Question 1

What's a typical close rate for insurance leads?

Accepted Answer

Highly variable by lead source and agent skill. Internet-shared leads (sold to 3-5 agents): 3-7% close rate is common. Exclusive internet leads: 8-15%. Aged leads (older than 30 days): 1-3%. Live transfers: 15-30%. Direct mail responses: 5-12%. Referrals (your own): 30-50%+. New agents typically run 30-50% below experienced averages until they refine their phone scripts and follow-up cadence. The right benchmark for ROI math: your own historical close rate, not industry averages.

Question 2

What's a sustainable cost-per-lead?

Accepted Answer

Math: max sustainable CPL = (close rate × first-year commission × persistency × target margin). For Medicare Supplement: 7% close × $400 first-year commission × 90% persistency × 50% target margin = max $12-$15 CPL. For ACA: 10% close × $200 commission × 70% persistency × 50% margin = max $7-$8 CPL. For final expense: 5% close × $600 commission × 70% persistency × 50% margin = max $10-$15 CPL. If your CPL is at or above these, you're agency-level pricing and need volume + tight conversion. Below, you have margin to scale or experiment.

Question 3

What is persistency in insurance lead ROI?

Accepted Answer

Persistency = % of policies that stay in force past the chargeback period (typically 9-12 months on first-year). Two impacts on ROI: (1) Chargebacks — if a Medicare Supplement client cancels in month 4, the carrier reverses 8/12 of the first-year commission you received. Low persistency = chargeback risk. (2) Renewals — long-persistency clients pay renewals year after year ($30-$80/year per Medicare client typical), creating compound LTV. Industry average: Medicare 85-92% first-year persistency, Term Life 92-95%, Final Expense 80-85%. Your specific persistency drives your real ROI more than CPL or close rate at scale.

Question 4

How should agents value lifetime renewal commissions?

Accepted Answer

Two approaches: (1) Simple LTV — sum of expected renewals × persistency rate × years. E.g., $50/year renewal × 92% persistency × 5 years = ~$210 LTV. (2) Discounted LTV (DCF) — apply a discount rate (typically 8-12%) to future cash flows. The simple approach is usually fine for tactical decisions like 'should I buy more leads.' DCF matters when valuing your book of business for sale (a 5x earnings multiple on persistent renewal income is common). Most agents underweight renewal income — they buy leads based on first-year commission only, missing that 60-70% of total LTV is in years 2-7 of renewals.

Question 5

What's better: cheap aged leads or expensive fresh leads?

Accepted Answer

Math the ROI on each, don't go on instinct. Example: $25 fresh exclusive lead at 12% close = $208 cost-per-sale. $5 aged lead at 2% close = $250 cost-per-sale. Aged is more expensive on a unit-economics basis despite the lower CPL. BUT — aged works at scale because you can buy 10x volume per dollar; if you have phone-room infrastructure to dial that volume, aged math improves. Fresh exclusive works for solo agents who can't operate a phone room. Match lead type to your operating model — there's no universally right answer.

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