Commissions Module - Lesson 3: Key Terms

The Commissions Module equips participants with a practical understanding of how compensation flows across carriers, BGAs, and advisors, and why it is central to advisor retention and firm health. The course covers first-year, renewal, and trail commissions, as well as product-specific differences across life, annuities, hybrids, long-term care, and Medicare products.

Learners will explore inforce transactions that impact pay, regulatory considerations in states like New York, and how to resolve commission errors quickly to maintain trust. The module also introduces the role of technology and reporting systems in reconciling payments, managing hierarchies, and ensuring compliance. By the end, participants will be able to interpret statements, anticipate commission impacts, and support accurate, timely compensation across diverse product lines.

Lesson Overview:

Key Terms

This lesson introduces the core terminology used in commissions, including commissionable premium, target premium, overrides, bonuses, and spread commissions. Learners will also explore concepts like chargebacks, renewals, and rolling targets. Understanding these terms is essential for interpreting statements and contracts.

Learning Objectives

• Define commissionable premium, target premium, and excess premium.

• Differentiate between commissions, overrides, and bonuses.

• Explain rolling targets and how they affect long-term compensation.

• Recognize chargebacks, renewals, and spread commissions.

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