How Do Life Insurance Commissions Work?

Video Transcript

"Hello, my name is Vic Schumacher. The company is HPE Financial Services. The topic today, is how do commissions work, for those agents that sell life insurance? Well, it can be done a couple of ways. If that agent works for a particular company, they are branded to that company, or that agent is a broker, and represents a variety of companies. The insurance company will pay that agent a certain commission. That commission can be paid as an advance upon the entire policy, or it can be paid upon as earned, on a month to month basis. Let's just hypothetically say that the commission is a hundred dollars, on a one month basis. That's what the commission would be. The agent can receive that hundred dollars per month, for as long as that policy is in existence. If that agent receives an advance on that, and the company pays them, let's just say, five hundred dollars advance, and the policy is cancelled, before that five hundred dollar advance has been paid on an as earned basis, then that agent must return the difference back to the insurance company, so it's a gamble, as to how long will that policy be in existence. My name is Vic Schumacher. The company is HPE Financial Services, helping people everyday."