---
title: "What Is First-year Commission? Definition | Epic Life Glossary"
description: "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..."
url: https://epicline.preview.multisites.ai/glossary/first-year-commission
publisher: Epic Life Group
apply: https://epicline.preview.multisites.ai/apply
quote: https://epicline.preview.multisites.ai/get-a-quote
---

Compensation

# 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.

## Why it matters

Many carriers pay a high percentage in year one and a lower one later. If the policy lapses early, the carrier may take back part through a chargeback. Agents should track the earn-out period. The rate depends on product, carrier, and contract level. Example: a policy that lapses in month three may lose most of the advanced amount.

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

-   [Life insurance chargebacks explained: how they work and how to protect your cash flow](https://epicline.preview.multisites.ai/guides/life-insurance-chargebacks)

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