Do insurance agents make lump commision and residual income on renewals?
March 24th, 2011 | by admin |Trying to see if they get a small % each month a premium is paid or if they get flat rate at start of policy then a smaller % for every renewal date?
If someone sold a standard auto policy 1 auto for 100/300/75 on a average structure what would that yeild in comission? Trying to gage a small say earnings.
5 Responses to “Do insurance agents make lump commision and residual income on renewals?”
By Say Bye on Mar 24, 2011 | Reply
Varies with which company they sell the policy for.
By Grassy on Mar 24, 2011 | Reply
Yes for Life Insurance they receive 55% of first years premium and 10% yearly thereafter typically.
By Monique Sanders on Mar 24, 2011 | Reply
It does depend on the company, however from my experience you get the first year upfront and a small renewal every year after that. Be careful of reversals, that is when some cancels the policy before the end of first year. Reversals can kill your career. Make sure you talk to quality candidates. But you never know. . .
By mbrcatz on Mar 24, 2011 | Reply
How commission gets paid, depends on the type of policy. For an annual policy, you get the entire year’s commission about 45 days after renewal. You get residuals, when the policy renews. If the policy cancels before the full year is up, you have to pay back some of the commission – it comes out of your NEXT commission check.
By Tom Z on Mar 24, 2011 | Reply
The commission amount received depends on the company you are contracted with and the product you are selling.
For example an independent Property & Casualty agent selling home and auto policies could expect 12% to 15% commission on both new business and renewal. The agent is independent and thus has to pay all of his or her expenses.
An agent selling health insurance to individuals might receive commission as low as 1% for new and renewal. Another company might give 5% to 7% commission for a specified number of years and then 0%.
Life insurance agents selling term or annuities can receive a large lump sum commission in the first year and no further commission on renewals. Other companies might offer a lower upfront commission but offer a small “trailing” commission.
The point is that there is no “standard” commission plan.