What Is Renewal Commission? Definition

Why it matters

Renewals can add up as a book of business grows. Some carriers pay them for a limited number of years, others for longer. Whether renewals continue after an agent leaves depends on the contract and vesting rules. Ask for these terms before signing. Families do not see this as a fee, since it is part of the premium the carrier already prices.

Source: law.cornell.edu

Where we use this term

Related terms

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.
Trail: Trail is an ongoing commission paid on a policy or account after the first year, often a small percentage. In life insurance, people use it for renewal pay, and in annuities it can follow assets.
Vested Renewals: Vested renewals are renewal commissions an agent has the right to keep receiving, even after leaving the agency, because the contract says they have vested.
Vesting: Vesting means an agent gains a right to something over time or on meeting conditions, such as the right to keep earning renewal commissions after leaving. The contract sets the rules.
Book Of Business: A book of business is the set of policies and customers an agent has sold and serviced. It is the source of renewals and future sales.

All 241 terms

Why it matters

Where we use this term

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