Velocity Bonus

Published by Hemati on

There are a lot of questions about the VP Bonus: How does it work? Is it real? When does it pay? We’ll go through how it works in this post.

The first thing to understand is the bonus is NOT paid on your entire IP volume. It is paid on your BONUSABLE premium. Here’s the link so you can break that down for yourself: (FFL has since added Prosperity and Transamerica to the bonus)

So let’s use FFL Velocity’s September numbers here as an example:

They count:
100% of Americo = $1,282,938
+ 75% of Aetna = $380,293
+ 75% of MOO = $545,733
+ 75% of Hancock = $106,036
+ 75% of AMAM = $102,722
+ 75% of Prosperity = $94,153
+ 75% of Transamerica = $68,859
+ 100% of GAFG = $0
+ 2.5% of Athene = $21,227
= $2,601,961 in Bonusable Premium

Next they will check his first (biggest) leg percentage. Even though his biggest leg did 52% of his business, everyone knows Dave is the hardest working man in the business, so he will likely still get to count 100% of that volume. But if they enforced the 50% rule, his Bonusable Premium would drop to $1,925,451.

That leg happens to also be at the 145 comp level so they give him an extra 1% bonus on that volume = $18,067. He has two more legs at 145. 1% on those volumes would be $9,029 and $7,532 for a total kicker of $34,628

If they don’t enforce the 50% rule, his Bonusable Premium of $2,601,961 qualifies for a 5% bonus = $130,098 + the $34,628 kicker = $164,726

If they do enforce the rule, his Bonusable Premium of $1,925,451 would bonus at 4% = $77,018 + $34,628 = $111,646.

That Bonus could also be reduced based on his persistency or by his Americo percentage. Americo was 37% of his total volume, so FFL only has to pay 70% of the bonus = $115,308 or $78,152 depending on which way they enforce the 50% rule.

So this is a great example of how FFL can exercise discretion in how they pay the bonus. The minimum they would pay if they enforced all the rules would be $78,152 – and if they wanted to reward Dave’s effort above and beyond, they could choose to ignore all the reduction guidelines and pay up to $164,726.

The payouts typically arrive in your account two months behind production, so he’ll find out soon enough!

Categories: Training


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