I'm just a regular person, not an agent. I've seen mention here that commissions are lower for high-deductible Medigap plans than for regular Medigap plans, and I'm curious why that is. Is it because the premium is lower for, for example, a high-deductible G than it is for a regular G, and the commission is based on the premium, so the commission is therefore lower for the plan that has a lower premium? Or is the commission on a high-deductible plan structured fundamentally differently?
Why are commissions lower for high-deductible Medigap plans?
- Thread starter dabsmith
- Start date
T Sparks
Super Genius
- 207
Profits
Lower premium means less money to go around
Could you expand more on your answer?
Say an agent gets 22% commission. That's a ballpark.
Let's say Plan G is $115 per month - again, ballpark.
- Commission then is $25.30/mo or $303.60 per year.
High-deductible G is $36 per month - again, ballpark.
- Commission then is $7.92 per month or $95.04 per year.
It cost the agent (again, ballpark) $250 in ad spend and overhead to get that new client.
In a year, he'll turn a profit on his Plan G clients.
In 2.5 years he'll be able to buy a McDouble at McDonalds with his Hi-G client profit.
Commissions usually last 6 yrs.
T Sparks
Super Genius
- 207
Financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something.
$250 per client acquisition? Shark Tank would eat you alive. Ha Haven’t spent anything to get a new client for many years. Build that referral base and clients come to you for free.
Scott has a huge base of clients. That said, he’s talking about ballpark figures for the average agent.
HDG does pay crap, as we all know. Any time I write it, clients come to me asking why their friends have zero copays, have dental, vision, etc for free.
Karen, we had this convo when you turned 65 and you adamantly said, no MAPD! Lol
I do get referrals but would love to get more.
Are you referring to a referral base of other businesses - e.g. financial planners, CPAs, etc? I don't get a lot there.
I don't know how many I've written but I do know I did a audit last summer and deleted anyone out of my system that had passed or changed that I was unaware of (there were more that I thought there would be). Came out around 1400 active and paying.
I get spouses and referrals from them.
I was mainly throwing out the $250 as "Cold Marketing CPA." But I don't think $250 is too high, it may even be low. Saw some large agencies giving out numbers around $250-300 as CPA - so... I'll stick by that.
But, again, would love advice on getting referrals from outside the client base. It's an area I've not done well in and should develop.
Not saying this is you but I've also run into agents over the years who are proud that they are "Referral Only" and $0 ad spend and their book is only 385 active....
Current clients do send me a bunch of referrals. Have a P&C agency that I send all home and auto and they send me Medicare and Obamacare. Have a group of 10 financial advisors that don’t do Medicare and I send them all investments and life insurance. Have a group of lawyers that do estate planning that we refer back and forth. Have a beautician that I know well who has sent me dozens over the years. Those people talk as you know.
Have joined different groups and have picked up business from them. Also worked at a couple large companies before I started insurance and a lot of them are turning 65 now.
I haven’t sent a lead card in over 15 years. Have a billboard and ad in phone book is my advertising budget. Aetna pays for both. I add around 100 new every year and lose around 20 or so due to death or call centers lying to clients. I do not work much other then 10/15-12/15. Golfing most days now. 90% of my clients are on MA or Cost Plans so locked out now except T-65. Just my .02.
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