Where Can I See Carrier Commissions?
9/11/2021 · 1 min read
You can find the commission rates for all products by clicking Products within the navigation menu within BOSS.
In general, commissions are paid at First Year rates up the policy's Target Premium. Premium in excess of the Target Premium paid in the first year is paid at Excess commission rates. Premium in years 2+ are paid at renewal rates (the Renewal rate may decrease after year 2 based on the product).
Target premium for life insurance is required as demonstrated in the example below.
A $1,000,000 universal life policy on a healthy 50 year old could be paid at $5,000/year for life or as a $100,000 single premium. Let's assume the target premium is $5,000, the First Year commission rate is 80%, the Excess rate is 3%, and the Renewal rate is 2%.
If the owner pays $5,000/year, the agent will be paid 80% of the $5,000, there will be no Excess commission, and the agent will be paid 2% on the subsequent years' premium. The total commission after year 1 is $4,000 and after 10 years is $4,900.
If the owner pays a $100,000 single premium, the insurance company cannot afford to pay 80% and keep only $20,000 to provide the $1,000,000 death benefit. The insurance company will pay 80% up to $5,000, the 3% Excess commission rate on the remaining $95,000, and no renewal commission since there are no premiums after year 1. The total commission after year 1 is $6,850 and after 10 years is $6,850.