P&C Vs L&H. Please Help Fill In The Blanks

[Withsomeluck]

Being given back and forth advice on a P&C vs L&H license. Can I get impressions from you all on the differences between them? Perhaps what personality traits within myself might help identify which is better for me? I have heard the first year(s) are often more difficult for P&C financially while building residuals. I've also heard it's more complex and interesring. Whereas breaking into life can be easier as, at the least, some companies offer phone work to cut your teeth on and learn products.

Briefly I live in Southern California. I will be moving to the San Diego area shortly in fact. I have some previous experience with inside sales and outside with leads provided. I realize that the lack of experience w lead generation will be a challenge which I'm already looking at addressing but I am more than willing to take the leap.

Any and all advice including links, personal messages, anecdotal advice etc. Also any advice on how to sort for a good company to work with? If anyone has some spare time and is feeling particularly generous I'd love to pick someone brains over the phone.

Thanks so much in advance
Jeremy

 

[djs]

In short:

Life and health is selling. You have to convince someone that doesn't need something right now that they have to buy it right now. Face it, you can't get life insurance if you know you are going to die in the next 30 minutes (yeah, someone will argue that, but you get my point). You have to sell it as a protection against a future unwanted event..... you will die sometime.

P&C is transactional and people buy it because they have to, not because they want to. Its an easier sale.

But....

L&H pays better per policy written.... a lot better.... well, life does. Health has changed.

P&C pays pretty much squat when you write it, but the renewals keep coming as long as you have them on your books. At some point, you switch from focusing on selling new policies to focusing on your existing clients, which is an awesome time.

But (again).....

L&H is a write it and then check up on it every so often type of thing. People tend not to change their life policies very often, but you do have to stay in touch. Of course, a lot of staying in touch is simply prospecting for new business....

P&C is a service nightmare sometimes. Clients buy cars, sell cars, put drivers on, take drivers off, want to host an event and need an insurance certificate, business owner needs an insurance certificate, someone forgot to pay their bill (again), Billy Joe had his 3 accident this year, Jim Bob got a DUI and needs an SR-22, Sally needs to add her teen age driver and is worried about rates, etc, etc, etc. These are all opportunities, but they require work....

Also:

L&H is pretty much go out on your own, sink or swim by yourself. You can be part of a larger group, but it may not help much.

P&C requires having help. At some point (sooner then you think), you'll need to hire someone to take care of the clients while you prospect. Then you'll need to hire someone to prospect while you manage the agency.

Also, keep in mind, in CA, getting good P&C appointments can be very tough. This can mean you are writing a lot of non-standard business to get started which can pay well, but it is a service 'overhead'. Alternatively, you can check out joining a cluster to get access to carriers like Safeco, travelers, etc.

Dan

 

[Withsomeluck]

Thank you very much for the in-depth response. Absolutely appreciated. I'm leaning toward starting with L&H at this point as I have some leadgeneration ideas that may not work as well with P&C.
Once again thanks so much for the advice


Jeremy

 

[Alston]

I think DJS about nailed it.

I would put Medicare-related policies in the same category as P&C however. Right now Medicare Supplement and Medicare Advantage seem profitable and stable. Other health policies - not so much.

Individual insurance agents fit in different places on the continuum from advisor/consultant (think CPA or corporate lawyer) to a classic sales person (think car salesperson or litigating lawyer who thrives on selling to the jury).

Of course every agent who is successful combines consulting and selling. But there is a difference in the percentages that make up the whole.

If you see yourself as more of a consultant, Medicare (Advantage and Supplement) and/or P&C might be better for you. There is less true selling involved. These are commodities and you are going to speak with people who already know or feel that they need the coverage. They are just looking for the best deal (This doesn't mean just the price and benefits of the policy. Your value as a consultant is part of the deal).

With most other products, you are going to have to convince people that they should buy what you want to sell them. That is a different sales process.

In another words: If you don't sell me an auto insurance policy, I'll buy it from someone else because I know I need it. If you don't sell me a life insurance policy, I might not buy one from anybody.

The other big issue I think about is commissions. Life, DI and most other L&H products tend to pay high first year commissions but very low renewals. P&C and Medicare-related policies tend to pay lower in the first year, but higher renewals.

I think of myself as a consultant and I have enough money on hand to wait for renewals. So I like P&C and Medicare. However, I sold life insurance in the past and the stuff I learned about selling that product makes things easier for me in my chosen markets. Being a trained sales person doesn't hurt no mater what you sell. Even the smartest, nerdiest CPA will get more clients if he or she knows something about the anatomy of a sale.

On the other hand you might be more motivated to "sell." Or you might need or want to hit home runs and see your paycheck spike after you make a big sale. (The last time I had a "regular" job I found getting the exact same pay check each week, not matter how well or poorly I performed, depressing.) There are no big sales in the auto, home and Medicare Supplement/Medicare Advantage markets.

So it boils down to these questions:

Do you like to consult or sell?

Do you want to hit a lot of singles or do you dream of basking in the afterglow of the occasional home run.

There are no wrong answers to these questions, just "to thine own self be true." And also realize that as time goes on your answers to these questions might change.

 

[mr_furly]

Im in the same position as OP...

but isnt it possible to do both?
I find both types of insurance sales fascinating.

 

[Alston]

Of course you can do both. However, factor in how much time you want to spend studying and servicing clients. Some products require much more service work than others. And the more lines you sell, the more you have to study and research.

My new philosophy is more policies from fewer clients. The only way to do that is to sell more than one line of insurance that your typical client wants to buy.

I'll wind up investing more time studying and will need to spend less time creating rapport with new clients and less on marketing and less on gas. At this stage of my career, it makes sense for me.

If you do decide to sell more than one type of insurance, I suggest that you do so with lines that complement each other. For example group health and business liability or auto insurance and life insurance. If the prospects for one are the prospects for the other you can cut your marketing costs and selling time.

Health and dental are not complementary in my opinion. Dental is an ancillary product from a business standpoint since the commissions are about 15% of health commissions.

That's not a compliment. It's an insult! And only worth selling if I'm also going to sell a health insurance policy.

However, you may not want to present yourself as the "for all your insurance needs" agent at least not at first. Get in the door with one product, make the sale, but along the way plant some seeds about the other products you offer.

 

[Heather]

I sold Medicare and some final expense for about 4 years before I opened the agency for P&C. The medicare renewals paid for everything the first year.