Understanding IMO, MGA, Commission Structures

[Jib]

Spending the last week reading this forum, I now have a decent understanding how MGA's/IMO's function. Deciding who to go with on the other hand, not so easy.

I've seen 100-130% commission #'s thrown around in many posts; I assume that would be annualized? So if I sold a 1k annual premium with 120% commission, after 12 months my commision would be $1200? (assuming the policy doesn't lapse obviously)

Do all IMO's take care of the paramed, APS, policy issue, etc ?


I appreciate any input

 

[Jerard]

Spending the last week reading this forum, I now have a decent understanding how MGA's/IMO's function. Deciding who to go with on the other hand, not so easy.

I've seen 100-130% commission #'s thrown around in many posts; I assume that would be annualized? So if I sold a 1k annual premium with 120% commission, after 12 months my commision would be $1200? (assuming the policy doesn't lapse obviously)

Do all IMO's take care of the paramed, APS, policy issue, etc ?


I appreciate any input

The formula used to calculate commissions is:

Monthly Premium x 12 * Comm Rate * Advance (If you have it)

So a $75 per month premium at a 120% commission rate with a 6 month advance would be:

(75*12) * 120% * 50% = $540

Now if the policy fee is non-commisionable you'd have to take that away from the annualized ($900). For the balance of that 50% advance companies pay that in different ways. Oxford will pay the rest after the 2nd payment is made by the policy holder. Most will pay it back in 1/12th payments each month after the policy holder has made their payment.

In most cases the insurance company will order the parameds, APS and anything else they need so check your email daily or log into their website. I think some agents order their own but only after a long time being appointed. What concerns me is that you asked if an IMO issues the policy. Only an insurance company can issue policies unless you meant to ask if an IMO mails the policy to you after issue. As far as IMOs go they leave you alone unless you call and have a question or problem you need advice on. It's only polite, however, to not bug them too much if you aren't making any sales for them (and you).

As far as who to go with for an upline. Just keep reading and you'll get an idea of who the good ones are. Sometimes you have to have more than one. For example if your upline doesn't offer a particular company that you may need for a particular client then you'll have to use another one. But I would not contract with a company just for one client but would need for it to fill other voids in the future. I'm also careful not to go off and contract with a company that fills the same need for one I already have.

Hope this helps and most of all, makes sense.

 

[Jib]

The formula used to calculate commissions is:

Monthly Premium x 12 * Comm Rate * Advance (If you have it)

So a $75 per month premium at a 120% commission rate with a 6 month advance would be:

(75*12) * 120% * 50% = $540

Now if the policy fee is non-commisionable you'd have to take that away from the annualized ($900). For the balance of that 50% advance companies pay that in different ways. Oxford will pay the rest after the 2nd payment is made by the policy holder. Most will pay it back in 1/12th payments each month after the policy holder has made their payment.

In most cases the insurance company will order the parameds, APS and anything else they need so check your email daily or log into their website. I think some agents order their own but only after a long time being appointed. What concerns me is that you asked if an IMO issues the policy. Only an insurance company can issue policies unless you meant to ask if an IMO mails the policy to you after issue. As far as IMOs go they leave you alone unless you call and have a question or problem you need advice on. It's only polite, however, to not bug them too much if you aren't making any sales for them (and you).

As far as who to go with for an upline. Just keep reading and you'll get an idea of who the good ones are. Sometimes you have to have more than one. For example if your upline doesn't offer a particular company that you may need for a particular client then you'll have to use another one. But I would not contract with a company just for one client but would need for it to fill other voids in the future. I'm also careful not to go off and contract with a company that fills the same need for one I already have.

Hope this helps and most of all, makes sense.

I understand the carrier issues the policy (been selling life ins for yrs), but wasn't sure if the policy would be mailed to me or direct to Pi.

Yes, thanks, this does help and makes sense. I'll keep reading up on the various IMO's, and some agents have also suggested to join ILIAA

 

[senior-advisor-indiana]

The formula used to calculate commissions is:

Monthly Premium x 12 * Comm Rate * Advance (If you have it)

So a $75 per month premium at a 120% commission rate with a 6 month advance would be:

(75*12) * 120% * 50% = $540

Now if the policy fee is non-commisionable you'd have to take that away from the annualized ($900). For the balance of that 50% advance companies pay that in different ways. Oxford will pay the rest after the 2nd payment is made by the policy holder. Most will pay it back in 1/12th payments each month after the policy holder has made their payment.

In most cases the insurance company will order the parameds, APS and anything else they need so check your email daily or log into their website. I think some agents order their own but only after a long time being appointed. What concerns me is that you asked if an IMO issues the policy. Only an insurance company can issue policies unless you meant to ask if an IMO mails the policy to you after issue. As far as IMOs go they leave you alone unless you call and have a question or problem you need advice on. It's only polite, however, to not bug them too much if you aren't making any sales for them (and you).

As far as who to go with for an upline. Just keep reading and you'll get an idea of who the good ones are. Sometimes you have to have more than one. For example if your upline doesn't offer a particular company that you may need for a particular client then you'll have to use another one. But I would not contract with a company just for one client but would need for it to fill other voids in the future. I'm also careful not to go off and contract with a company that fills the same need for one I already have.

Hope this helps and most of all, makes sense.

Your commission explanation is confusing. Jib had it right the way he posted it minus the policy fee(usually).

 

[lqdirect01]

In most cases the insurance company will order the parameds, APS and anything else they need so check your email daily or log into their website. I think some agents order their own but only after a long time being appointed. What concerns me is that you asked if an IMO issues the policy. Only an insurance company can issue policies unless you meant to ask if an IMO mails the policy to you after issue. As far as IMOs go they leave you alone unless you call and have a question or problem you need advice on. It's only polite, however, to not bug them too much if you aren't making any sales for them (and you).

Many agencies order APS's for cases that are in underwriting. EMSI/ Exam One, Portamedic are inefficient at obtaining records.

Agencies also order records saying that they are the custodian of the records. For example, if the case needs to go to another carrier, then the agency already has the records and can submit a complete file to another carrier. It's more efficient and the agent does not have to wait another 3-6 weeks for the records to show up.

 

[Jerard]

Your commission explanation is confusing. Jib had it right the way he posted it minus the policy fee(usually).

I was going by what he said regarding commissions:

"after 12 months my commission would be $1200?"

I read it to mean that there would be a 12 month wait for any payout. Of course different companies calculate their commissions in different ways.
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Many agencies order APS's for cases that are in underwriting. EMSI/ Exam One, Portamedic are inefficient at obtaining records.

Agencies also order records saying that they are the custodian of the records. For example, if the case needs to go to another carrier, then the agency already has the records and can submit a complete file to another carrier. It's more efficient and the agent does not have to wait another 3-6 weeks for the records to show up.

Really? I didn't know that. That would have helped with a client I wrote with RNA that came back table 12. If I was set up like that I may have saved him some money. He's taking the policy at 18 bucks more and with a declined AD and PW. I was shocked he did but then his wife is a nagger...he probably just wanted to shut her up and didn't care how.