When do I actually get paid?

75% up front, once the carrier issues the policy and the first premium is paid. The last 25% comes in months 10, 11 and 12.

How much will I make on a policy?

Monthly payment × 12, minus any carrier fee, times your comp %. You get 75% of that up front and the rest in months 10–12.

1. 1

   Monthly payment × 12 = annual premium (AP).

2. 2

   AP − any carrier admin fee = qualified premium (QP).

3. 3

   QP × your true comp % = gross commission.

4. 4

   75% now. 25% in months 10, 11 and 12.

Why was my commission less than I expected?

Usually one of four things. Here they are in order of how often they happen.

1. 1An admin fee came out firstYou were paid on QP, not AP.
2. 2Your comp % is lower than you thoughtIt’s set by carrier and product. Check your comp grid.
3. 3The $1,500 cap held some backThe rest starts releasing after 6 months.
4. 4It was paid as-earnedMonth by month instead of advanced.

Still doesn’t add up? Tell the office which carrier and which month, and they’ll check it.

What is the $1,500 cap?

The most a carrier will advance on one policy up front. Anything over $1,500 is held and starts paying out after 6 months.

1. 1

   Carriers cap advances at $1,500 per policy. It protects you from chargeback debt if a big policy lapses early.

2. 2

   If your advance is above $1,500, it may be capped at $1,500 at first. The balance starts releasing after 6 months.

3. 3

   $1,500 is the base cap. Tenure and production earn you higher tiers.

Plain version: the cap doesn’t take money away from you. It slows down when the big ones land, so one lapse can’t put you in a hole.

What is a chargeback?

If a policy lapses before its advance is earned, the carrier takes back the part that wasn’t earned yet.

What’s the difference between AP and QP?

AP is the monthly payment × 12. QP is AP minus any carrier fee — and QP is what you’re paid on.

The chain

Monthly payment to money in your account, in seven steps.

1. 1

   Monthly payment × 12 = annual premium (AP).

2. 2

   Commission is paid on qualified premium (QP), not AP.

3. 3

   QP and AP can differ. Some carriers take an administrative fee out of the AP first — what’s left is the QP.

4. 4

   QP × your true comp % = gross commission.

5. 5

   True comp % is set by carrier, by product, based on your compensation tier.

6. 6

   The carrier advances 75% of gross commission as your initial payment.

7. 7

   The other 25% pays out in months 10, 11 and 12 — as long as the policyholder keeps paying.

Definitions

Sixteen words you’ll hear, in plain English.

• APAnnual premium

  The monthly payment times 12. It's the starting number for everything else.

  $100/mo × 12 = $1,200 AP
• QPQualified premium

  The part of the annual premium your commission is actually paid on. Some carriers subtract an administrative or policy fee first; what's left is the QP. If there's no fee, QP equals AP.

  $1,200 AP − $60 fee = $1,140 QP
• %True comp %

  The rate you're paid on a specific carrier's specific product, set by your compensation tier. It's on your comp grid — it is not one number for everything.

• ADVAdvance

  Commission the carrier pays you up front, before the client has paid a full year. Standard advance is 75% of gross commission. It's a loan against premiums that haven't come in yet — if the policy lapses early, the unearned part gets charged back.

  $1,140 gross × 75% = $855 advance
• AEAs-earned

  The opposite of an advance. Commission is paid a piece at a time as each monthly premium is paid. Slower, but nothing to charge back. Some carriers, products or situations pay as-earned only.

  $1,140 gross ÷ 12 ≈ $95 each month
• CAPCommission cap

  The most a carrier will advance on one policy up front. Base cap is $1,500; anything above it is held and released starting after 6 months. Higher caps come with tenure and production.

• PERPersistency

  The percentage of your policies still in force and paying after a set time (13 months is the common checkpoint). High persistency means your clients keep their coverage; low persistency means chargebacks and a bad look with carriers.

• PPPersistency pay

  Extra compensation you earn for keeping persistency above a carrier's threshold. Write good business that stays on the books and you get paid for it twice.

• PLPlacement rate

  Of the applications you submit, the percentage that actually get issued and paid for. Submitted isn't sold — placed is sold.

  10 submitted, 8 placed = 80% placement
• TRMTerm

  Coverage for a set number of years (10, 20, 30). Pays out if the client dies during the term, then it ends. The most coverage for the least premium; no cash value.

• IULIndexed Universal Life

  Permanent coverage with a cash value that grows based on a market index (like the S&P 500), with a floor so it doesn't lose value in a down year. Flexible premiums. Sold for lifetime coverage plus tax-advantaged savings.

• WLWhole life

  Permanent coverage with a fixed premium that never goes up and a guaranteed cash value that grows on a schedule. Simple and predictable; costs more than term.

• GIGuaranteed issue

  No health questions, no exam — everyone in the age range is accepted. The trade-off: higher premium, smaller face amounts, and usually a graded benefit (premiums refunded plus interest if death is in the first two years, unless accidental).

• SISimplified issue

  A short set of health questions, no medical exam, decision in minutes to days. Most of what we sell. Better rates than guaranteed issue because the carrier knows a little about the client.

• FEFinal expense

  A small whole life policy (typically $5k–$35k) built to cover funeral and end-of-life costs so the family isn't stuck with the bill. Usually simplified issue, ages 50–85, premiums that never change.

• MPMortgage protection

  A term policy sized and timed to the client's mortgage, so if they pass the house gets paid off and the family stays in it. Often sold with living benefits for disability or critical illness.

Nothing matches that yet. Tell the office and it’ll get added.