan and the right method with clients, it is possible in a few years.

It helps to be multifaceted to make it. "Selling Annuities" is tough if you want that kind of income. Especially if MYGAs are in the mix.

You would be well advised to get your Series 65. Or at least find an Advisor you trust to help work with clients.

Usually, no more than 50% of a portfolio is going into Annuities. You are leaving money on the table and competition in our own house.

Also, these clients need planning. Along with Life Insurance & LTC Insurance. Their grandkids need life insurance. Their adult children are probably underinsured for both Life and DI.

Dont think of it as a single client.

Think of it as a Household and Family Unit.
You gain the assets.
You sell the annuity.
You sell the LTCI. (often funded with a portion of the assets)
You sell the GUL or WL.

Then you sell them Grandkid policies using WL. Which introduces you to the adult children of your Annuity client. Then you sell them Life/DI. And maybe even get some AUM from them.

That could be a $50k in revenue household over 12 months if worked properly. With $5k-$10k in recurring revenue each year.

Dont ask me how to do it. Team up with someone who already does it. Find a mentor. Bring them in to work the case from the very first meeting. Give them 40%-50% for doing so. That is the cost of your education. After 12 months you dont need them aside from backroom support.

These are good - I agree. I'll add that I am in no rush and looking at this as a 3yr plan. I don't need to replace my income overnight, or even this year. If in 3 years I am capable, that would be a nice transition.