Payout on LTC Insurance

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Sep 2, 2010 12:04 pm

What do most advisors get paid on LTC policies?  For example, at Jones, we typically get paid 60% of the first year premium, and then it hits our grid (40% ).  So if it was a $6000 annual joint policy, we would get paid 6000x60%x40%=$1440 Net

And what would the payout look like if you were any indy or RIA with an insurance license?  Could you gfo direct to the LTC company and bypass that B/D?

Sep 2, 2010 9:45 pm

If you are an indy and worked directly with the company it would be 60%.  I sold insurance 10 years ago and that's how it worked for us as indie's. 

Sep 2, 2010 9:49 pm

I get 65% of gross to grid, then 85% payout on that. (indie, obviously)

Sep 3, 2010 12:12 pm

So we are about the same, but with a lower grid than indie's.  I used 60% as that is ONE of the carriers.  I think one of them might be 65%, but not sure.  I was just looking at Genworth.

Sep 11, 2010 7:54 pm

I would out source that kind of business for any client that has money. They always get screwed in underwriting and those decisions, well, the buck stops with you. It's not worth the commission to screw the relationship. Let the other guy take the wrap. Don't become a 'cost' to your client for a few dollars. You can hate the enemy with your client on the same side of the table.

Besides that after haircut and grid your firm is screwing you big time. Why not get a working professional relationship with a good insurance guy and use it as a chip for a decent referral.

Sep 11, 2010 8:58 pm

[quote=Gaddock]

I would out source that kind of business for any client that has money. They always get screwed in underwriting and those decisions, well, the buck stops with you. It's not worth the commission to screw the relationship. Let the other guy take the wrap. Don't become a 'cost' to your client for a few dollars. You can hate the enemy with your client on the same side of the table.

Besides that after haircut and grid your firm is screwing you big time. Why not get a working professional relationship with a good insurance guy and use it as a chip for a decent referral.

[/quote]

In what way are they getting screwed in underwriting, and if we are knowledgeable why cant we do just as well in fighting for the client as the pure insurance agent? 

I wrote a policy on a couple two months ago, the husband was rated down to Select, while the wife was preferred. The client got a letter explaining the reason, and i asked him to get a letter from the Dr, to address it. They came back three weeks after the client paid the first years premium and rated him up to Preferred. If you do enough of that business, it adds uip. Write a 58 year old couple with a $300 daily benefit and its abt $3000 NET (for an indie). Do it 10 times a year, and its real money. Being at a wire i could understand that thinking. When i was at a wire i did almost no insurance. Now i am making more of an effort to do that business, it really pays. It also positions you differently to your client.

Sep 11, 2010 10:01 pm

1) If it's working for you rock on!

2) I'm at a 'wire' ? 'bank'? 'wire'? not sure anymore. Whatever it is it's all about fleecing the client regrettably.

IMHO 9 of 10 people feel like they get an adverse decision / rate in underwriting. 18 years of experience has taught me this. I sure could be wrong. It's the same thing for trying to get a client a loan these days, they almost always feel like they are getting f ucked, at least where I currently operate from.

I'm glad it worked well for you. BUT take a client that's a former business owner, notorious for adverse underwriting decisions that gets declined ... was it worth the haircut and grid to have a guy put an underwriting decision on your relationship?

To me ... no way. I want to be the guy that makes him money not the one he has to pay.

Sep 12, 2010 10:23 pm

Wow, the idea of having to run LTC insurance through the grid is new to me.....besides jones guys, are you others who have to run LTC through the grid at wirehouses?

My payout on LTC is 75-80% and no grid.  I wirite my LTC through Mass Mutual and John Hancock.

Nov 16, 2010 9:15 pm

I get paid 50 to 75% (depends on riders and what not) of the first year premium and then get trails around 10% of the premium for the next 10 years.

I work for a fortune 100, leading life an LTC insurance company. I am not an indy. 

hope this helps.

Apr 11, 2011 7:25 am

Well said. I also hope so it will be useful for you. Keep doing well.