Newbie in Michigan needs advice

[ptochman]

I am 53 years old, unemployed, and recently received my A&H license from the state of Michigan.

I have an opportunity an as independent contractor with a general agent. It is a small company (owner and one other agent) specializing in Medicare Supplements. I know the other agent and that is how this opportunity came up. She is my son’s girlfriend and that is one cause for concern.

One problem is the contract they want is very restrictive. It has a 2-year no-compete clause upon termination that covers about 1/2 of the state (every county where they have a client). This sounds way too restrictive to me.

The contract states that commission vesting is as follows:

1. No portion of a commission resulting from the renewal of a policy shall vest until contractor has maintained 2 full years of service.

2. Contractor will be fifty percent vested in renewal commissions on renewal premiums paid after the completion of his second year of active service.

3. Such fifty percent vested interest in his renewal commissions shall be the contractor's maximum vesting interest.

My commissions are 70% of the house contract for up to 20 applications a month. Commissions will be 80% for all applications if I exceed 20 applications. Initially they will furnish leads. After a unspecified amount of time, I will have to purchase my own leads most likely from their source.

The agent that I know makes a good living working there. She gave me the information I needed on how to get my license, told me how they get appointments, and the companies they work with. I went on appointments with her a few times to see how to make a sale.

I would like to be independent but I feel an obligation to work with her. She also feels I am obligated to her because I would not have this opportunity without her. She would earn 10% of the house cut of my commissions.

What a mess!

I think I would really like this line of work, especially since I think there is a real need for this product among many seniors.

Any help or advice would be greatly appreciated. Thanks in advance.

Pete

 

[Delta76]

I personally wouldn't mix family and business. Too many opportunities to ruin a relationship.

 

[J.R.]

One problem is the contract they want is very restrictive. It has a 2-year no-compete clause upon termination that covers about 1/2 of the state (every county where they have a client). This sounds way too restrictive to me.

That sounds fair. Ahnuld gave an excellent summary about the non-compete and non-solicit agreement here
When in doubt, spend the $50-$100 and talk with a lawyer about the contract.

The contract states that commission vesting is as follows:

1. No portion of a commission resulting from the renewal of a policy shall vest until contractor has maintained 2 full years of service.

I like this requirement. Keeps people in check.

2. Contractor will be fifty percent vested in renewal commissions on renewal premiums paid after the completion of his second year of active service.

Are renewals retroactive to 1st year once you enter year 3? It sounds like you don't get anything until year 3, but I'm unclear how the commissions work. Ask about this is if you have questions and contact a lawyer for legal advice.

3. Such fifty percent vested interest in his renewal commissions shall be the contractor's maximum vesting interest.

50% of what? I would want numbers to know exactly what 50% represents with the products the agency represents. Street level could be 20%, but the owner may say that you receive 50% of 10%. Have each party sign a non-disclosure statement to ensure confidentiality.

My commissions are 70% of the house contract for up to 20 applications a month. Commissions will be 80% for all applications if I exceed 20 applications. Initially they will furnish leads. After a unspecified amount of time, I will have to purchase my own leads most likely from their source.

How many leads will you get? Per week? Per month? How are they generated? Are they shared? exclusive? What source do they use w/ answers from the aforementioned questions.

I would like to be independent but I feel an obligation to work with her. She also feels I am obligated to her because I would not have this opportunity without her. She would earn 10% of the house cut of my commissions.

There's no point in going independent if you don't have the experience and knowledge.


I do agree/disagree with Delta. The downside is a conflict of interest between you and the girlfriend. They might get married later on and that could complicate issues, as well as the potential for them to break up and you have to deal with it. The upside is that you should get quality training and pay.

 

[Rob Werbrouck]

ptochman,

I am in Michigan as well and was wondering what company did you use for your pre-licensing requirements. Also, when you were done how long did you wait to schedule your state exam?

Also, I agree with not mixing family and business, just from my experience.

Thanks in advance.

 

[sshafran]

I am 53 years old, unemployed, and recently received my A&H license from the state of Michigan.

I have an opportunity an as independent contractor with a general agent. It is a small company (owner and one other agent) specializing in Medicare Supplements. I know the other agent and that is how this opportunity came up. She is my son’s girlfriend and that is one cause for concern.

One problem is the contract they want is very restrictive. It has a 2-year no-compete clause upon termination that covers about 1/2 of the state (every county where they have a client). This sounds way too restrictive to me.

The contract states that commission vesting is as follows:

1. No portion of a commission resulting from the renewal of a policy shall vest until contractor has maintained 2 full years of service.

2. Contractor will be fifty percent vested in renewal commissions on renewal premiums paid after the completion of his second year of active service.

3. Such fifty percent vested interest in his renewal commissions shall be the contractor's maximum vesting interest.

My commissions are 70% of the house contract for up to 20 applications a month. Commissions will be 80% for all applications if I exceed 20 applications. Initially they will furnish leads. After a unspecified amount of time, I will have to purchase my own leads most likely from their source.

The agent that I know makes a good living working there. She gave me the information I needed on how to get my license, told me how they get appointments, and the companies they work with. I went on appointments with her a few times to see how to make a sale.

I would like to be independent but I feel an obligation to work with her. She also feels I am obligated to her because I would not have this opportunity without her. She would earn 10% of the house cut of my commissions.

What a mess!

I think I would really like this line of work, especially since I think there is a real need for this product among many seniors.

Any help or advice would be greatly appreciated. Thanks in advance.

Pete

Where in Michigan are you? I'm slightly south of Detroit.

Good Luck.

 

[medx]

I personally wouldn't mix family and business. Too many opportunities to ruin a relationship.

Very true.
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