Do insurance companies really pay their salespeople all that residual they claim?

Question

I have been interviewed at a few different insurance companies, and they make some pretty outrageous claims. They say that your pay keeps going up the longer you work there because of all the residuals. It seemed a little too good to be true to me. But they seem legit.... huge companies...... great bbb standing.... and any other digging i can find. Anyone had any experience with this kinda thing?

Answer 1

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Answer 2

Sure, they really do pay those residuals.   But only as long as you keep working for them.    But they DON'T tell you, that 95% of the people wash out the first year.

Answer 3

Yes, it is true provided that you are on commission base not salary base.

Answer 4

It is true that agents earn residuals or renewals. The more business you write, and keep on the books, the higher your renewal base will be.

This is where practice of writing "good business" comes into play.

The higher your persistency rate the higher your renewal base will be.

Example:

If you start writing, and over time, build your agency to where the total annualized premium is $500,000, and your renewal commission is 10%, your base would be $50,000. If you are writing property/casualty, and life insurance, it won't take that long to get to that point.

If after a few years, you build your agency to $1,000,000, your base would be $100,000 at 10%.  

You are not going to keep everything you write, but the more you write, the more you keep.

When I first started in the insurance business, I started with a life insurance company. Back then, if you threw a lot of "mud on the wall", some of it would stick. That philosophy doesn't work these days, because companies now pay bonuses based on agency increase and the percentage of persistency.

Property/casualty companies pay bonuses based on production and loss ratios.

Bonuses are paid in addition to your first year commission and your renewal base.

The insurance business is a very lucrative field. But you have to put your clients first, above your production needs. In other words, take care of your customers and they will take care of you.