---
title: "What Is Commission? Definition | Epic Life Glossary"
description: "Commission is the pay an insurance agent earns from a carrier when a policy is sold and stays in force. It is usually a percentage of premium set by the..."
url: https://epicline.preview.multisites.ai/glossary/commission
publisher: Epic Life Group
apply: https://epicline.preview.multisites.ai/apply
quote: https://epicline.preview.multisites.ai/get-a-quote
---

Compensation

# Commission

Commission is the pay an insurance agent earns from a carrier when a policy is sold and stays in force. It is usually a percentage of premium set by the carrier and the agent's contract level.

## Why it matters

Life insurance commissions are often highest in the first year and lower in renewal years, though products differ. Pay can be reduced by chargebacks if a policy lapses early. Income depends on production, lead costs, and contract level, so no figure is guaranteed. Families do not pay the commission as a separate fee, since it is built into premium.

Source: [law.cornell.edu](https://www.law.cornell.edu/wex/commission)

[Read next, for agentsHow do life insurance agents get paid? An honest breakdown](https://epicline.preview.multisites.ai/careers/compensation)

## Where we use this term

-   [Building an insurance agency: how overrides and downlines work, and what is legal](https://epicline.preview.multisites.ai/guides/building-an-insurance-agency-overrides-downlines)
-   [Captive vs independent insurance agent: who owns your book?](https://epicline.preview.multisites.ai/guides/captive-vs-independent-agent)
-   [Your first 90 days as a telesales life insurance agent: a week-by-week ramp](https://epicline.preview.multisites.ai/guides/first-90-days-as-a-telesales-agent)
-   [How to join an IMO: the questions to ask before you sign](https://epicline.preview.multisites.ai/guides/how-to-join-an-imo)
-   [IMO vs FMO vs MGA: which structure fits an independent agent?](https://epicline.preview.multisites.ai/guides/imo-vs-fmo-vs-mga)

## Start your climb.

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