Commissions Module - Lesson 5: Commission Basics

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:

Commission Basics

This lesson reviews how producers are appointed, how rates are set, and how compensation schedules work. It explains the role of delivery requirements, commission frequency, and payment methods in determining when and how advisors are paid. Learners gain a foundation for understanding the flow of commissions.

Learning Objectives

• Understand the role of appointment paperwork in setting up commissions.

• Explain how commissionable premium differs from total premium.

• Recognize the importance of delivery requirements in triggering payment.

• Identify common commission frequencies and payment cycles.

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