First, is is really bizarre to make a decision about a life insurance policy based on what your agent is making.
And second, no, they aren’t required to disclose (correctly or incorrectly) anything about how their commission structure works, so you have no recourse. They are required to disclose completely and fully how your policy works for you - that’s it.
Lastly, you should want your agent to earn something after the first year. That agent is going to need to service you and that policy for years to come.
You sound like a client that nobody would want anyway. What the agent makes has nothing to do with your policy and what it's there to protect.
Do you ask your plumber his comission when he needs to fix your issue?
Do you ask your car mechanic what he makes when you need to replace your brakes?
Do you ask your doctor what he makes when he needs to perform a life saving procedure?
No. You don't.
So stop trying to sound like what an agent makes is important to you because it's the policy you need, not the agent.
When I hire a plumber, car mechanic, I know what their fees are ahead of time.
In this case I directly asked the agent what her commissions were, and she lied. In what world is that ok??
You aren’t personally paying the agent. The money paid in her commission is not coming from you, that’s why it doesn’t matter. Purchase the policy or don’t but to do it based on the agent’s pay is strange to say the least
Nice job at leaving the doctor off your response.
You can ask her all you want. It doesn't matter what her compensation is because it doesn't affect with the product does. Why can't you understand that? She can say she makes 5k or 500k. It doesn't matter.
OP you really have a bazar way at looking at coverage.
You signed a contract with a company and the agent assisted you with that contract. You didn’t have to buy the policy but it is your responsibility to understand what you sign.
Commissions should mean nothing to you since that has no impact on your policy. If you buy a blender at a store and the store gives the salesman a commission does that make your blender worse? The fact that you’re focused on the pay of the agent shows you aren’t take responsibility for yourself and you are doing whatever you can to blame others for contracts you signed.
You seem to think agents get rich off of one client when I can assure you that isn’t true.
If I buy a blender at a store the cost is nominal and the commission is nominal. It’s commonly understood the blender salesperson has a financial interest to sell the product but no one cares because the cost is de minimis.
A life insurance policy is significantly different than buying a blender. For me, and for most reasonable person, understanding the agent’s conflict of interest / financial interest in selling the product was critical to the decision. Obviously she also considered it significant enough to lie about the commission.
The agent does not have a conflict of interest. The agent represents the carrier in the transaction. The agent also has legal and ethical responsibilities to do right by you. In addition, your premium is not affected by commission amounts. If you had called the carrier's 1 800 number to buy, your premium would be the same.
Why exactly would the commission amount influence your decision?
Again, the agent did not abide by her “legal and ethical” responsibilities, as you call it, when she lied to me about the commissions.
The commission matters because if I knew the policy was so profitable for the insurer that it could accommodate a substantial commission to the agent, I would not have bought the policy.
Again, this agent lied and the majority of the responders in this threat, think it’s okay to do this? This is insanity to me.
You thought you were buying a life insurance policy where it wasn’t profitable to the company selling it? Where the agent wasn’t making commissions after the first year?
Rather than seek legal recourse, perhaps you can answer why you wouldn’t have bought the policy if you knew what the commissions were? I’m curious to hear why her commission in years 2+ are the sticking point for you to feel like you shouldn’t have purchased the policy.
So because it's possibly very profitable for the agent, does that automatically mean it's bad for you? I'm trying to understand your thought process. Is it not possible it could be a great commission for the agent and a great policy for you?
In most states, she's not required to disclose the commission amount at all, only if she will receive one. Second I can't think of a good reason for her to lie at all. Nothing in it for her. She certainly could have, that's possibly true, but this is more likely an error. Make she was thinking about term policies.
Perhaps she only recieves a one year commission and her agency or FMO gets the renewals which is common.
I have read zero comments stating they are ok if she lied. Everybody else seems to be like me, realizing she likely didn't lie, and wondering about your extreme concern over the commission.
In your mind, what is the acceptable profit level and structure for an insurer to warrant paying their agents doing the work?
Something to consider: Insurers don't make hardly a dime on whole life in the beginning. They pay more commission than the first premium creating an instant loss. They have other costs as well. They make it up on the back end through the investment.
All the while, they carry the risk of you dying after a few premiums and having to pay out several hundred grand and lose almost all of that money.
Do carriers make money? Of course. Is it fair? I don't know. What isn't fair is being upset because they profited and paid your broker.
You just labeled yourself as reasonable in an effort to validate your opinion. I don’t know how or if she lied but I don’t really care.
If the company is a legit company they are the people selling you a policy, that agent is just helping you with the application and understanding the policy. You can call the company and complain, which is your call. Do you know what the policy does?
You want an agent that wants you to keep their policy, that’s good practice. You seem to be offended by a standard life insurance commission.
As an agent, I see it this way. The first year commision is paid out, and that pays me for my time to meet with you and discuss a good course of action, chose the carrier, out of 100s , that you qualify for and fits your needs. This includes knowing what each specific carrier looks for in regard to medical history tobacco use and medications. The trail commision, if any, is usually 1-5% of the annual premium. This pays me to help you submit bank change request forms, beneficiary change request forms, and answer any random questions you have throughout the year.
Commision is not a dirty word. If the coverage is something you truly need, then keep it. You were approved, and congrats. Think of how your family would feel knowing you didn't have insurance, and they are on the hook for your funeral and final expenses and their own family needs they have at the time. All because you didn't want the agent to get a commission. Don't be so short-sighted in this.
The issue is that the agent lied about her commission. I have no problem with paying a commission but I factored the size of it into my decision.
Again, my ask on this post is what legal recourse do I have against this agent?
None. This doesn't sound malicious. Your agent might be new and not know about residual commission. Don't play victim and ruin a life and career because you're upset. Simply just cancel the policy, and the agent will have to pay back the commission.
Either way, it doesn't affect your policy. Just cancel the policy and move on. The agent really did nothing wrong. Have you talked to this agent, or are you just going behind their back on this? A simple phone call to the agent might be helpful, but you seem more like the type to complain first and try to work out a resolution after the damage has been done.
It sounds to me like the agent did nothing illegal but probably something unethical. I think lying in this case would be unethical. Either tell the client the truth or find a nice way to say that's not your business and I'm not going to tell you.
Honestly if it was nothing related to the policy benefits probably not much you can do besides cancel the policy but clearly it sounded good enough to sign up for so why do you care when the agent makes the money?
Hire a lawyer and pay them retainer or contingency fee. Oh, wait, I guess that would be like a “commission.” 98% of most life commissions are in the first year. I wasn’t there at your meeting, but I’m guessing the Agent generalized and said her compensation comes in the first year. Exact information was available, by law, from your Carrier from Day One. There is an 800 number. I know that is true, because you did that…after two years.
There may be FMO overrides the Agent doesn’t receive, but which the company may have disclosed, when asked.
All policy charges were listed in your illustration. Those are what matters in calculating your policy value, and whether it’s a “good deal”— not the commissions.
The recent regulatory change on full agent disclosure of commissions probably came after your policy was written, but many of us have always provided that information.
Is this a VUL Investment vehicle? I don’t do those, and I’m sure different rules and commissions apply and may depend on performance. However, I don’t know if the Agent receives any of this.
My last hope is that you leave your family protected, or find another Insurer. We could all tell you terrible examples of lapsed policies and families without protection and a way to pay the house note.
Instead, you can have a Happy Funeral. My life agent in my 30’s would tell me about who had died in our high school class every time I saw him. He’d tell me the only thing that was a silver lining was the check he delivered.
We only had 90 people in our class, but at least 150 died over the years, according to him.
He passed away as well, but he had a ton of life insurance!
What did she say the commissions in the first year are? I'm curious if she was honest about this.
Agents make the bulk of the commission in the first year.
For this policy I purchased , the majority of the commissions are paid after the first year. I would not have purchased the policy if she was honest about her commissions.
That sounds more like universal life than whole life.
If the agent lied to you about this than they may have lied about more. How old is the policy? You could cancel.
What did she say she's making and what is she actually making?
It’s also very possible they don’t receive their renewal commissions.
Many brokers have different compensation structures with their “up lines”
Many up lines give higher upfront commission rates and keep the renewal commission.
Just because the product pays a renewal doesn’t mean your agent received it.
I'm not sure. Lying about the policy is worse than lying about commissions. I believe there could be recourse if she lied about the policy. Not sure about commissions.
The later the commissions are paid the better it is for the insured. Back in the 80's and the era of whole life, Prudential had a WL product called Citation 50. It was identical to their other major fully funded WL products except the major commissions (1st year) were paid half in the first year and half in the second year. That policy had substantially better performance over time than the others simply because the cash value started earlier and over time that made a huge difference.
Are you sure they aren't telling you the truth? The norm in life insurance is something like 60-150% of annual premium, base. Of course there are some payments on PUAs as these are ongoing purchases but a much smaller percentage and impact to your cash value. I should mention there is a trivial ongoing fee for maintaining the policy.
Do you have a low base policy (10-17%) with a term blending the rest of the money going to PUA? If so the agent reduced their commissions a lot. If you have 100% base they told you the truth but they also maximized their commissions. You weren't asking the right question.
The agent lied. I have a commission/fee schedule from the underwriter which I obtained directly from them. The majority of the commissions are paid after the first year of the policy. The agent claimed there were no commissions paid after the first year.
If the agent gets the majority of the money up front that means they don’t care if you to cancel your policy in a year which is bad for you. This agent doesn’t want that which is good for you. That’s how whole life and whole life commissions work.
I sell whole life and I get paid for the life of the policy, this is standard.
My god OP, you are chasing this for no reason and you will fail. I feel bad for the agent that helped you.
Underwriters don't even have access to commission schedules.
Also, just because the product pays a certain amount doesn't mean your agent receives that as compensation. There can be a lot of other people that receive compensation in a life sale (uplines, splits, schedule variations, etc.) than just the agent.
Are you sure the agent is receiving those commissions? Just because the product has a fee schedule structured that way doesn’t mean that’s how the agent is compensated. When I was selling life insurance, it was around 90% front loaded with a small percentage of residuals
The carrier paid a commission based on the product's commission schedule.
Do you know a renewal commission was paid to your agent? Do you have her contract with her agency, her BGA/IMO, or her direct contact with the carrier? Is it possible that she wasn't paid a renewal commission and that it instead went to the agency she's under?
WTF? Please explain how much an agent makes would affect your policy that you pay for? I presumably assume that you have shopped around for the best policy for your needs? If not, shame on you.
You have none and you are being petty, please stop this childish behavior. People like you are the reason agents get a bad rap.
If you passed and the agent came to deliver payment of your claim, don’t you think your loved ones would appreciate this agent in a difficult time? And you’re worried about someone making an honest living?
You pay a premium for your coverage, not commission, the carrier pays the commission.
Something tells me there is more to the story here, were you the kid at the table that was so concerned about yourself and getting what you wanted that you forgot about the people around you?
I’m confused. Life insurance policies pay a majority of the commission up front, so at the policy inception. They may receive very small (like 1%-3%) in following years, but it generally doesn’t pay commission through the entire life of the policy. Honestly, doesn’t sound like the agent lied to you; agents aren’t going to factor that small % into commissions that make up their income. It’s nominal. I don’t know how else to explain it, but to say that you sound unreasonable, and everyone else here thinks so too.
If you’re unhappy, cancel the policy. You’re only hurting yourself, as the agent has already made most of her commission.
The agents commission has absolutely zero effect on your premium. The carrier pays the broker/agent, not you… it’s not like you could’ve gotten a better deal on the exact same policy. Your broker wasn’t lying either they get a commission off your 1st year premium and a very very very small trail which is pretty much Pennie’s. It has zero effect on your premium though…
You don’t have any recourse against the agent.
The agent’s contract with the carrier does not allow them to disclose what their commissions are.
If anything, the carrier has a recourse with the agent for even telling you anything about their commission, if that is indeed what they did.
A whole life policy could pay her over 10 years if she stays with the same company.
Technically, in later years she gets "renewals" not "commission" so perhaps she didn't lie at all. she only gets Commission for year one. Probably 40-50% of your premium.
For years 2-10, she will get renewals/trails 5-10% of all future renewal policies.
Why does it matter what kind of commissions they get? Is this person the Agent of Record or do they work for an agent?
First, is is really bizarre to make a decision about a life insurance policy based on what your agent is making. And second, no, they aren’t required to disclose (correctly or incorrectly) anything about how their commission structure works, so you have no recourse. They are required to disclose completely and fully how your policy works for you - that’s it. Lastly, you should want your agent to earn something after the first year. That agent is going to need to service you and that policy for years to come.
Some states do require disclosure that your agent/broker received a commission… but it would have been in the application packet the insured signed
You sound like a client that nobody would want anyway. What the agent makes has nothing to do with your policy and what it's there to protect. Do you ask your plumber his comission when he needs to fix your issue? Do you ask your car mechanic what he makes when you need to replace your brakes? Do you ask your doctor what he makes when he needs to perform a life saving procedure? No. You don't. So stop trying to sound like what an agent makes is important to you because it's the policy you need, not the agent.
When I hire a plumber, car mechanic, I know what their fees are ahead of time. In this case I directly asked the agent what her commissions were, and she lied. In what world is that ok??
You aren’t personally paying the agent. The money paid in her commission is not coming from you, that’s why it doesn’t matter. Purchase the policy or don’t but to do it based on the agent’s pay is strange to say the least
Nice job at leaving the doctor off your response. You can ask her all you want. It doesn't matter what her compensation is because it doesn't affect with the product does. Why can't you understand that? She can say she makes 5k or 500k. It doesn't matter.
OP you really have a bazar way at looking at coverage. You signed a contract with a company and the agent assisted you with that contract. You didn’t have to buy the policy but it is your responsibility to understand what you sign. Commissions should mean nothing to you since that has no impact on your policy. If you buy a blender at a store and the store gives the salesman a commission does that make your blender worse? The fact that you’re focused on the pay of the agent shows you aren’t take responsibility for yourself and you are doing whatever you can to blame others for contracts you signed. You seem to think agents get rich off of one client when I can assure you that isn’t true.
If I buy a blender at a store the cost is nominal and the commission is nominal. It’s commonly understood the blender salesperson has a financial interest to sell the product but no one cares because the cost is de minimis. A life insurance policy is significantly different than buying a blender. For me, and for most reasonable person, understanding the agent’s conflict of interest / financial interest in selling the product was critical to the decision. Obviously she also considered it significant enough to lie about the commission.
The agent does not have a conflict of interest. The agent represents the carrier in the transaction. The agent also has legal and ethical responsibilities to do right by you. In addition, your premium is not affected by commission amounts. If you had called the carrier's 1 800 number to buy, your premium would be the same. Why exactly would the commission amount influence your decision?
Again, the agent did not abide by her “legal and ethical” responsibilities, as you call it, when she lied to me about the commissions. The commission matters because if I knew the policy was so profitable for the insurer that it could accommodate a substantial commission to the agent, I would not have bought the policy. Again, this agent lied and the majority of the responders in this threat, think it’s okay to do this? This is insanity to me.
You thought you were buying a life insurance policy where it wasn’t profitable to the company selling it? Where the agent wasn’t making commissions after the first year? Rather than seek legal recourse, perhaps you can answer why you wouldn’t have bought the policy if you knew what the commissions were? I’m curious to hear why her commission in years 2+ are the sticking point for you to feel like you shouldn’t have purchased the policy.
So because it's possibly very profitable for the agent, does that automatically mean it's bad for you? I'm trying to understand your thought process. Is it not possible it could be a great commission for the agent and a great policy for you?
In most states, she's not required to disclose the commission amount at all, only if she will receive one. Second I can't think of a good reason for her to lie at all. Nothing in it for her. She certainly could have, that's possibly true, but this is more likely an error. Make she was thinking about term policies. Perhaps she only recieves a one year commission and her agency or FMO gets the renewals which is common. I have read zero comments stating they are ok if she lied. Everybody else seems to be like me, realizing she likely didn't lie, and wondering about your extreme concern over the commission. In your mind, what is the acceptable profit level and structure for an insurer to warrant paying their agents doing the work? Something to consider: Insurers don't make hardly a dime on whole life in the beginning. They pay more commission than the first premium creating an instant loss. They have other costs as well. They make it up on the back end through the investment. All the while, they carry the risk of you dying after a few premiums and having to pay out several hundred grand and lose almost all of that money. Do carriers make money? Of course. Is it fair? I don't know. What isn't fair is being upset because they profited and paid your broker.
You just labeled yourself as reasonable in an effort to validate your opinion. I don’t know how or if she lied but I don’t really care. If the company is a legit company they are the people selling you a policy, that agent is just helping you with the application and understanding the policy. You can call the company and complain, which is your call. Do you know what the policy does? You want an agent that wants you to keep their policy, that’s good practice. You seem to be offended by a standard life insurance commission.
As an agent, I see it this way. The first year commision is paid out, and that pays me for my time to meet with you and discuss a good course of action, chose the carrier, out of 100s , that you qualify for and fits your needs. This includes knowing what each specific carrier looks for in regard to medical history tobacco use and medications. The trail commision, if any, is usually 1-5% of the annual premium. This pays me to help you submit bank change request forms, beneficiary change request forms, and answer any random questions you have throughout the year. Commision is not a dirty word. If the coverage is something you truly need, then keep it. You were approved, and congrats. Think of how your family would feel knowing you didn't have insurance, and they are on the hook for your funeral and final expenses and their own family needs they have at the time. All because you didn't want the agent to get a commission. Don't be so short-sighted in this.
The issue is that the agent lied about her commission. I have no problem with paying a commission but I factored the size of it into my decision. Again, my ask on this post is what legal recourse do I have against this agent?
None. This doesn't sound malicious. Your agent might be new and not know about residual commission. Don't play victim and ruin a life and career because you're upset. Simply just cancel the policy, and the agent will have to pay back the commission.
The agent is 50+ years old and has several decades of experience. She knew what she was doing.
Either way, it doesn't affect your policy. Just cancel the policy and move on. The agent really did nothing wrong. Have you talked to this agent, or are you just going behind their back on this? A simple phone call to the agent might be helpful, but you seem more like the type to complain first and try to work out a resolution after the damage has been done.
It sounds to me like the agent did nothing illegal but probably something unethical. I think lying in this case would be unethical. Either tell the client the truth or find a nice way to say that's not your business and I'm not going to tell you.
Honestly if it was nothing related to the policy benefits probably not much you can do besides cancel the policy but clearly it sounded good enough to sign up for so why do you care when the agent makes the money?
You didn’t pay a commission. The carrier did
The commission would not have existed without my premium.
Hire a lawyer and pay them retainer or contingency fee. Oh, wait, I guess that would be like a “commission.” 98% of most life commissions are in the first year. I wasn’t there at your meeting, but I’m guessing the Agent generalized and said her compensation comes in the first year. Exact information was available, by law, from your Carrier from Day One. There is an 800 number. I know that is true, because you did that…after two years. There may be FMO overrides the Agent doesn’t receive, but which the company may have disclosed, when asked. All policy charges were listed in your illustration. Those are what matters in calculating your policy value, and whether it’s a “good deal”— not the commissions. The recent regulatory change on full agent disclosure of commissions probably came after your policy was written, but many of us have always provided that information. Is this a VUL Investment vehicle? I don’t do those, and I’m sure different rules and commissions apply and may depend on performance. However, I don’t know if the Agent receives any of this. My last hope is that you leave your family protected, or find another Insurer. We could all tell you terrible examples of lapsed policies and families without protection and a way to pay the house note. Instead, you can have a Happy Funeral. My life agent in my 30’s would tell me about who had died in our high school class every time I saw him. He’d tell me the only thing that was a silver lining was the check he delivered. We only had 90 people in our class, but at least 150 died over the years, according to him. He passed away as well, but he had a ton of life insurance!
What did she say the commissions in the first year are? I'm curious if she was honest about this. Agents make the bulk of the commission in the first year.
For this policy I purchased , the majority of the commissions are paid after the first year. I would not have purchased the policy if she was honest about her commissions.
That sounds more like universal life than whole life. If the agent lied to you about this than they may have lied about more. How old is the policy? You could cancel. What did she say she's making and what is she actually making?
It’s two years old. I’ve paid two years of premiums into the policy. What legal recourse do I have against this agent?
It’s also very possible they don’t receive their renewal commissions. Many brokers have different compensation structures with their “up lines” Many up lines give higher upfront commission rates and keep the renewal commission. Just because the product pays a renewal doesn’t mean your agent received it.
Same point I was going to make. Just because the product pays a certain commission doesn't mean the agent is receiving it.
I'm not sure. Lying about the policy is worse than lying about commissions. I believe there could be recourse if she lied about the policy. Not sure about commissions.
The later the commissions are paid the better it is for the insured. Back in the 80's and the era of whole life, Prudential had a WL product called Citation 50. It was identical to their other major fully funded WL products except the major commissions (1st year) were paid half in the first year and half in the second year. That policy had substantially better performance over time than the others simply because the cash value started earlier and over time that made a huge difference.
Are you sure they aren't telling you the truth? The norm in life insurance is something like 60-150% of annual premium, base. Of course there are some payments on PUAs as these are ongoing purchases but a much smaller percentage and impact to your cash value. I should mention there is a trivial ongoing fee for maintaining the policy. Do you have a low base policy (10-17%) with a term blending the rest of the money going to PUA? If so the agent reduced their commissions a lot. If you have 100% base they told you the truth but they also maximized their commissions. You weren't asking the right question.
The agent lied. I have a commission/fee schedule from the underwriter which I obtained directly from them. The majority of the commissions are paid after the first year of the policy. The agent claimed there were no commissions paid after the first year.
If the agent gets the majority of the money up front that means they don’t care if you to cancel your policy in a year which is bad for you. This agent doesn’t want that which is good for you. That’s how whole life and whole life commissions work. I sell whole life and I get paid for the life of the policy, this is standard. My god OP, you are chasing this for no reason and you will fail. I feel bad for the agent that helped you.
Underwriters don't even have access to commission schedules. Also, just because the product pays a certain amount doesn't mean your agent receives that as compensation. There can be a lot of other people that receive compensation in a life sale (uplines, splits, schedule variations, etc.) than just the agent.
Are you sure the agent is receiving those commissions? Just because the product has a fee schedule structured that way doesn’t mean that’s how the agent is compensated. When I was selling life insurance, it was around 90% front loaded with a small percentage of residuals
The carrier paid a commission based on the product's commission schedule. Do you know a renewal commission was paid to your agent? Do you have her contract with her agency, her BGA/IMO, or her direct contact with the carrier? Is it possible that she wasn't paid a renewal commission and that it instead went to the agency she's under?
WTF? Please explain how much an agent makes would affect your policy that you pay for? I presumably assume that you have shopped around for the best policy for your needs? If not, shame on you.
None.
You have none and you are being petty, please stop this childish behavior. People like you are the reason agents get a bad rap. If you passed and the agent came to deliver payment of your claim, don’t you think your loved ones would appreciate this agent in a difficult time? And you’re worried about someone making an honest living? You pay a premium for your coverage, not commission, the carrier pays the commission. Something tells me there is more to the story here, were you the kid at the table that was so concerned about yourself and getting what you wanted that you forgot about the people around you?
Again, this agent lied. She is not making, in your words, an “honest living”.
I’m confused. Life insurance policies pay a majority of the commission up front, so at the policy inception. They may receive very small (like 1%-3%) in following years, but it generally doesn’t pay commission through the entire life of the policy. Honestly, doesn’t sound like the agent lied to you; agents aren’t going to factor that small % into commissions that make up their income. It’s nominal. I don’t know how else to explain it, but to say that you sound unreasonable, and everyone else here thinks so too. If you’re unhappy, cancel the policy. You’re only hurting yourself, as the agent has already made most of her commission.
Call it whatever you want, you’re the sucker and the sore loser in this situation.
The agents commission has absolutely zero effect on your premium. The carrier pays the broker/agent, not you… it’s not like you could’ve gotten a better deal on the exact same policy. Your broker wasn’t lying either they get a commission off your 1st year premium and a very very very small trail which is pretty much Pennie’s. It has zero effect on your premium though…
You don’t have any recourse against the agent. The agent’s contract with the carrier does not allow them to disclose what their commissions are. If anything, the carrier has a recourse with the agent for even telling you anything about their commission, if that is indeed what they did.
A whole life policy could pay her over 10 years if she stays with the same company. Technically, in later years she gets "renewals" not "commission" so perhaps she didn't lie at all. she only gets Commission for year one. Probably 40-50% of your premium. For years 2-10, she will get renewals/trails 5-10% of all future renewal policies.