Free tool for independent agents
Life Insurance Commission Calculator
See what a policy pays you, how much of your advance you've actually earned, and how much is still open to chargeback.
The policy
What you get paid
Your advance is fully earned once the client has paid 9 months. Until then, part of it can be charged back.
How much is still at risk?
An advance is paid before it is earned. Whatever hasn't been earned yet is what the carrier can take back if the policy stops paying.
4 months
- You've earned
- $540.00
- Carrier takes back
- $675.00
You were advanced $1,215.00. After 4 months of premium you've earned $540.00 of it, so about $675.00 comes back out, usually from your next commission check.
| Month | Earned so far | Still at risk |
|---|---|---|
| 1 | $135.00 | $1,080.00 |
| 2 | $270.00 | $945.00 |
| 3 | $405.00 | $810.00 |
| 4 | $540.00 | $675.00 |
| 5 | $675.00 | $540.00 |
| 6 | $810.00 | $405.00 |
| 7 | $945.00 | $270.00 |
| 8 | $1,080.00 | $135.00 |
| 9 | $1,215.00 | $0.00 |
| 10 | $1,350.00 | $0.00 |
| 11 | $1,485.00 | $0.00 |
| 12 | $1,620.00 | $0.00 |
What these numbers mean.
An advance
The carrier pays you most of your first-year commission the moment the policy goes into force, before the client has paid for the year. It is a loan against future premium, not a bonus.
Earning it back
Each month the client pays, another slice of that advance becomes truly yours. Until it is all earned, the rest is still the carrier's money sitting in your bank account.
A chargeback
The carrier takes the unearned part back, usually out of your next commission check, when the policy lapses, is cancelled, or is never taken out.
Questions, answered.
- How is life insurance commission calculated?
- Take the monthly premium times twelve to get the annualized premium, then multiply by the first-year commission rate in your contract. A $150 a month policy at a 90% rate is $1,800 of annualized premium and $1,620 of first-year commission.
- What is an advance on commission?
- Instead of paying commission month by month as the client pays, many carriers pay a large share of the first year up front. That share is the advance rate. A 75% advance pays nine months of commission on day one.
- What is a chargeback?
- If the policy lapses or is cancelled before the advance has been earned, the carrier takes back the part you haven't earned yet, usually by deducting it from your next commission.
- How long until my advance is fully earned?
- This calculator treats commission as earned evenly across the first twelve months, so the advance is earned out once the client has paid for the share of the year that was advanced. A 75% advance is earned after nine paid months, a 50% advance after six.
- Are these numbers exact?
- No. They are estimates. Commission rates, advance percentages and chargeback schedules differ by carrier, product and contract level, and some carriers charge back on a steeper schedule in the first months. Check your own contract.
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Try Free - No Card NeededEstimates only. Commission rates, advance percentages and chargeback schedules vary by carrier, product and contract level. This tool is not a statement of what any carrier will pay. Nothing you enter leaves your browser.