Commissions, levels, and hierarchies
No rate table on this page, and no headline percentage designed to get you on a call. What you get instead is how all of it actually works, so that when we do talk about your level you can tell whether the answer is a good one.
Why there is no rate table here
Every producer who has shopped FMOs has seen the same page: one big number, an asterisk, and a form. The number is usually real for exactly one carrier, one product, one state, and a production level nobody mentions.
Compensation in this business is set by the carrier, not by the FMO. What an FMO controls is the level it can contract you at inside the carrier's structure, and that depends on what you write, where you write it, whether you are personally producing or building a structure, and what the carrier will support. Those variables do not collapse into a single publishable figure without lying.
So we do it the other way around. This page explains the mechanics: how a level is determined, what an advance really is, where chargebacks come from, how overrides divide a fixed total, and what happens to your book if you leave. Then, in a direct conversation, we tell you your actual numbers and you can judge them against what you now understand.
What actually decides your level
Six inputs, in roughly the order they matter. None of them are secret, which is why an honest conversation about your level is possible even though a published table is not.
The inputs, and how each one moves the answer
| Input | How it is treated | Why it moves the answer |
|---|---|---|
| Production, actual and expected | Primary inputWhat you write, not what you plan to write | Carriers structure compensation around volume. A producer with a demonstrable book is a different conversation than a producer describing a goal, and pretending otherwise wastes everyone's time. |
| Whether you are building a structure | Changes the shapePersonal production or a downline | A personal producer and an agency owner want different things from the same total compensation. One wants the highest writing level; the other needs room above them for overrides on a downline. |
| Carrier and product | Set by the carrierDifferent on every shelf | Medicare Advantage, Medicare Supplement, and final expense are compensated on entirely different logics. A level that is strong at one carrier means nothing at the next. |
| State | VariesRegulated in some lines | Some lines are subject to compensation rules that differ by state, so the same contract can pay differently across your footprint. |
| Release and hierarchy history | Can constrainWhere you are coming from | If you are moving from another FMO, what the carrier will do and when is shaped by release terms and waiting periods that nobody here can waive. |
| Persistency | Earns trustThe quiet one | Business that stays on the books is worth more to a carrier than business that lapses, and that reputation follows a producer. It is the input most people underestimate. |
Specific levels, percentages, and override rates are not published here and will not be quoted in marketing material. They are discussed directly, in writing, before you sign a contract.
Advance or as-earned, and how to think about it
Both are available on the carriers that support them. The right answer is a cash flow question about your business rather than a preference, and it is one of the few decisions here you can get badly wrong on your own.
Advance
The carrier pays a portion of the expected first-year commission up front, over a defined advance period, and then the policy earns it back as the client pays. It funds lead costs now, which is why most new producers need it.
The trade is that you are carrying a balance. Every policy that lapses inside the advance period reverses part of what you were paid, so a heavy advance book with soft persistency can show production going up while your deposits go down.
As-earned
You are paid as the client pays. The first few months are slower and quieter, and there is very little that can be taken back later because very little was paid ahead.
Producers with a stable book and enough working capital often move here deliberately. The statements get boring, the chargeback exposure shrinks toward nothing, and the month-to-month income tracks the book rather than the calendar of what you sold ninety days ago.
How to choose
Ask what happens to your business if a quarter of what you write this month lapses by month six. If that scenario is survivable on advance, advance is a growth tool. If it is not, you are borrowing against optimism and the correction arrives at the worst possible moment.
It is not permanent
Advance terms vary by carrier and can change as your history with them develops. Where a carrier supports both, moving from advance to as-earned as your book matures is a normal thing to do, and we will help you sequence it so you do not take the gap in one month.
Where chargebacks come from
A chargeback is not a fine. It is the reversal of money that was advanced against a policy that did not stay on the books long enough to earn it. Knowing the causes is how you build a book that does not generate them.
| Non-payment lapse | The most common cause by a distance. The draft fails, then fails again, and the policy lapses. Usually traceable back to a draft date that never matched when the client actually has money in the account. |
|---|---|
| Client cancellation | The client changes their mind inside the free look period or shortly after. Often a sign that expectations at the kitchen table did not match the policy that arrived in the mail. |
| Underwriting reversal | A case is issued and then adjusted or rescinded when records come back different from what was disclosed. Careful health questions at application are the only real defense. |
| Replacement | A policy is replaced, by you or by somebody else, and the original unwinds. Replacing your own business inside an advance period is a fast way to work for free. |
| Carrier-initiated adjustment | A correction to a level, an effective date, or a plan type changes what should have been paid, and the difference is trued up on a later statement. |
| Downline chargebacks | If you have a structure, a reversal on a downline producer's business affects the override that was paid on it. This is why recruiting for volume alone is expensive. |
Advance periods, earn-out schedules, and how a reversal is recovered are set by each carrier. What is described here is the common shape rather than any one carrier's terms.
How hierarchy and overrides actually work
The single most misunderstood mechanic in agent contracting, and the one that creates the most resentment when nobody explains it.
The carrier defines a total compensation amount for a piece of business. The hierarchy decides how that total is divided between the writing producer and everyone above them. The writing producer is contracted at a level, the upline sits at a higher level, and the difference between the two is the override.
The practical consequence is worth stating plainly: an override is a share of a defined total rather than a surcharge added to your production. The question to ask an upline is not whether they take an override, because they do. The question is what you get in exchange for the difference between your level and theirs.
| The writing producer | The person who wrote the case. Paid at their contract level, and the reason the case exists at all. |
|---|---|
| The agency or upline | Sits above the writer at a higher level, receives the difference as an override, and is expected to provide something real for it: contracting, training, leads, technology, support, or all of the above. |
| The FMO | Holds the top-level contract with the carrier and administers the structure underneath it. Responsible for making sure the hierarchy at the carrier matches the agreement everyone thinks they have. |
| The carrier | Defines the total compensation, approves the hierarchy, and pays each party at their level. Every structural change ultimately has to be accepted here. |
- Set it before the first case. Hierarchy corrections after business is on the books are slow, sometimes impossible, and always awkward. This is worth an extra week at the start.
- Structure changes get documented. Promotions and restructures are applied at the carrier and confirmed in writing rather than agreed verbally and remembered differently later.
- You can see your own structure. If you have a downline, your hierarchy, your levels, and your overrides are visible to you rather than implied.
- Downline performance flows both ways. Overrides rise with production and fall with reversals, which is why who you recruit matters as much as how many.
Statement reconciliation, the unglamorous part
Ask any producer who has been writing for ten years whether they have ever been underpaid by a carrier. Then ask how they found out. The honest answer is usually that a client called about something else.
Carrier statements arrive in different formats, on different cycles, with different levels of detail. Some list the policy, some list a batch. Reconciliation means matching what arrived against what was actually written and submitted, and surfacing the gap.
The gaps are rarely dramatic. A policy issued under a slightly wrong hierarchy, a level applied incorrectly, a renewal that stopped arriving when a plan changed, an override missing on one downline producer for one month. Individually small, collectively not, and invisible unless somebody is checking.
- Matched against written business. What was submitted and issued, compared with what the statement paid, rather than assuming the carrier is right by default.
- Missing commissions get chased. When something is not there, we open it with the carrier instead of telling you to call them yourself.
- Reversals explained, not just deducted. A chargeback line should be traceable to a policy and a reason. If it is not, that is a question worth asking.
- Downline visibility. If you have a structure, you see production and reversals by producer rather than one net number you cannot interrogate.
- Questions get answered. Commission questions are investigated rather than deflected, which is a low bar that a surprising number of shops fail to clear.
Renewals, vesting, and what happens if you leave
The questions to ask before you write your first case, not after you decide to move. Terms are set by each carrier, so the honest answer is always carrier by carrier.
| Renewal commission | What a policy pays after the first year, for as long as it stays in force. It is the part of this business that compounds, and the reason persistency is worth more than a slightly better first-year level. |
|---|---|
| Vesting | Whether renewals stay with you, and under what conditions, once you are no longer contracted through a given hierarchy. Vesting terms are set by the carrier and vary widely, including immediate vesting, vesting over time, and conditional terms. |
| Assignment of commissions | Whether commissions can be directed to an entity rather than to you personally, which matters if you write through an agency or have partners. Each carrier has its own rules and paperwork. |
| If you move hierarchies | As a general rule, business already written stays in the hierarchy it was written under, and renewals continue to follow that structure. Moving changes where new business goes rather than reassigning your existing book. |
| If you stop writing | What happens to renewals when a producer becomes inactive is a carrier-specific term, and it is one of the least-read clauses in any contract. Read it before you need it. |
| If you have a downline | What happens to override income on a structure you built, if you leave, is a separate question from your personal renewals. Ask it explicitly rather than assuming the answer. |
Vesting, assignment, and renewal terms are set by each carrier in your contract with them. We will walk through yours before you sign rather than after you want to leave.
Before the commission conversation
Contracting
What a packet requires, how appointments are tracked, and how release affects your timing.
ContractingTechnology included
What comes with the contract, which is part of the real value of any level you are quoted.
The stackFor agencies
Hierarchy management, downline reporting, and what changes when you carry producers.
For agenciesProducts we place
Compensation logic differs by line, so the shelf you write shapes the conversation.
The shelfAlso worth reading: what this looks like for independent producers, and how contracting works end to end.
FAQs
Questions about commissions and hierarchies
Why will you not publish your commission levels?
Because a published number would be either misleading or useless. Your level depends on the carrier, the product, the state, what you actually produce, and whether you are writing personally or building a structure underneath you. Any FMO showing you a single headline figure is showing you the best case for one carrier and one product, and you will find that out after you contract. We would rather tell you your specific number in a conversation where you can ask what it is based on.
Should I take advances or write as-earned?
It depends on how much cash you can carry and how confident you are in your persistency. An advance pays a portion of the expected first-year commission up front, which funds your marketing now but creates a balance that has to be earned out. As-earned pays as the client pays, which is slower at the start and far calmer later. New producers with lead costs usually need advances. Producers with a stable book often move to as-earned and stop thinking about chargebacks entirely.
What actually causes a chargeback?
A policy that does not stay on the books long enough to earn out what was advanced. A client cancels, a draft fails, a policy lapses for non-payment, underwriting reverses a decision, or a replacement unwinds the original sale. The commission that was advanced against that policy comes back, usually against your next statement. Chargebacks are not a penalty, they are the accounting catching up with reality, which is why persistency matters more than production in a book that lasts.
How do overrides work if I build a downline?
The carrier pays a total compensation amount on a piece of business, and the hierarchy determines how it is divided. A writing producer is at a level, the upline sits above at a different level, and the difference is the override. This means an override is not an extra charge on your production, it is a share of a defined total. It also means the structure has to be set correctly at the carrier before the first case is written, because fixing a hierarchy after the fact is painful.
What is statement reconciliation and why should I care?
Carrier statements arrive in different formats, on different cycles, with different levels of detail, and they are not always right. Reconciliation means matching what the carrier paid against what was actually written and flagging what is missing. Most producers have been paid less than they earned at some point and never knew, because nobody checked. This is unglamorous work and it is one of the most concrete things an FMO can do for you.
What happens to my book if I leave?
Renewals follow the contract and the hierarchy the business was written under, and vesting terms are set by the carrier rather than by us. Some carriers vest renewals to the writing producer immediately, some vest over time, and some conditions apply to how you leave. We will tell you what each of your carriers does before you write with them, because finding out afterward is how producers lose a book they thought they owned.
Something else? Contact us
Get your actual numbers, in writing.
Tell us what you write, where, and whether you are building a structure. We will come back with your levels, your advance options, and how your hierarchy would be set up.