Why I believe I have the perfect business model!
I choose to work in the senior insurance market for many reasons. First of all, there is the age triggered Medicare need. Almost all seniors consider age 65 a pivotal turning point in which they need to address their insurance needs. There are 10,000 turning 65 seniors every day in America. They all need help! They will all buy or enroll in some type of insurance program. Translated; a hard-working insurance agent will have many people to “help” by selling Medicare supplements or Medicare advantage products. Many of these sales require no payment from the insured and pay the agent generous level commissions for at least six years.
Before I bore you with information; your success in this market should provide you with a second year income approaching $200,000 (which I will illustrate below). I think you’ll agree that compares favorably to most other professions.
I’m just getting started here. There is generally no medical underwriting for turning 65 seniors and simplified underwriting in many other situations. As a result of poor advice and/or decision making; many of these individuals have no life insurance. The SIMPLIFIED issue, high commission final expense products address this need. In contrast, try getting a $1,000,000 term policy issued. Good luck! The amazing thing is the premiums and commissions are often similar. Perhaps favoring the final expense policy.
Did I mention the potential for 401K rollovers? Yes, it’s there. These are generally lucrative transactions.
There are other products these seniors need. Again, you will find many are simplified issue with what is termed a “Knockout” application. Answer NO to all the questions on the application, have a clean RX/MIB check (these are very liberal) and the policy is often issued
Let me delve further into the Medicare products. They have the benefit of guaranteed issue for turning 65 and simplified issue thereafter. The Medicare advantage policy is guaranteed issue at 65 and has the infamous AEP or “Annual Enrollment Period”. From mid-October to Early December each year there is the AEP or as some refer to it as “Medicare Season”. Seniors are conditioned to make buying decisions at this time. Many agents, after working hard for years, wind down and only work this period each year and are in essence retired for the rest of the year. Perhaps they have a little service work or an occasional referral.
Ok, let me summarize up to this point. Low cost, high commission products. Great opportunity for the big money sales on 401K rollovers or other transferring of assets. Easy issue products. A “Season” when prospects are conditioned to make changes. Hmmmm….. Do I need to go on? OK, I will.
Let me address the power of level commissions. First let’s put this into perspective. There is a big lie in the life insurance business regarding renewals. Many life products have 1-2% renewals. Many, many term policies have zero renewals. Whole life tends to be ok with renewals, but I don’t think it is even a comparison with Medicare products. I’m going to throw some numbers at you from the perspective of a strong producer’s commission potential. Let’s start with 300 Medicare supplement sales in a calendar year duplicated in the following years:
300(sales) x $316(avg commission) = $95,040.00 annual commission
These exact numbers are dependent on many factors such as the geographic area you work and type of plan on which you focus. Regardless, you should end up at these numbers.
Now, suppose the above agent did the same level of production year 2. Of course, this assumes the agent didn’t improve his craft or numbers which doesn’t make sense. But also let’s assume there was a 10% lapse rate (which is a fair percentage to use).
Year two total of commissions and renewal income $185,576.00
We could go to year three but not going to continue this exercise; I think I make my point.
Let’s talk about who we are dealing with. My clients know they need to address their Medicare needs. Once I get past the “Salesman/Prospect” phase of the relationship, I become a very important person to them. It’s sad but not entirely unusual that I often become one of the closest friends for these seniors as they age. Sometimes their kids don’t pay much attention to them and their friends start becoming ill or even worse dying off. I know its morbid, but true. There is a great level of appreciation and fulfillment an agent can derive from this career if they allow themselves to experience it.
FYI – If you have any inkling of being less than 100% honest with these people, stay away. The powers that run this market (Medicare/CMS) don’t tolerate mistakes, either intentional or not. I’ve seen agents have to pay for their client’s mistakes, let alone their own.
There are other great opportunities in this vast business I refer to as the insurance industry. I stake the senior market out as the best option for the following reasons:
Lack of barriers to entry
Sure, if you grew up in the aristocracy of the social classes, you may want to tap into the millions that your sphere of influence offers. For the typical American that wants or needs to go out and carve their own path, look no further than this great market in this great industry.