How much should an insurance agency pay commission splits with their licensed agent?

Asked by iLove (2344

) March 11th, 2010

I have been working as a service agent for 2 years with a small firm, only on small and medium group sales and service. I am a licensed FL health, life, and annuity agent. Recently, I attended a sales conference for individual health sales and got very motivated. I brought all the information back to my boss and she was resistant to change and worried that the additional business would hurt our flailing small group clients.

I thought about becoming independent and pursuing leads on my own, as I have the setup for a home business and have previously worked for myself with some success. I am quite sure she picked up on this vibe from me and tentatively asked me to work individual leads on my own time and she would split the commissions with me 65/35 (my part being the lesser). She was adamant that no time during my regular PT week could be spent servicing these new leads.

I did some online searches and from what I have found, this is not a favorable agreement.

I am curious if other insurance agents (in the health and life arena) have similar or better splits with their agency to help me determine what the proper proposal (rebuttal) should be for this arrangement.

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1 Answer

I am in South Africa so our legislative and commission regulations may be different. But for the most part your question is pretty logic based. The Principal member who holds the license can decide on whatever split they want. A lot of principals decide on a smaller split for profit and also to cover risk i.e. you decide to leave and or lapses are present. Plus you could leave and “churn” your business leaving her in a deficit. Your best bet is to follow the FAIS act and become independent that way you do not have to split. But this takes time. So perhaps in the meantime while you are doing this accept the split in order to gain experience, get your ducks in a row and earn extra cash.

You could also seek out another license holder who will offer you a higher split with a chance to grow in the organisation.

Just_Justine (6511

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