Do brokers make more commission selling Universal Life?
by Guest » Wed Mar 21, 2012 08:51 pm
Do brokers make more in commission selling Universal Life or Whole Life?
Total Comments: 3
Posted: Thu Mar 22, 2012 06:51 am Post Subject:
There are no brokers in life insurance, only agents. Commissions vary with companies and products. Your question is too vague to answer.
Posted: Thu Mar 22, 2012 05:50 pm Post Subject:
Max, that's not 100% accurate. Maybe CA lumps everyone into one category, but there are states that differentiate between brokers and agents.
Though, from an on the surface point of view, the technical difference between a broker and and agent is pretty meaningless to the consumer.
The answer to the OP question is it varies a lot. Base commissions on both products are right around the same. However, the way these are paid is different. Whole Life is based on the base premium where UL is based on the Target Premium. Since target premium varies widely among carriers, it's hard to say which product comes out on top.
On top of this, there are expense allowances that get paid in addition to regular commissions, these are typically paid to those who operate more like brokers in the sense that they do not receive career like benefits from an insurance company. And/or agents who are footing overhead bills that agents housed in an office paid for by an insurance company. Those housed agents do not have the overhead costs. The expense allowance varies extremely widely, but it generally based off the amount of business the agent/broker places with the specific company, and it's rarely the same for every product across the board.
Now, since you used the word "commission" I'll note that expense allowance is not typically factored in as a commission, so we'll go back to the original statement, that they both pay about the same rate.
Posted: Fri Mar 23, 2012 11:55 am Post Subject:
Brokers represent insureds to insurers. Agents represent insurers to insureds.
Brokers can charge insureds for their effort to place business, and can also receive commissions and/or bonuses from insurance companies for the business they place. Agents cannot charge fees for the effort they expend on behalf of an insured that are not included in the premium paid to the insurance company. Agents are compensated only by the insurance company, which may include salary, commissions, and/or bonuses.
All life insurance premiums are paid to insurance companies, not to agents. Property and Casualty premiums may be paid to brokers who, in turn, forward the "net premium" to the insurance company. For this reason, there are no brokers in life insurance.
Posted: Thu Mar 22, 2012 06:51 am Post Subject:
There are no brokers in life insurance, only agents. Commissions vary with companies and products. Your question is too vague to answer.
Posted: Thu Mar 22, 2012 05:50 pm Post Subject:
Max, that's not 100% accurate. Maybe CA lumps everyone into one category, but there are states that differentiate between brokers and agents.
Though, from an on the surface point of view, the technical difference between a broker and and agent is pretty meaningless to the consumer.
The answer to the OP question is it varies a lot. Base commissions on both products are right around the same. However, the way these are paid is different. Whole Life is based on the base premium where UL is based on the Target Premium. Since target premium varies widely among carriers, it's hard to say which product comes out on top.
On top of this, there are expense allowances that get paid in addition to regular commissions, these are typically paid to those who operate more like brokers in the sense that they do not receive career like benefits from an insurance company. And/or agents who are footing overhead bills that agents housed in an office paid for by an insurance company. Those housed agents do not have the overhead costs. The expense allowance varies extremely widely, but it generally based off the amount of business the agent/broker places with the specific company, and it's rarely the same for every product across the board.
Now, since you used the word "commission" I'll note that expense allowance is not typically factored in as a commission, so we'll go back to the original statement, that they both pay about the same rate.
Posted: Fri Mar 23, 2012 11:55 am Post Subject:
Brokers represent insureds to insurers. Agents represent insurers to insureds.
Brokers can charge insureds for their effort to place business, and can also receive commissions and/or bonuses from insurance companies for the business they place. Agents cannot charge fees for the effort they expend on behalf of an insured that are not included in the premium paid to the insurance company. Agents are compensated only by the insurance company, which may include salary, commissions, and/or bonuses.
All life insurance premiums are paid to insurance companies, not to agents. Property and Casualty premiums may be paid to brokers who, in turn, forward the "net premium" to the insurance company. For this reason, there are no brokers in life insurance.
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