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 Posted: Thu Jun 09, 2011 11:32 pm Post subject: Can you give me an idea how much commission the broker would |
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I need to understand how much a broker makes on a Universal Variable life insurance policy sold to a 79 year old woman who is believed to live until 92. Her premiums are 71K a year.
About how much does the broker make when they sell it and how much would they make if the policy stays in effect? |
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twindg
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Joined: 09 Jun 2011
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| Posted: Fri Jun 10, 2011 1:40 am Post subject: |
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Before you consider the premium, you need to consider the SUITABILITY of a "Variable anything" for a 79 year old person. Both FINRA and state insurance laws hold the agent's licenses at risk of revocation for unsuitable insurance/securities transactions with seniors. The surrender charges/surrender period are some of the biggest concerns of the regulators. There are not that many 79 year olds who would be interested in or capable of paying a $71,000 annual premium for 20-40 years.
Many states or insurance companies now require special suitability questionnaires be completed at the time of presentation/application.
Most variable products are NOT suitable for a person this age unless the individual has significant prior experience as an investor which demonstrates their knowledge of the risks inherent in the contract.
Typical commissions on VUL policies can run to as much as 100% (or more) of the first year (or deposit) premium, plus continuing commissions paid on the sales charge assessed on each additional premium payment in the future. Each company sets its own commission schedule, so there is no specific answer to your question.
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CA-licensed P&C Broker-Agent and Life Agent. CA Insurance Lic #0596197. Now investigating insurance company abuses, and providing litigation support and expert witness services. Send me your questions, and I'll send you my answers. |
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MaxHerr
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| Posted: Fri Jun 10, 2011 5:25 am Post subject: |
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| I guess it's much better to complete such questionnaires beforehand in order to avoid any confusion in the future. It is good if a person who falls in this age-range has prior investment knowledge, but usually they don't have it. |
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roddick
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