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a lot of new agents don't know how commissions actually work okay ask yourself do you really understand the commission game and how it works and how you can start to actually produce lots of money right like when i was 20 okay we're going to talk about money and commissions and how you can start to no actually be in the know on on how this works when i was 20 literally 20 years old playing basketball taking 21 credit hours a semester right for for college and become a full-time insurance agent and made 117 361 dollars and 13 cents in my first eight months okay here's what i'm thinking about doing and talking talk about commissions we're literally thinking about shooting a video where i get 117 361 and 13 cents from the bank and we have it in a briefcase and we have all this cash sitting on the desk and i talked to you about money if you would like to see that video post in comments below if you want me to go to the bank and rob the vault for 117k okay keep me posted i'd love to see your comments on that okay help me out now if you're new and okay i want to understand how commissions work by the way okay the way this works okay is typically right here's the process right you'll have a lead of someone that has some level of interest in what you're selling okay some level of interest by the way right not every level of interest is the same most people most new agents where they get in trouble is they think a lead equals a sell it does not if equal to sell no one would need you okay so the lead some level of interest some are high some are low then right then it's the agent's job okay to set an appointment to set a phone cell to get in front of that person whatever okay then my phone's probably going off because i got a lead maybe who knows okay the appointment okay then it's your job to get in and make the sell right to make the sale now how that works is once you make a sell the the the prospect or the client in that respect now what they do is they pay what's called a premium right not a premium in that it's a premium product even though it could be okay but they're paying a premium which is the amount of money that they are paying for their policy okay now the way this thing works is i'll move the other side of the board real quick okay the way this thing works is let's just say that you're talking to a prospect and you sell them a hundred dollar a month policy okay unless you say that 100 a month policy let's just say they buy a i don't know so let's just say they're they're uh they're 30 it's a it's a 42 year old mel okay and they buy a 20-year term for 2 million i don't know 2 million bucks okay i'm making it up but you get the idea right i know i don't i pay more than that but i've got like five million dollars of life insurance why because dude the insurance is is is never enough well my way my wife spends money that thing's going quick i can guarantee that and she's 32 it ain't lasting 60 years 5 million boxing lasted anybody 60 years it just ain't okay so 100 bucks a month boom if you take that number times 12 that equals 1200 that's what the client is paying over the first year so if you think about that right 1200 bucks that again is what's called the premium that's the amount of money that the client is premium we call that a premium okay we call it an insurance premium right then you take the 1200 bucks for the first year you take it times your commission rate okay you take it times your commission rate which let's just say for easy math sake let's just say it's 500 okay i'm saying let's just say it's 50 your commission percentage okay is what we'll call it commission percentage and let's just say that you get paid 50 when you sell life insurance policy again some companies pay more sometimes pay less i don't know i'm just educating okay uh so in that case 1200 bucks 1050 is 600 right this is a general example by the way of like the size of a policy i always sold my averages were over 100 bucks a month because you had some big ones right you'll have the thousand dollar a month one you'll add the 500 a month one you add a bunch of two and three hundred dollar a month once you'll have the 12 months once too okay so it'll vary in size let's just say at 600 bucks some companies will then some companies will pay the whole year out up front so then you get 600 most will typically do at what's called a nine month commission advance okay which means 9 divided by 12 is 75 percent so you take 600 times 75 because you only get 9 months up front and i'll explain that in a second 600 times 9 months okay times 75 percent is 450 right so in this example if all this were true i'm not saying it is but if it were you would get 450 that would be direct deposited in your bank account okay right direct deposit your bank account follow me so far okay now if that's the case and you're like well what about the rest of the months i only get nine months up front okay now you get yes you get nine months up front right so you get 450 bucks in this example right off the bat okay great well then there's still the other 150 dollars here that's available and they would pay out this is the first nine months it would pay out in month 10 month 11 and month 12 and they would each pay 50 bucks 50 bucks month 11. once the once the client makes the payment okay now if the client doesn't make it nine months and you were advanced nine months of commission it's kind of like the insurance company is loaning you nine months up front okay now if the client doesn't keep the policy for nine months the company's kind of kind of come back for their money by the way okay so some people that sell as earned right if you're a new agent you need to commission events you just do but just know that if the client does not keep it on the books for nine months they're coming back for some of their money right let's just say the client cancels after three months or after after six let's say the client cancels after six months at six months you still owed three months which means there's still 200 bucks there right like so so you're going to start to think about okay what does that look like there's 150 bucks of commission available there that you would have to give back right so month 12 another 50 bucks okay so you total that up boom that's where the 600 comes in right so 600 bucks is the total first year commission or tfyc in this example okay every company calls it something different right i've heard a bazillion terms okay when i turn it out they called it nfyc net first year commission okay 600 bucks now there's also some renewals to where yes if you if the client keeps paying and you're with a company that pays renewals sometimes term doesn't pay renewals by the way okay it varies by the type of term product types there's simplified issue where there's no pyramid there's fully underwritten where there is a pyramid it just varies greatly okay but follow with me some some companies will pay commissions years two through ten as well okay now very small percentage is very small amounts but it can grow it can accrue okay but if you understand that okay i get paid to do two things okay i get paid as my wife's trying to call me okay i'm trying to help help edges make some money okay can you guys tell her okay there's two things you get paid to sell policies you also get paid to keep clients on the books to retain policies okay client retention customer service etc right if you're like okay i don't know how commissions work for life insurance you do now hey if you love this video you're gonna love okay i got behind the scenes with jordan belford at our conference about how he can help new agents and what he would do if he was you check that video out you have to get them into the habit of dialing or out it's got to be top of the funnel people are scared to dial the phone scan to go to