Traditionally, retail life insurance products have paid compensation primarily in the first policy year, and for good reason.
Life insurance is hard to sell. The underwriting process is cumbersome and takes time. Equally as important, life insurance has historically been sold by agents who needed heaped commissions in order to put food on their table as they begin their careers in the business.
Over the past decade, those factors have started to change. Underwriting is getting easier with accelerated and non-med processes. Life insurance is increasingly sold by experienced advisors who have multiple business lines and are focused on building the enterprise value of their practice with recurring revenue.
Times have changed, but compensation structures haven’t.