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- career agent program
- subsidy
- policy premium average amount
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The Farmers Reserve Agent Program
Who do you need to be?
Farmers District Managers prefer to hire regular old Joe off the street. They purposely do not persue agents that have prior experience selling insurance or working with another insurance carrier because the Farmers Agent Program depends heavily upon lack of this knowledge so that they can ingrain the Farmers way of doing business into their new agent and to brain wash them into thinking it is a good program without protest.
Requirements (incomplete list)
- Must already have P&C and Life and Health Licenses (costs about $800 to get)
- You must have a list of 100 friends and family to solicit
- You must sell 40 P&C policies
- You must sell 4 life insurance policies
- You must make 1200 xdates
- Training at District Office
- Complete U4 application for NASD registration
- Pass Series 6 and 63 exams
What will I make in my first year?
Farmers District Managers will give you a range. It isnt a set range becase each district manager conjures their own figure for this. You can also say it is dependent upon the geographical area of the country. But that is less of a truth. They might tell you a range of $40,000 to $100,000 can/will be made in your first year.
What will I really make?
In the Reserve Agent Program, you are to sell 40 policies and 4 life policies (used to be 30/3) to graduate into the Career Agent Program. In the Reserve Agent Program you will not receive what Farmers refers to as Subsidy. The average commission between new business home and auto is about 12%. The average policy premium amount is about $400. The average life policy is about $300 and return is on average 45% So the math works out as follows:
P&C: (400 x 40) x .12 = $1920
Life: (300 x 4) x .45 = $450
Gross earnings: $2370
Whats the Catch?
The Reserve Program runs 3 months. You must sell all 40 Property and Casualty and 4 Life policies within the 90 day timeframe. If you fall short, the first month of policies you sold will drop out of the loop and you have to make up for it. It will likely take you the full 3 months to get the first 40 policies and 4 life sold at a minimum. Once you have done this you can graduate into the Career Agent Program.
Lets look at the numbers again. Divide the numbers into 3 parts to find out what you will make per month:
2370 / 3 = $790
NASD Licensing
You are required to pass your Series 6 and 63 exams at your own expense. The U4 application with NASD costs approximately $400. You must get fingerprint cards that average $30 as well as take classes for the NASD exams which cost about $1200 and 2-6 weeks of study time.
These tests are not easy! In fact they are among the most difficult tests that you will ever take!
Time?
You might be told by the DM that you can continue working at your job while doing this part time. Once you go Career, you must quit your job and do the Farmers Agent thing full time. You will need 2-6 weeks to study for the NASD exams. If you subtract that from the 3 months that you have to also sell 40 P&C and 4 Life, you have very little time to learn the insurance ropes let alone market for it.
Expenses
You will spend time commuting to and from the district office and sitting around burning time trying to figure out what to do. You will also be required to drive out and meet all these potential clients in person or have them come in. You cannot do Farmers business over the phone! In the next 90 days you will make about $790 per month in income. You will still have your house or rent payment, car payment, food, utilities, gas, insurance etc to pay for in addition to $1700 to get the NASD Certs. Lets get an example here of a regular old guy trying to start out in expenses per month:
- Housing: $700
- Phone: $100
- Gas: $170
- Cert (divided by 3): $566
- Car payment: $300
- Insurance: $100
- Marketing: $200
Total: ($2136)
This also does not account for the money it cost you to get your P&C License
So lets add that into the works and here is what you will spend to make it through the Farmers Reserve Agent Program.
($2136x3) + $800 = $7208
Net result
To complete the program in 90 days you must juggle all of the requirements. The hardest of which is the NASD requirements. Second is to figure out how insurance works and to be able to sell it to your "friends and family". You might decide to spend the time separately studying for the NASD exams then sell afterwards, however the problem with that is you will extend the time you are in the Reserve Program and making no money.
So you will make a total of $2370 in commission but you will spend about $7208 in 3 months.
Being a Farmers Insurance Reserve Agent will cost you: $4838
Is it worth it?
Read on and see whats more to come in the: Farmers Career Agent Program
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