12 Exit Planning FAQs: Money, Options, Timing, & More
January 30, 2024

Over the last few years, we've helped over 30 agents retire by purchasing their book of business and servicing their customers.

As you can imagine, there are a lot of questions during this time, so we thought we'd round up the most common ones.

Here are 12 common exit planning questions, from money to payment options to timing and more.

Valuation FAQs

The most common questions we get are about the money side of things. How much is my business worth? How do I increase its value? Does it cost to get a valuation?

Let's go over those and provide some clarity.

1. How much is my book of business worth?

In short, your book of business is worth what someone will pay you for it. 

With the help of our partners at Access Capital, we've created a valuation calculator that'll estimate your business' value.

Use the Capital Calculator to Value Your Book of Business Instantly

By entering your monthly renewals by product type, we can give you a ballpark estimate of what we'd pay for your book of business.

If you're seriously interested in retiring, click the banner below to schedule some time on my calendar. I'd be happy to sit down with you and run some numbers.

Schedule your succession planning discovery call

2. What's a realistic valuation for a book of business?

I'd encourage you to read It's Time to Sell Your Insurance Business: What's It Worth?

That article really goes into all the different variables, but for a short answer, insurance books are valued based on your annual gross commission.

When someone says "My book was valued at 1.5x," they mean that their book is valued at 1.5x their annualized gross commission. That multiple can range anywhere from 1x to as high as 2x or even 2.3x.

When you see something around the 1x mark, that's really not a fair valuation. That's not someone who's going to take care of your clients and grow your book of business.

When you see a valuation on the higher side – 2-2.3x – we're talking about a solid block of business with loyal customers and policies in their early years.

You'll also see higher valuations coming from FMOs like us, because we can afford to pay more since we're already invested in your book of business.

3. How do I quickly increase the value of my book of business?

If you have a heavy Medicare Supplement book and you want to sell in the near future, the best thing you can do is refresh your policyholders

When we look at a book of business and a policy is in its first year, the valuation is so much higher than a policy in its 4th year.

When we put a value on your entire book of business, we actually go down to the policy level. Each individual policy is attributed a value, and all of those values together are your total valuation.

So each and every policy you can rewrite makes a difference.

Increase the Value of Your Book of Business: A 4-Point Checklist

Exit Options FAQs

Selling your book of business isn't the only option – so why exactly do we recommend it?

The following FAQs about succession panning and preparing for retirement will shed some light on that.

4. What are most agents doing for their exit plans?

Most agents aren't doing anything at all. I'm not sure if that comes as a surprise or not, but it's the reality of our industry.

The majority of agents plan on letting their business fizzle out. They stop servicing their customers, and they just collect whatever money continues to come in on that book before it completely dies out.

5. What about passing my book of business on to my kids?

Passing your book of business on to your kids isn't a bad idea, but it sure is a scary one.

You'd be counting on your kids to fund your retirement. They probably don't have the money to buy the business outright, so you're trusting them to pay it off over time, which will act as your retirement.

In almost every situation, they have to be the bank, and you're counting and trusting on that individual to maintain and grow the business – and that the market allows them to do that. The market is changing all the time, so there's an element of uncertainty there.

The other huge part of this is whether or not your kids are in the business.

If they're not, you can't just assume they'll leave their career to take over your book. There's a lot that goes into this, like training and licensing.

I'd just guess that only about 10% pass their business on to their kids or other family members. A handful of agents sell their book, and the rest just let it die.

With our model of selling your book of business to us, you know you'll get paid and we do a great job of taking care of your customers.

6. Why should I sell when I can let it fizzle out while still drawing an income from it?

Letting your business slowly die off while you collect the remaining commissions is not only terrible for you, but it's terrible for your customers.

There's no guarantee that another agent won't swoop in when they find out you're done trying. They'll pick off your clients until you have none left. That'll happen faster than you probably think.

In most payout scenarios, when you sell your book of business, you know you're going to be paid for it whether that business sticks or not.

Agents who think doing nothing is better than selling their book likely haven't thought it through.

7. Who buys an insurance business anyway?

So, who buys an insurance business? Here are the three most common entities:

  • Companies who want a quick dollar: a lot of companies buy a book of business and just let it run off. They find an agent in dire straits, they only pay them 1x, and they just let the book run. They don't service it or try to grow it – they just want to end up on the right side of their investment.
  • Other independent agents: if I were a young agent and knew this was going to be my career, I'd be looking to buy someone else's book of business. It's a great way to grow your business. In most cases, you don't have to buy the book as a lump sum as most people want to be paid over time. And if it's someone who's local and has clients in your area, it's a beautiful fit.
  • FMOs: an FMO is a great fit, and I'll explain more in the next section. We've bought over 30 books of business in the last few years, and it has been a great way to help agents while also growing our business. 

Selling to Your FMO FAQs

Selling your book of business to your FMO is a great way to get top dollar for your years of hard work.

Here are some questions and answers to better explain why you should reach out to your FMO when exit planning.

8. Why should I sell to my FMO?

Buying your book is really in the best interest of your FMO, because they're making a small percentage on your business already, and they don't want to lose that business.

Advantages of selling your book of business to an FMO include:

  • Higher valuation – an FMO can afford to pay more for your book
  • Resources in place – an FMO has resources and staff in place to take great care of your clients
  • Proven track record – it's easier for your clients to trust an FMO because there's a proven track record there
  • Easier transition – your FMO already has great relationships with your carriers

9. Why are you interested in buying books of business?

Here at New Horizons, we want to keep growing, and we also want to conserve as much business as we can.

We've found that buying books of business from agents not only helps them retire, but it has helped us grow our business as well.

I also want to point out that it doesn't matter if you want to retire now or in the next few years. If it's on your mind, let's get a discussion going now so you have an idea of what to expect.

You don't want to be in a position where you have to sell without any planning because you got a bad report from the doctor. You shouldn't have to deal with it then. You should be with your family doing what's important.

Most sales people are procrastinators, myself included. So I'd just encourage you to get ahead of this.

10. How do you pay for books of business?

We've bought about 30 books of business over the last few years, and here's how we are currently paying for an agent's book of business.

We come to an agreement on the value, and we give two payout choices:

  1. We give you 80% upfront and hold the remaining 20% back for a period of time, typically 6-12 months.
  2. We pay you over a period of time, the most common length being over three years.

In the first scenario, the reason we hold the 20% back is to ensure the seller doesn't violate the contract. An example of that would be if the agent got re-contracted and started moving their customers back to them.

And when it comes to paying over time, some agents like spreading out those payments for tax purposes. A big part of that is the Part B premium.

Taking all of the money upfront can drive your Part B premium to the maximum adjustment, and a lot of people don't want to do that.

Timing FAQs

Timing is important when you're thinking about selling your book of business.

Here are a couple of questions and answers about how to know when it's the right time to start the discussion. 

More on this subject here: How to Know When It's Time to Sell Your Insurance Business

11. How do you know it's the right time to consider retiring from insurance?

It's different for everyone, but there are three scenarios that are the most common.

You're Losing Income

It's a sure sign when your book starts going backwards.

When you lose more than you bring in, it tells you you're losing the passion for it. You're not giving it the attention you did a few years back.

A Life Event Happens

Another reason is something happens in life that triggers the desire to be done.

I know so many people who have no plans of retiring, and then something happens. You get sick, a family member passes away... whatever it might be. A bell just goes off. You realize you're ready to be done, and you can't get out quick enough.

It's also different for everyone. I'm in my 60s, and I think that as long as I feel like I'm being productive and am contributing, I want to keep working.

Technology and Compliance

Another really common feeling is technology and new compliance regulations are overwhelming – particularly for most agents my age. We really don't like it. You feel like you just can't keep up.

With the new compliance rules, you almost need technology in order to stay compliant. And it's only headed more in that direction.

In the last year or two, a lot of the agents that have sold their book to us have said they just don't want to keep up with the compliance changes anymore.

12. What happens if I die and never had a succession plan?

Most men die before their wives do, and most agents are men. You want to be sure that what you’ve worked for will pass on to your family – and you want a good valuation for your business. You don’t want to just lose it all.

Having a plan in place will ensure that all these years of hard work can be passed on to your loved ones.


We're on a mission to help agents figure out an exit plan, so please don't hesitate to schedule a call with me.

You can book a time right on my calendar here: Book a Discovery Call Now

There is absolutely zero pressure – it's just a conversation where I can learn more about your book of business and answer any questions you have.

We have an entire library of articles about exit planning – here are some you might like to read next:

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