Commissions Module - Lesson 9: Understanding Commissions in Life Insurance for Independent Advisors and Financial Advisors

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:

Understanding Commissions in Life Insurance for Independent Advisors and Financial Advisors

This lesson focuses on product-specific commission structures for life insurance, including term, whole life, UL/IUL, and VUL. It explores differences between first-year, renewal, and trail commissions, as well as rules in states like New York. Learners will understand how product design impacts advisor pay.

Learning Objectives

• Explain commission structures for term and permanent life insurance.

• Recognize differences in compensation for UL/IUL and VUL products.

• Understand New York’s commission limits and their impact.

• Identify how rolling targets and excess premiums affect pay.

COURSE CONTRIBUTORS