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The industry, explained

What is an IMO, and why does it matter to you?

If you are new, the vocabulary of this business is the first wall you hit. IMO, FMO, street level, chargeback, release. None of it is complicated once somebody explains it without trying to sell you at the same time. That is what this page is for.

Start with how insurance actually gets sold

An insurance carrier is very good at a narrow set of things: pricing risk, underwriting applications, holding reserves, and paying claims. What a carrier is generally not built to do is find, license, train, equip, and supervise tens of thousands of individual salespeople spread across fifty states.

So carriers outsource distribution. They set aside a percentage of premium to pay for it, and they hand the job to organizations that specialize in it. Those organizations are IMOs. The commission you earn is not an extra cost bolted onto the client's premium because you were involved. It is the distribution budget the carrier already had, flowing to whoever actually did the work of putting that policy on the books.

What that means for the agent

When you contract through an IMO, you are an independent contractor with your own appointments across multiple carriers. That independence is the whole point, and it shows up in three places:

  • You can actually place your clients. The people who buy final expense insurance frequently have health conditions. One carrier declines a client with congestive heart failure; another has a product built for exactly that. A captive agent loses that sale. An independent agent moves the application.
  • You own the relationship. The client is yours. The book is yours. If you leave, your contracts and your renewals go with you, subject to your release.
  • Your commission level can go up. Contract levels are not fixed forever. Producing consistently is how you raise them.

And the honest downside

Independence cuts both ways. There is no salary, no benefits package handed to you, and no manager assigning you work. If you do not sell, you do not get paid, and nobody is going to come find you. The support an IMO provides is real, but it is support for somebody who is already doing the work, not a substitute for doing it.

The other honest thing to say: IMOs vary enormously. Some are genuinely built to make agents successful, because a successful agent writes business for a decade. Others are built to recruit as many people as possible, take a spread on the ones who happen to work out, and let the rest quietly disappear. The questions further down this page are how you tell the difference.

How you actually get paid

You sell a policy with an annual premium. The carrier pays a first-year commission that is a percentage of that premium, the percentage being your contract level. Most of that first-year commission is advanced to you up front rather than paid as the client pays each month.

That advance is a loan against premium that has not been collected yet. If the client cancels in month four, the unearned portion is charged back to you. In later years, if the policy is still in force, you are paid renewals at a much smaller percentage, which is why agents who have been doing this a long time have income arriving from work they did years ago.

The strategic conclusion falls out of the math: writing business that stays on the books is worth more than writing more business. Selling somebody a policy they cannot afford is not just wrong, it is financially stupid.

Before you sign anywhere

Six questions to ask any IMO. Including us.

We would rather you ask these of everyone you talk to and choose deliberately than sign with us because we were the friendliest phone call you had that week.

What is your release policy, in writing?

The single most important question, and the one most likely to get a vague answer. If the answer is anything other than a clear, written policy, walk. An organization that has to trap agents to keep them is telling you what it is.

Are the contracts in my name, directly with the carrier?

They should be. If your business is written under somebody else's writing number, it is not your business.

Are my renewals vested, and when?

Ask specifically what happens to renewals if you stop producing or leave.

What am I required to buy?

Some organizations require agents to purchase leads on a set schedule, or charge for CRM access, training, or 'system' fees. Ask for every recurring cost up front. Ours: the CRM and the training are included, and lead programs are optional and priced at cost.

What happens in my first 30 days, specifically?

A real answer sounds like a schedule. A bad answer sounds like enthusiasm.

Who, by name, is responsible for training me?

If nobody's name comes back, nobody is.

Vocabulary

The words people will use around you.

Keep this page open for your first month. Nobody is going to stop and explain these on a training call.

Carrier
The insurance company itself, the one that underwrites the policy, collects the premium, and pays the claim. Mutual of Omaha, Americo, Aetna, Corebridge, and so on.
IMO / FMO
Independent (or Field) Marketing Organization. The intermediary between carriers and independent agents: recruits, contracts, trains, and supports agents, and is paid out of the commission the carrier already budgets for distribution. The two terms are used almost interchangeably in this industry.
MGA / GA
Managing General Agency / General Agency. Levels within the distribution hierarchy between the IMO and the writing agent. Mostly relevant to you as rungs on the ladder your contract level sits on.
Captive agent
An agent who can only sell one carrier's products. Often a W-2 employee with a quota, and usually does not own the client relationship.
Appointment
The contract between you and one specific carrier that authorizes you to sell their products. You need a license first, then an appointment per carrier.
Writing number
The producer number a carrier issues you when you are appointed. Every policy you submit to that carrier is tagged with it, and that is how you get paid.
NPN
National Producer Number. The permanent ID assigned to you when your license is first issued. It follows you across states and across your entire career.
Contract level
Your commission percentage with a given carrier, expressed as a level. A higher level means a bigger share of the same sale. Levels can be raised as you produce.
Street level
The commission level a carrier considers standard for an independent agent. A useful reference point when you are comparing what an IMO is offering you.
Advance
Carriers typically pay a portion of the first year's commission up front rather than as the client pays monthly. It is money loaned against premium that has not been collected yet.
Chargeback
When a policy cancels before the advance is earned out, the unearned portion comes back off your account. The direct consequence of writing business that does not stay on the books.
Persistency
The percentage of your business still in force after a given period. Carriers watch it closely, and it affects your standing, your levels, and sometimes whether you keep the appointment at all.
Renewals
Ongoing commission on policies you wrote in prior years, paid as the client keeps paying. The reason a book of business is worth something years after you built it.
Release
Permission from your current IMO to move your contracts elsewhere. A restrictive release policy can lock an agent in place for months or years. Always ask about this before you sign anything.
Vesting
Whether your renewals continue to be paid to you after you stop producing or leave. Vested renewals are yours; unvested ones can disappear.

Still unclear on something? The FAQ covers the rest, or just ask us on the call.

Next step

Ask us the hard ones.

Bring the six questions above to the call. If our answers do not satisfy you, you will have learned something useful either way.

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