December 09, 2015
The determination of whether insurance leads are tax deductible or not is largely dependent on the type of organization that you work with, how it is structured and who pays for the insurance lead. It is important to keep in mind, only the person paying for the insurance leads is able to take the deduction. If you are paying for the leads and being reimbursed for the price of the insurance lead or insurance call, you are not eligible to take a deduction.
In most insurance offices, producers or agents are compensated as independent contractors. In this type of business relationship, if the producer or agent is purchasing the insurance leads or insurance calls directly from a lead company, then it would be considered a business expense and as such you are able to take a tax deduction, which reduces the amount of money you effectively make by the price of the lead, thereby reducing your tax liability. If the producer or agent is purchasing the lead from the business owner, then it would also be deductible.
If the owner or head agent is purchasing the leads and providing to an independent contractor for free’, the owner or head agent is able to take the deduction. If the owner or head agent, reduces your commission by the amount of the lead, then you are not able to take a separate deduction since you are effectively reducing your revenue or commission by the price of the lead.
If you are an employee of an agency and the owner or head agent is purchasing the lead and charging you for them, you may also be eligible to deduct the price of the leads. If you are an employee and are purchasing additional leads, to help with your sales, and no one is reimbursing you for the price of the lead, you too may be able to deduct the price of the insurance lead. If the owner is purchasing the leads and paying you to contact them, the owner is able to take the deduction.
If you participate in a co-op program or another program sponsored by your carrier, and you are reimbursed for marketing expenses or insurance lead purchases, it is important that you ONLY deduct the amount that you are not reimbursed.
Keeping accurate records of your lead purchases is extremely important to make sure you can take all allowable deductions. You should make sure your insurance lead company or agency owner is providing you with timely and accurate documentation. You should also keep in mind that lead expense deductions can only be taken in the year that you spent the money and received the lead, if you are pre-paying for leads, you may not be eligible to take the expense in the current year (you should consult your tax professional). Without proper documentation of your insurance lead expenses, you put yourself at risk, if you are ever audited.
Whenever you have questions about whether something is tax deductible or not, it is always best to consult the IRS website (https://www.irs.gov/) or a tax professional. You should also contact your state department of revenue, since the rules can vary substantially by state.
December 07, 2015
Hiring a new insurance agent for your office is a very important task, whether you have one or 100 agents working for you. A member of your team can either improve the dynamic and make everyone work harder and smarter or do the opposite. While an interview is a good way to be introduced to a job applicant, it is more critical than ever that you do more to determine if someone has the skills, abilities and work ethic to be a successful member of your team.
Below are five things to evaluate outside of the interview, as you decide who to bring into your office and business. Alone each of these things are a good reason to not hire someone, no matter how well they come recommended or perform in the interview
1. Ability to use technology. In an interview, everyone always says they are “great” with computers, can multitask and are a wiz at picking up new software programs. In many cases, this isn’t true. With some people, they may not even use email on a regular basis. Technology, the internet and mobile is the reality of the insurance industry. You should send an email and text message to your applicant and measure how long it takes for them to reply. Evaluate the grammar and punctuation that they use in the email or text. If someone calls you back rather than replying to the email/text that should be considered a bad sign.
2. Ability to use Social Media and get along with others. Social media platforms such as Facebook, Linkedin, Instagram are a socially acceptable way to interact with friends, family co-workers and others. You should look up a job applicant's social media pages and see what is happening with them. This will give you a good idea about who they are and how they interact publicly with others. While some may say that this is a violation of someone's privacy, the truth is, if they are going to be working for you, you need to know what your clients and the public at large will be seeing. If someone does not have any social media presence, that is also a bad thing, since social media is a great way to reach clients, customers and others.
3. Online and offline reputation. The foundation of the insurance industry is trust and one's reputation is of utmost importance. When evaluating a job candidate, it is important to Google them to see what you can find being said online about them. This will give you a good idea of whether they are someone you are interested in working with. You can also seek out someone they worked with in the past via Linkedin. This is much more effective than asking for references. Who is going to give a reference for someone that isn’t going to say a bunch of glowing platitudes.
4. Aggressiveness or desire for the position. It is essential that a candidate really want the position and go after it. Push the next steps in the application process off on the candidate, tell them, “call me next week if you are interested in talking more”. Tell the candidate that you want a copy of their original license and certifications. Ask the agent to put together a 30 plan for what they are going to do to hit the ground running in the position. It is important that you hire someone who wants the position, not someone just “looking for a job, until something better comes along”. Anything you can do to make the candidate, “work” for the position will allow you to see how badly they want the job. If they don’t do what you ask or do a shoddy job, they will probably do a worse job if you were to hire them.
5. Ability to think and problem solve. Selling insurance is all about matching up your products with the needs of your prospects and clients alike. Sometimes that isn’t simple, as you have to come up with creative solutions or alternatives that might not be easy or that are outside of the norm. The easiest way to measure this is through a series of questions in your 2nd or third interview. You can specifically ask how they would handle a difficult situation that you experienced in the past. You will want to see if they ask questions, if they make assumptions and at least offer up one or more solutions. The solutions offered should be relevant to the situation given and make sense. If they are unable to come up with a solution or it makes no sense, the applicant is probably not someone you want working with you.
Agent Ethan Kosmin Generated over $200,000 in premiums during first year in business thanks to Contact Concierge.
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