What Is Chargeback? Definition | Epic Life Glossary

Why it matters

Chargebacks mostly apply to advanced commission. The period is often the first year but varies by carrier and product. Agents can limit risk by confirming the customer can afford the premium, setting up automatic payment, and following up after delivery. Ask how an agency handles them before signing, since terms vary.

Source: blog.pia.org

Where we use this term

Related terms

Unearned Commission: Unearned commission is commission an agent received for premium that was not ultimately paid or kept. The carrier may take it back through a chargeback.
Earn-out Period: An earn-out period is the time over which advanced commission is considered fully earned. If the policy ends inside this period, a chargeback may apply to the unearned part.
Advance Commission: An advance commission is commission a carrier pays before the customer has paid all the premium it is based on. If the policy ends early, the agent may owe part back.
Persistency: Persistency is the share of policies that stay in force over time, usually measured at 13 months or longer. Higher persistency means fewer policies lapse.
First-year Commission: First-year commission is the commission paid on premiums collected in the first policy year. It is usually the largest part of life insurance commission on a new sale.

All 241 terms

Why it matters

Where we use this term

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