How Much Do Final Expense Insurance Agents Make in Thousand Oaks?

How final expense agents are paid

Almost all final expense pay comes from commission. When a policy is issued, the carrier pays the agent a percentage of the first year's premium. The exact percentage is set in the agent's contract with that carrier, and it often passes through an agency or marketing organization that keeps a share.

Many carriers pay that first-year commission as an advance. The agent receives most of a year's commission up front, even though you pay your premium month by month. After the first year, the agent may receive a much smaller renewal commission for as long as the policy stays active.

There is no hourly wage in this model for most agents. An agent who writes few policies, or whose policies lapse, earns little.

What changes how much an agent earns

Two agents selling the same kind of coverage can earn very different amounts. The difference usually comes down to contracts, products and how long the policies last.

The lapse factor matters most to you. If an advanced policy is canceled or stops being paid in the first year, the carrier takes back, or charges back, the unearned part of the commission. That rule gives a careful agent a strong reason to set up a policy you can keep paying.

• Carrier and contract level: each carrier pays its own schedule, and agents at higher contract levels keep a larger share.
• Policy type: level benefit, graded benefit and guaranteed issue plans often pay different commission rates.
• Persistency: policies that stay in force protect the advance and earn renewals. Lapses trigger chargebacks.
• Business costs: independent agents often pay for their own leads, licensing, travel and phone systems out of what they earn.

Does the agent's commission raise what you pay?

In most cases, no. A carrier files its rates, and the premium for a given policy, age, health class and face amount is generally the same no matter which agent writes it. You don't pay a separate fee on top of the premium for the agent's time.

What can raise your cost is the wrong policy. A guaranteed issue plan costs more per dollar of coverage than a level benefit plan you might qualify for. A face amount larger than your actual funeral and final bills means a bigger premium every month for the rest of your life.

The details we check before a final expense policy is issued

A final expense policy is small, but small details decide whether it pays out cleanly. We spend our time on the parts that cause problems years later, because that is where a policy either holds up or falls apart.

Health questions are a good example. Most final expense applications ask a short list of yes or no questions about conditions and medications. An inaccurate answer can let the carrier contest or rescind the policy during the contestability period, which typically runs two years. We go through each question with you slowly so the answers match your records.

• Underwriting fit: we look at whether your health history points to a level benefit plan before settling on a graded or guaranteed issue plan, since a graded plan limits what pays out in the early years.
• Draft date: we set the monthly withdrawal for a day after your Social Security or pension deposit lands, so a payment doesn't bounce and start a lapse.
• Beneficiary wording: we name a primary and a contingent beneficiary with full legal names, so the claim doesn't stall if one person has passed away.
• Replacement: if you already own a policy, California requires a replacement notice, and we compare both side by side before anything existing is dropped.
• Face amount: we size coverage to what final costs in your family actually look like, not to the largest figure you can afford.

Questions worth asking any agent before you sign

You have every right to ask how an agent works. A good agent answers these without getting defensive.

California requires anyone selling life insurance to hold a license from the California Department of Insurance, and you can look up any agent's license status on the department's website before you meet.

• Which carriers can you write with, and why this one for me?
• Is this a level, graded or guaranteed issue policy, and what happens if I pass away in the first two years?
• Will this replace any coverage I already have?
• What day will my premium be drafted, and what happens if I miss one payment?