Commission

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Commission The renumeration paid to an agent or broker for the introduction of business, usually a percentage of the premium. Premium is part of acquisition cost owning a business. Commission caps are standard and fixed by the regulator depending on the jurisdiction. The commission caps or rates may go above that fixed by the regulator if the intermediary (agent) not simply selling business to the Insurer but provides additional services t. For example acting as managing General Agent (MGA) In life insurance there are two forms of commission payments to agent or broker: first year commission payments and renewal commission payment. First year commission payment is usually higher than the renewal commission payment. Commissions are based upon the size of the policy the agent is selling (measured by annual premiums) and by the type of product that is being sold. An insurance agent’s commission percentage tends to change depending on the type of policy they’re selling be it life or non-life insurance policy. Generally, most jurisdictions require corporate entities acting as insurance intermediaries to have a licence to receive commissions. Exception is on captive agents, These are agents working solely with one insurance company contrary to independent agents who work with every insurance company. There are many factors to consider when thinking about becoming an insurance agent and working on commission. Commission can be great, but it can also create a lot of stress.  With commission, if you put in extra work and increase your insurance sales, you will see it in your paycheck. The benefits of commission come down to you being your own boss, owning what you make, and being able to control it with your level of effort and skill at selling insurance. There are some downsides to working on commission as well. Not everyone is fit for a sales position, and that is exactly what you are as an insurance agent. You need to build up a network of clients, lean on them over the years, and continue to grow that network. If you fail to do this or have no motivation to seek out leads and push sales, you're not going to earn very much commission.  #benewinsurance #insurtech #inclusiveinsurance #insurance #reinsurance #takaful

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