"How much do agents make?" depends entirely on how commissions work — and most new agents don't fully understand their own comp. Here's the whole picture.
First-year vs renewal commission
Most insurance pays two ways:
- First-year commission (FYC): a percentage of the first year's premium, paid when the policy issues. This is the big number.
- Renewals: a smaller percentage paid each year the client keeps the policy. Renewals are how agents build income that shows up whether or not they sell that month.
The magic of the business is stacking renewals. Year one you eat what you kill. By year five, renewals from prior years pay you before you make a single new sale.
What is "street-level" commission?
Street level is the standard commission a carrier pays a producing agent. Uplines (FMOs/IMOs and agencies) receive a higher contract level and pay their agents *at or near* street. A red flag: an upline that offers you *below* street to pad their own override. A good upline gives you full street-level (or higher) comp and makes their money on volume and overrides, not by shaving yours.
Overrides: how agencies earn
When you write business under an agency, the carrier pays the agency an override — the spread between the agency's contract level and yours. This is *not* taken out of your check; it's paid by the carrier on top. That's why a strong agency can give you full street comp, cheaper leads, and support and still profit.
Advances and chargebacks
- Advance: carriers often pay a chunk of your first-year commission upfront (e.g., 9 months advanced) instead of as-earned, so you get paid faster.
- Chargeback: if the policy cancels before the advance is "earned back," you owe the unearned portion back. This is the number-one cash-flow surprise for new agents. Persistency (keeping policies on the books) protects you.
Example: final expense
Say you write a $50/month final expense policy with a 100% first-year commission and a 9-month advance:
- Annual premium: $600
- First-year commission: $600
- 9-month advance: ~$450 paid to you now
- If it stays on the books, the rest earns out; if it lapses in month 3, expect a chargeback.
Write 8 of those a week and the math on this business gets interesting fast.
The takeaway
Know your contract level, always aim for full street or better, understand your advance and chargeback terms, and protect your persistency. Agents who understand their comp make better decisions about which products, carriers, and uplines to work with.
Want to see real street-level comp and the lead flow behind it? Apply to Bridgepoint — we show you the numbers before you commit.