It's not a scam, but the system is flawed

I worked for United American for just over 2 years. I recently left the company because I found a better opportunity selling insurance for a different company.

As far as your questions go,

Most branches focus on recruiting instead of retention because of the bonus structure. For a branch that is hitting their numbers right, the managers can make a very good living by turning and burning. (By turning and burning, I mean hiring a new person, getting them to 10K of production, which does give the new agent a decent pay check in the mean time, then cutting them free and going on to the next new agent.) This also allows the managers not to have to worry about getting 'charge-backs' because all bonuses can't be charged back.

This is a huge reason for your second question. People leave because they can't cut it and sell well on their own without their manager holding their hand. Many branches have a hand full of studs that keep the branch alive, and most of them are managers.

Home office also sets a lot of the money that the branches get based upon recruiting numbers and 'turning 10K's.' Even if a branch wanted to focus on retention they couldn't because the branch would not have the operating funds that they need. So instead UA uses a cattle call approach. Bring them in; if they have a pulse, offer them a job and let the state licensing program get rid of the bottom of the barrel. Then bring in the rest of them, throw them at the wall as see which ones stick. If you interview enough people you will find at least one stud in the bunch.

Now this next part is completely opinion and I do not know this for a fact, but my personal opinion is that home office needs to have such a high agent turn over. Now you might think that sounds crazy but let's look at the numbers. Let's take a young person buying a normal health policy. Well 30% of each month's premium is agent commission, 10% is unit manager commission, and 15% is branch manager commission. Now we are at 55% in flat commissions. Let's now assume that this is a high producing agent, who produces over 10K each month that adds an additional 9% in manager end of month bonus. $60 per 1000AP goes to the branch lead account on health sales, so 6%. This brings us to 70%. If it was a new agent and the business was goes towards the first 10K produced, about 20% more could be goes to pay the New Agent bonus. Now you have branch operating expense accounts, the Z account, home office operating expenses and underwriting costs. If agents didn't leave left and right, does anyone think that UA could support that kind of payout? Especially when most underage UA plans don't stay on the books much past a year anyway, which removes the renewal year profits. This is another reason I believe that UA's policies are so expensive for what you get. Start throwing claims into the mix and you can get some sizable premium increases from year to year.

As far as your training went, I am truly sorry that your manager used that approach. I personally took about 20 hours of classroom time with each agent, explaining most of the products that they would run into and make sure that they had a good base before they were going out prospecting for clients and so forth.

As far as the policies, if you see something that says they sell themselves, that was true... 3 years ago. In the state of Ohio, where I work the cost of a flexguard, which as you know is UA's bread and butter plan, jumped over 40%. It was easy to sell the policies back then because they were so cheap. Unfortunately, now a flexguard costs about the same as a $2000 deductible major medical plan.

The numbers that most branches use as potential income is just that 'potential' I do personally know an agent who did make 100K in their first year with UA. But honestly he was an exception. The other thing to look at is the numbers are also assuming an agent is there for a full year. Most agents who are not doing well do not make it to the 12 month mark, how could they? They need a paycheck.

All being said for the right person, UA is a great opportunity. In my time with the company I learned so much valuable info and did make a decent amount of money. I will always continue to defend United American and firmly stand by the fact that it was a good company. Even though I am not with the company anymore I will never hold ill will towards UA.

UA's new GAP plans are going to be the future of the company. I hope that they do move to focus branch sales to the GAP plans because they are a product that agents can be truly proud of selling and provide a solution to a great problem in the current health care system.