Do I lose my residual when I become captive with another company?

by Josie
(Como MS)

Will I lose my residual income if I start working as a captive agent for another company?

Comments for Do I lose my residual when I become captive with another company?

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Prospects not written
by: Ted

Yes. If you did not write a policy on them, and they can become new clients, it should pose no problem. If they are existing clients and you want to write new business on them, that should be no problem either. The only problem that would cause you to lose your renewals is if you replace an existing policy from your prior company.This is based on vesting of renewals.

As I mentioned before, if your contract says service fees and not vested renewals, that is a different scenario and your service fees will stop once you leave the company. However, If the company does stop your service fees when you leave and they are substantial I would probably not be replacing any policies.

It is usually in the best interest to leave existing policies in place. Clients will question your credibility if you start changing them. Just tell existing clients that you decided for your future that a change needed to be made and the policy they have is with a good company. However going forward you will be writing your existing clients new policies with your new company.

Again. your agent contract will spell out what will happen when you leave, and without be able to see that contract in detail, this information is based on my past experiences of how renewals work with most companies. As the old saying goes read your agent contract.

Have a Happy and exciting New Year...Ted

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Question
by: Ed R

Should I go after the prospects that I did not close?????

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Residuals
by: Ted

You probably need to read your contract in the area related to termination and residuals or renewals I believe there is a difference between residuals and renewals each company has its own definition. Also you should check to see if there's a section related to vested renewals. Many companies will allow you to keep your renewals if there are vested under the contract. however if you were to go out and cancel and replace one of your policies from the company that you left that would result in the loss of all your vested renewals

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