Succession Planning Retirement Solutions

As I approached the time when I thought it would be nice to retire, I discovered a lot about my hard-earned insurance book of business. First and foremost, if I didn’t have a succession plan in place, and happened to die or become incapacitated before handing over my business to someone else, the insurance firms would keep all of my residual income. Yep, none of it would go to my estate.

Major alert—get something in place for my heirs before I was no longer here to make that happen!

I had a small insurance agency specializing in Medicare aged clients. It earned a good income annually just from the residual income. Each year I used mainly referrals and direct mail to bring on new clients, and that ongoing effort replaced any lost income due to the death of my clients or those that got swayed by the Joe Namath and Dyn-O-Mite type television commercials. I was comfortable; however, I was growing old like my client base. It was time to let loose and finally enjoy the fruits of my labor.

Options that I considered

  1. Turn the business over to one of my family members. Sounds easy, but they were not listed as a selling agent on the business already sold, so they would not share in any income from my clients that I had already contracted in the event of my death. And did they share the passion for the business that I had learned to love? No!
  2. Bring aboard an experienced agent and let that individual work the business; but again, my book of business was not transferable unless my existing clients were somehow re-written using the agent that I had brought aboard to run the business.
  3. Do an outright sell of my book of business to a firm that had experience in acquiring small agency businesses, thereby giving up any future income stream and paying taxes on the entire book of business sold, or using a Good Will graduated income stream and stretching my payments over several years rather than receiving a lump sum one-time payment.
  4. Continue on with my agency, but turn the servicing of my clients over to another firm by paying a servicing fee, and at the same time giving this firm full ownership of my agency for a predetermined price in the event of my death.

When you reach my age, and have the above options to consider, the logical approach is normally the fourth option. It would allow me to continue operating my business while the other firm does the necessary service work while getting the clients used to the new service, and simply paying that firm to administer my existing and any future book of business. It also would permit a guaranteed payment to my estate in the event I ever wanted to let go and fully retire. Finding the right firm to do this, and one that you can trust, is the real challenge.

The solution I finally chose was an outright sale of my book of business, payable over several years to control the taxation issue, and at the same time becoming a Licensed Only Agent (LOA) for the acquiring firm. I chose this option after receiving five proposals. It also was my choice when it came to electing a firm that I felt would service my clients with utmost integrity. It offered a solid source of income over the next few years so that I could enjoy my retirement when still able to enjoy the fruits of my labor. And, becoming a LOA meant that I could continue selling new clients and know that any new client would be serviced with the same amount of professionalism that my other clients would be receiving. And, as the LOA, receiving any new client regular sales commissions and renewals on those new clients. Lastly, my estate was guaranteed the monthly income in the event of my death.

New industry challenges
My timing was excellent, as Medicare just announced several new 2022 provisions that can and will impact those of us in this industry. The foremost change is now a requirement that any telephone call to a client or prospective client needs to also be accompanied with a recorded conversation. And that conversation needs to be archived for no less than 10 years!

That new requirement will undoubtedly provide the incentive for many Medicare insurance agents to consider their own succession plan—if not an outright retirement! Sure, there will be agents that will forget, or refuse to do the recorded conversations, or fail to properly secure those conversations for the required 10 years. However, if they ever get audited it could mean forfeiting their residual income, fines, loss of their insurance license or penalties.

No, it is best to plan ahead when it comes to succession of the business. It’s best for you, the agent, your heirs, and certainly is best for your clients. In my case, due to my age, the sale of the business worked best. For other agents, letting a solid service firm work the client base is a great solution as you are not giving up control of your business—only letting another service firm perform the necessary functions to keep your clients informed and satisfied. In doing so, it also frees up your time to focus on obtaining new clients. And, perhaps most importantly for you, it assures your heirs that in the event you become disabled, die, or fail to qualify on your annual certification exams, that all your hard-earned residual income will not vanish.

If you are in a similar situation and are considering your succession options, feel free to contact me. I will give you my experience in more detail and why I made the decision to work with the firm that I eventually selected.

There is an entire addendum type article that can be written on the structuring of any sale, including the valuation of the book of business, what needs to be included in the written succession plan, how payment can be received for the ultimate tax advantage, etc. Those topics will follow.

You owe it to your clients so they are not left dangling when you are no longer around to service their needs. You owe it to your spouse or other family members, as they will lose the income stream of your book of business unless you plan ahead. You owe it to yourself so that you can finally enjoy the fruits of your efforts.

Good luck, and good planning!

is a graduate of Wichita State University with a degree in Business Administration, and then earned his MBA from the University of Arizona. A late bloomer to the insurance world, Dean joined with what was then GE Capital Assurance in Overland Park, KS, as a captive agent selling long term care insurance for Genworth in 1999, and after earning the title of Master Agent, broke free of the captive status and served as a consultant to Personalized Brokerage Services in Topeka, KS, when they were developing their LTC Division. For 10 years Dean managed the Senior Products Division of Forrest T. Jones & Company in Kansas City, MO. While serving in this position he quickly understood the need to guide individuals who needed assistance when they became Medicare eligible. This in turn became the major thrust of the division, and thousands of prospective clients were assisted, primarily members of the Missouri Retired Teachers Association. Dean became widely known as “The Medicare Man” throughout the association of more than 25,000 members.

Dean then formed his own agency, Senior Products Insurance, which is now located in Shawnee, KS, and eventually sold his book of business to a firm in Iowa that specializes in managing and servicing insurance clients on behalf of agents. Dean is licensed to market life and health insurance products in 11 states.

Dean and can be reached at, or at Senior Products Insurance, 15729 W. 62nd St., Shawnee, KS 66217. Telephone and text: 913-909-3749. Email: