What Are Annuity Commission Rates?


Quick Answer

Annuity commission rates are the fees that insurance agents receive when they sell certain annuities. As of November 2015, some insurance agents earn up to 10 percent of an annuity's value, states ImmediateAnnuities.com.

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Full Answer

Most annuities that earn agents high commissions are annuities that have a stock market index. For other types of annuities, commissions run as low as one percent, notes ImmediateAnnuities.com. Commissions are only paid once and calculated into the cost before purchase, so annuity quotes already contain the full amount of the commission.

Agents may try to deflect questions about annuity commissions by saying that the client does not pay the agent a commission or that they do not charge a commission. Although this is technically true, it is in a sense misleading, reports ImmediateAnnuities.com. An annuity commission may not be directly withdrawn from a client's premium; however, if an insurance company is paying an agent, the cost comes from the client's returns at some point in the future.

Some annuities with a commission rate include secondary market annuities, deferred income annuities and immediate annuities. These normally earn an agent a one percent to a 3.5 percent commission. Lifetime annuity purchases typically earn an agent more than an annuity with a fixed yearly term. Short term multiyear guaranty deferred annuities typically earn agents a one or 1.5 percent commission.

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