Release versus Termination
Release versus Termination
Written by Rachel Brammeier
Whether you are changing careers, transitioning from a 1099 to a W-2 employee, or simply believe the grass is greener on the other side, it is crucial to understand the correct terminology and the differences between release and termination.
Release
A release is a document signed by the top of hierarchy and sent to the agent, granting them permission to change hierarchies immediately. Once the agent has the release in hand, they are free to complete a new contract with their new upline. Keep in mind that if the release is not submitted along with new contracting within a set time frame—usually around 30 days—it becomes void, and the agent remains with their original top of hierarchy.
What if my release is not granted?
Should your release not be granted, it’s important to understand your rights with each carrier. Some carriers do not require a release and will allow an agent to move with new contracting. However, this typically involves a waiting period during which no new production can take place.
Other carriers may require a release or a silent transfer before allowing a hierarchy change. A silent transfer occurs after a request to move hierarchies has been submitted. The carrier then observes a waiting period before proceeding with the transfer—without requiring a release from the original top of hierarchy. During a silent transfer, you are generally allowed to write business while you wait.
Termination
Terminations are a helpful option for agents who are changing careers and wish to avoid state appointment fees. A termination can be requested either by the top of hierarchy or by the agent themselves by contacting the carriers directly. If an agent chooses to be terminated and later decides to recontract with a carrier, many carriers will impose a waiting period before the process can begin.
Keep in mind
Contract levels, policyholder ownership, and overwriting amounts may change while you are waiting to move hierarchies or are in the process of requesting a release or termination.
For more information on how uplines can set up their agents, check out our training video, Establishing Your Downline Contracts on our training site, Senior Marketing Specialists University!
Have other questions? Call us today at (800) 689-2800!
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