When Life Insurance Carriers Actually Pay: Advance, As-Earned, Daily, Weekly and Monthly Explained
Your first check is not late. It is on a schedule nobody explained. The three questions that set your timeline and how to tell when a payment is actually missing.
"How long does it take to get commission from carrier ?" is one of the questions agents like you ask most, and the best answer is also the least satisfying: it depends on how you set up your contract. Daily, weekly, monthly, or as earned. Ask a room of agents to settle the advance-versus-as-earned debate and you get a dozen different setups. New agents wait for a check that is not late; it is on a schedule nobody explained. This post explains the schedule, so you know when a missing payment is actually missing. The three questions that set your timeline 1. Advanced or as-earned? As-earned means the carrier pays your commission as each premium arrives. On a $100-a-month policy at an 80% first-year rate, that is $80 a month for twelve months. Advanced means the carrier pays a block of that first-year commission up front, shortly after the policy is placed; New Horizons' guide to chargebacks describes advances of three months, six months or a full year depending on the carrier and product, and notes that some carriers charge a fee for advancing. An advance is a loan against premium the client has not paid yet; as TR King's comparison puts it, if the client cancels, the carrier is likely to charge you back for the unearned amount. 2. Paid on issue, paid on placement, or paid with premium? Even an advanced contract has a trigger. Some carriers advance when the policy is issued, some when it is placed in force, and most require the first premium to have cleared. Your carrier's producer guide or contracting department will tell you which trigger applies to each product; it is worth asking before the first case, not after. A policy issued on the 3rd with a first draft on the 20th does not pay until after the 20th on most contracts, however it is advanced. 3. Direct or through your upline? If the carrier pays you, the carrier's cycle is your cycle. If the carrier pays your organization and the organization pays you, add their cycle on top. A weekly carrier run plus a monthly organization payout is a monthly check, not a weekly one. What a typical timeline looks like Everything below is illustrative and depends on the carrier and your contract; the point is the sequence, not the exact days. Application submitted. Policy issued. Nothing is owed yet on most contracts. Policy placed: delivery requirements returned, first premium drafted and cleared. This is the day the clock usually starts. Carrier commission run. Daily, weekly or twice-monthly depending on the carrier and your election. If paid through an organization: their next payout run. Deposit. Most "where is my money" questions come from agents at step 2 who think they are at step 4. The second most common are agents at step 5 who think their carrier is slow. Which setup to choose The practical consensus among experienced agents is simpler than the argument suggests. Advances make sense for a new agent who needs cash flow to cover leads and rent, and for a manager who has to keep a team alive through its first year. As-earned makes sense once you have a book paying renewals, because it removes chargeback exposure and it turns lumpy income into steady income. Several producers described mixing the two: advanced on simplified-issue products where placement is quick, as-earned on fully underwritten products where the client is likelier to stay. Advance caps, where the carrier limits how much can be advanced at once, were mentioned as a protection rather than a restriction. How to know a payment is actually missing Know the placement date for every policy, not the submit date. Know your carrier's commission run day and your organization's payout day. Add them. If the deposit is more than one full cycle past that date, ask, with the policy number, the placement date and the premium in the message. Keep a list of every policy that has never appeared on a statement. Those are the ones that get lost: a policy that placed, drafted for three months and was never commissioned because a writing number was wrong at submission. Where AgencyView fits AgencyView's CFO Center reads each carrier's commission statements every night and matches them to the policies on the platform. It shows receivables by carrier, flags a carrier whose payments have stalled, and flags policies that were placed but have never paid. Chargebacks raise an alert the night they appear. Expected timing is only useful if something is checking it, and that is what the nightly sweep does. Read more in What Your Commission Statements Are Not Telling You .
Where AgencyView fits
Keep reading
All articles · AgencyView