How Life Insurance Agents ACTUALLY Make Money... (The Brutal Truth)

Alright guys, so real quick, I wanted to make this video for you guys because this is something that's been driving me absolutely crazy and I've seen it been driving other agents crazy and ultimately I just want to like clear this up and explain this for you guys, especially if you're new getting into the business. This is something that's super critical to know right now. Apologies if my audio is a little bit lower quality. I'm about to leave, I'm going to Spain and packed all my stuff up. So my phone is my microphone. So apologies for that. But the message of this video is worth it, so just stick it up. So this is something that you need to realize whenever you're getting into insurance, whenever you're gonna become a new agent is what game are you playing, right? So I'll give you guys an example. Let's say I go out and you know, I'm playing a game with my family and I'm playing the game of Clue, right? If I'm playing Clue.

But my family is playing Scrabble.

And I'm trying to play Scrabble like you would play Clue. It's going to be like a, it's going to be a pretty big mess here, right? Like nothing's going to make sense. I'm going to be, you know, trying to guess who did it and they're going to be trying to spell, you know, hippopotamus with their letters. So nothing's going to make sense, right? And this is kind of a weird example, but when you think about sales and you think about the business you're getting into as the game that you're playing, this all makes sense, right? So for example, let's say I'm getting into selling cars, right? I need to understand how my money is gonna be made and how to like maximize this business and how to play the game the best way possible. So if I'm selling cars, my whole game is sell used cars, right? Used cars. Apologies for my terrible handwriting, but you're just gonna have to deal with it. Used cars, sell them at a markup, get the high upfront commission and then just run and never call the customer again. That's basically the car business, right? And this is the best way to play that game. If I'm selling Medicare, for example, right? Medicare. My whole game is the renewal and the residual, right? Medicare. My game is the residual and actually doesn't look terrible. So my game is the residual, right? It's the money that that comes and repeats and I have to keep my clients on the book. Let's say, for example, you look at a business like Netflix, right? Netflix charges like $14 a month, right? Something like that. I don't know. I don't pay for Netflix. Netflix.

Cool. So Netflix, Netflix charges like $14 a month. When they bring on a customer, they're not expecting to make money, right? They're not expecting to make money on the $14 a month. They're expecting to make money three years down the line. Because nobody ever cancels Netflix. People keep it forever and ever and ever, and it just goes on this infinite loop where they're getting 14 bucks a month. 14 bucks a month. 14 bucks A month, every single freaking month for years and years on end. That is Netflix game, right? So if I'm playing the next the Netflix game, but I'm playing it like I'm selling used cars, there's no money up front in the $14 a month. And I'm gonna fail at this game and I'm gonna do terribly. I'm gonna be like, netflix is a terrible business, right? But if you look at it, obviously, Netflix is not a terrible business because they're a multi billion dollar company. They might even be. I don't think they're a trillion dollar company, but they're like, when people talk about fang stocks, that's Facebook, Amazon, Netflix and Google. And they only make money from this $14 a month, right? So obviously that game works. Now, moving on and looking at life insurance, and again, this is something that I struggled with and I still actively struggle with because it's painful in the present, right? When you're selling life insurance, the way the money works, right? Life insurance. And this is how you play this game, and this is how you don't lose your freaking mind every second of the day. Like I used to is when you're getting your Money, you get 75% up front, right? And I had a mentor show me this last night, and it just changed my whole way of looking at this because it's. It drives you crazy sometimes, right? It's 75% up front, okay? This is not enough money.

It's not enough money. If you're, you know, if you're buying leads, for example, and sometimes like, it's. If you're working hard and you're selling policies, like if you're an agent on our free lead program and you're getting 75% up front, you're like, I thought I was getting a lot more money. Like, this doesn't really make any sense. Why am I only getting, you know, $350. I thought I was gonna get $500, for example, right? And so you're, you're working really, really hard, but you're only getting three quarters of your money. And this is the, everyone knows this, but everyone forgets about this. You're only getting three quarters of your money. So the way that you play this game is you have to front end the first nine months. Because nine, nine of 12, right? This is nine months out of 12 months is the same thing as three out of four, which is the same thing as 75%. So nine, you're getting nine months up front. The last 12 months of your commission come in month 10, 11, and 12. So the whole game with life insurance, right, is the 75% up front. This is the money that you survive on, right? This is the money that you, you know, you pay your bills with. If you're buying leads is money you buy leads with or whatever you're doing, right? This is your, this is your money. You want to make a little bit of money on the 75%. Let's. If you're, you know, paying for stuff, right, if you're doing free leads, this is like, it's a much easier situation. And then what I'm about to show you is just like the cherry on top. So the 75% up front, this is your, your, your day to day money. The 25% on the back end, this is like where you actually make your money, right? The 25% on the back end is where you actually make your money. This is like pure profit. Because when you get this, you've already, you've already, you've already like basically accounted for the 75% being everything you're getting, right? So when you're playing the game of life insurance sales, it's not the short term game. The problem is people come into this industry, new agents, even experienced agents like myself, I have the same exact issue. And they're, they're looking at the day to day money that's coming into their bank account. They're like, I should be getting way more like, where is my money? That's because you're thinking like a used car salesman. You're thinking like somebody that gets all their money up front, right? But the game is to survive for nine months. And then you start to get this 25% from everything that you sold nine months ago. And what happens is the more you sell, the better of an agent. You become the bigger and bigger and bigger. The 25% on the back end comes, right? So today is May 14th. Right. Nine months from now. Oh, God, this is gonna be rough. I'm not terrible at math, but I'm terrible at month math. May. So that'd be. Add three months is November. It'd be like February. So next February, I'm gonna start to actually make money on all the business that we're selling this month. That's when the 25% comes in. So as a business owner or as an agent, I have to be mentally strong enough to last from May to February without really seeing the fruits of my labor. From May until fricking February, that's a nine month delay. Right. But that doesn't mean this business is terrible. It just means that you have to be a special type of mentally strong to take it. Right. And in addition to. Right. So the 75% up front, this is not what you're working for. You're working for the 25% on the back end. That makes the. Makes it all worth it. Right. So with that in mind, the other piece too is the renewal. Right. So you're also going to get a small renewal as long as your client keeps the plan. And this will come after month, month, like 12. Yeah. So after the 12th month, you'll start to get like a small percentage of the policy every year. And this is not a lot, but again, over time, it stacks up and stacks up and stacks up and stacks up. Right. Just like Netflix 14amonth, the renewals stack up and you're also getting the money on the upfront. The other piece too is that when you start to build up a clientele base, you're going to start to get referrals.

Which make your job a lot easier. You're gonna start to get referral. I'm just gonna say referral. No, no double R or extra vowel there. Just referral. You're gonna start to get referrals. You're gonna start to have upsells on your existing clients. And if you can survive the first nine months or call it first year of this business and just go balls to the wall, for lack of a better term.

This 25% that you're going to get on the back end is just going to keep getting bigger and bigger and bigger. Right? So when you're playing the life insurance game, this is the game you have to play. You can't play the Medicare game because the renewal is not that big. You can't play the used car game, you can't play the next Netflix game, and you most definitely can't play, like the real estate agent game, right? Where you're basically, you know, just getting, like a massive commission up front. And it's kind of hard to get chargebacks on real estate because once they sign the contract, they have the house, right? But this, these are all different freaking games. And that's like, I've never seen somebody call it the game, right? But that's essentially what you're playing. You're playing a game, and if you try to play Clue, like you play Scrabble, or if you're trying to. One person is trying to play tic tac toe, and then other person is trying to play, you know, hopscotch, like it's a total. You're going to lose the game, right? So understand the game you're playing. Go into it with the mindset that this is where your money is, your money is there, it's just delayed, right? And also the renewal, the referrals, the upsells, most importantly, this is a get rich, slow business. And the beginning, the first nine months, the first year, is what knocks everybody out because they don't mentally understand what I just showed you guys. So this is a huge tip for new agents, experienced agents, too. If you're, like, struggling with this, I get it. I've been there. But this is the game that we're playing. And so just play this game really well and you'll make a ton of money. So hopefully that was valuable. Subscribe like, and I'll see you guys later.