Mega comes collecting

[Colorado Newbie]

Hello all, I recently got my letter from Mega stating that I owe them roughly $5k. A friend got his letter as well and he owes a whopping $15k.

My question is, how have the rest of you handled this? Were you able to negotiate a lower number or did they force you to pay all of the money?

Any and all help will be most appreciated!

 

[Expat]

Hello all, I recently got my letter from Mega stating that I owe them roughly $5k. A friend got his letter as well and he owes a whopping $15k.
My question is, how have the rest of you handled this? Were you able to negotiate a lower number or did they force you to pay all of the money?
Any and all help will be most appreciated!

Take a look at your last monthly statement. Assuming that most of the business you wrote is still on the books, your residuals should pay off most of that amount. If you are able to pay UGA the $5,000 then they will pay you your monthly residuals. If not they will Vector you for the amount owed. (Vector is the insurance companies' equivalent of a credit bureau).
However, look on the bright side. All of your debt will be charged to your district manager.

 

[STIBROKER]

try asking them to provide evidence of this debt balance.... from the time your first client paid their first premium to the time your last client dropped off and how they came up with this amount.....and did the commissions come from Mega Life.......and to provide you documentation of the checks cut from them to you.....cuz if they paid your GA and he paid you then he has to sue you.......

 

[fostever]

Sti, I owe Shenandoah $440 from my NAA experience. Does my Mananger have to sue me too?

 

[Crabcake Johnny]

You'll have to pay. I was lucky enough to get out early but I know agents who have owed a significant amount and they will chase after you. I have a buddy in NC who owed $8,000 and UGA turned him over to collections - trashed his credit and his phone started ringing every day. They ended up filing for a judgement and he decided to pay.

Regardless of who comes after you the problem is agents don't understand the liability of getting paid on submit nor do they understand how the debt account works.

Although it might be a "wash" - meaning as the deals stay on the books it reduces your liability the agreement signed states that the debt needs to be paid within 30 days of the termination of contract.

Now, UGA has a formula they use to determine if your account is likely to clear on it's own. It's called "formula gain." If you're in formula gain they might not pester you. However, if you're in "formula loss" which means your account won't clear they'll demand the money.

 

[TXINSURANCE]

Just don't take advances and you have no problems.

If you can't survive without advances then you have other issues and might want to decide if this career is right for you.

I can not tell you how much I discourage advances, and it is not to be a jerk it is to point out what people won't admit - IT IS NOT YOUR MONEY!!!

 

[STIBROKER]

no.....I think you owe on that one......see if they will let you write a new case to pay off that case......and really ask for your accounting from NASE .....make sure you have the names of all the people you wrote and and if there is business on the books to pay that off.....if they fail to provide this and turn you over to a collection agency then you tell them that they were unable to back up your request and if the can not provide it to the collection agency will drop the request for collections......

Sti, I owe Shenandoah $440 from my NAA experience. Does my Mananger have to sue me too?

 

[Crabcake Johnny]

Just don't take advances and you have no problems.

If you can't survive without advances then you have other issues and might want to decide if this career is right for you.

I can not tell you how much I discourage advances, and it is not to be a jerk it is to point out what people won't admit - IT IS NOT YOUR MONEY!!!

Depends on how you run your business. Mega has nasty liability with advances since they pay on submit. I'm with you there - NEVER get paid on submit.

Aside from that, when the deal is approved pay me. Pay me the same day if you can. I love advances - have been on them since '04 without a cent of liability. I love 3 cases last year.....3 entire cases. I just don't get charged back for anything.

I sign up almost exclusively business owners who already have a plan and I'm simply lowering their rate. That's 85% of my book of business. I also take my time with them - 2 weeks being the average amount of time it take them to pull the trigger.

Now - ask me if I'd rather have $3,000 next week so I can pay bills and earn interest on the savings or have the carrier earn interest and pay me monthly? Interest free loan? I'll take it.

Actually, where's the advance liability even if you suck? Say 25% of your business blows back, your writing $10,000 a week at 20%.

Ok, so you suck and make $2,000 in advances then $500 blows back. If my math is right you're keeping $1,500 a week. Where's the liability?

I get advanced on Assurant and GR. If Aetna and BX offered advances I'd sign up tomorrow. Also, the longer you're in this game you have renewal income. I have three years of renewals coming in now so there's my "base" safety net of pay.

I encourage everyone to take advances since that's the litmus test. If you have so much business blowing back on you that you incur a negative account there's you sign to leave the industry.

I can't see anyone struggling while using their hard-earned saved money, punching out business and waiting 6 months to start paying bills. Insanity.

 

[J.R.]

100% agreed WITH a caveat. The only "perceived" liability about advances is if a GA/MGA, etc. with a larger work force is liable for commissions and they have unethical agents or ignorant by choice or laziness.

The argument between as-earned vs. advanced is comparable to the BTID debate, but doesn't take into account the time value of money and opportunity cost. Granted we're only talking about months and not years initially, but the argument is sound about using OPM.

Taking John's $10,000 AV per week estimated with a 20% commission leaves an agent with $2000 per week or $104,000 a year before taxes, savings, expenses, etc. One method could be:

20%-30% savings for taxes (individual tax bracket and state taxes impact this number) leaves you with $1400

30% for marketing leaves you with $980.

25% secured (12% of gross) in a separate "save investment account" for chargebacks leaves you with........

$735 left over for business and personal expenses, which can be broken down in more different categories.

After a few years the renewals will given you even more money to dump into marketing and work the same strategy allowing you to get into advanced applications.

I can see the comfort zone of having as-earned, but who in their right mind (if they weren't personally liable as a GA) would give up the chance to obtain an interest free loan with low risk.

 

[STIBROKER]

there is interest on most advances I've seen......

obtain an interest free loan with low risk.