Is Insurance All Commission

Insurance All Commission (IAC) is a popular compensation structure in the insurance industry, where insurance agents earn commissions solely from the policies they sell. Under this system, agents do not receive a base salary or benefits from the insurance company. Instead, they rely entirely on the commissions they generate from selling policies to customers. The amount of commission an agent earns typically depends on the type of policy they sell, the carrier, and the amount of business they bring in. IAC is a common practice in life insurance and health insurance sales, where agents may receive higher commissions for policies with larger premiums.

Commission-Based Insurance Products

Commission-based insurance products are insurance policies in which the insurance agent or broker receives a commission for selling the policy. The commission is typically a percentage of the premium paid by the policyholder. 

Commission-based insurance products are common in many different lines of insurance, including life insurance, health insurance, auto insurance, and homeowners insurance.

There are both advantages and disadvantages to commission-based insurance products.


  • Lower premiums: Commission-based insurance products often have lower premiums than other types of insurance products because the insurance company does not have to pay the agent or broker a salary.
  • More flexibility: Commission-based insurance products offer more flexibility than other types of insurance products because the agent or broker can work with the policyholder to find the best coverage at the best price.
  • Convenience: Commission-based insurance products are often sold through agents or brokers who can meet with the policyholder in person to discuss their needs and help them find the best coverage.


  • Potential for bias: Commission-based insurance products can create a potential for bias because the agent or broker may recommend products that pay them the highest commission rather than the products that are best for the policyholder.
  • Limited product selection: Commission-based insurance products may not be available from all insurance companies because some insurance companies do not pay commissions to agents or brokers.
  • Hidden fees: Commission-based insurance products may have hidden fees that are not disclosed to the policyholder.

Table of Commission-Based Insurance Products

Type of InsuranceCommission Rate
Life insurance5-15%
Health insurance10-20%
Auto insurance5-10%
Homeowners insurance5-10%

Fee-Based Insurance Services

Fee-based insurance services offer an alternative to traditional commission-based insurance by charging a flat fee for their services. This fee typically covers the time and effort spent on providing advice, analyzing needs, and making recommendations, regardless of whether or not a policy is purchased. Here are some key features of fee-based insurance services:

  • Transparency: Clients know exactly how much they are paying for advice and services, eliminating potential conflicts of interest.
  • Personalized Advice: Advisors can focus on providing unbiased recommendations that align with clients’ specific needs and goals.
  • Comprehensive Analysis: Advisors can take a holistic approach, considering all aspects of a client’s financial situation and risk tolerance.
  • Flexibility: Clients can choose the level of service they need, from a one-time consultation to ongoing advice and support.

Fee Structure

Fee-based insurance services typically follow a tiered structure, with fees varying based on the complexity of the advice and services provided. Common fee structures include:

  • Hourly Rate: Advisors charge a fixed hourly rate for their time spent on consultations, analysis, and recommendations.
  • Flat Fee: Advisors charge a predetermined flat fee for a specific scope of services, such as a financial plan or insurance review.
  • Retainer Fee: Clients pay a monthly or annual retainer fee to secure ongoing advice and support from an advisor.

Benefits of Fee-Based Insurance Services

Fee-based insurance services offer several benefits compared to commission-based models, including:

Reduced Bias: Advisors are not incentivized to recommend specific policies or products to earn commissions, reducing potential conflicts of interest.
Improved Trust: Clients appreciate the transparency and unbiased approach of fee-based services, fostering greater trust in their advisor.
Long-Term Planning: Advisors can take a long-term perspective on financial planning, considering clients’ future goals and needs without the pressure to generate sales.

Insurance Agency Commission Structures

Insurance agents are paid commissions for selling insurance policies. The commission structure can vary depending on the type of insurance and the insurance company.

Property and Casualty Insurance

Commissions for property and casualty insurance (such as homeowners, auto, and business insurance) are typically based on a percentage of the premium. The commission rate can range from 5% to 25%, depending on the type of insurance and the insurance company.

  • Homeowners insurance: 10-15%
  • Auto insurance: 5-10%
  • Business insurance: 10-25%

Life Insurance

Commissions for life insurance are typically based on a percentage of the face value of the policy. The commission rate can range from 5% to 50%, depending on the type of policy and the insurance company.

  • Term life insurance: 5-10%
  • Whole life insurance: 20-50%
  • Universal life insurance: 10-25%

Health Insurance

Commissions for health insurance are typically based on a percentage of the premium. The commission rate can range from 5% to 15%, depending on the type of policy and the insurance company.

  • Individual health insurance: 5-10%
  • Group health insurance: 10-15%
Type of InsuranceCommission Rate
Property and Casualty5-25%
Life Insurance5-50%
Health Insurance5-15%

Alternative Income Models in the Insurance Industry

Insurance is not solely a commission-based industry. While commissions remain a prevalent income model, there are several alternative approaches used by insurance professionals to generate revenue:

Fee-Based Model

  • Professionals charge a flat fee or hourly rate for their services.
  • This model allows for a more transparent and predictable income stream.


  • Agents receive a base salary and earn commissions on top of that.
  • Provides a stable income foundation while incentivizing performance.

Retainer Model

  • Agents receive a recurring payment for providing ongoing services.
  • Fosters long-term client relationships and reduces dependence on commissions.

Equity-Based Model

  • Agents become owners in their insurance company or agency.
  • Generates income through dividends, appreciation, and potential sale of ownership stake in the long term.

Combination Model

  • Agents utilize a blend of income models to maximize earning potential.
  • Provides flexibility and reduces risk.
Income ModelProsCons
Commission– Uncapped earning potential
– Incentive-based
– Income can be inconsistent
– Higher risk
Fee-Based– Transparent and predictable income
– Less risk
– Limited earning potential
– Clients may be less motivated to purchase products
Salary-Plus-Commission– Stable income foundation
– Incentive for performance
– Lower earning potential compared to commission-only
– Can reduce motivation for higher sales
Retainer– Long-term client relationships
– Recurring income
– Lower earning potential compared to commission
– Can be difficult to acquire and retain clients
Equity-Based– Ownership and potential for long-term wealth creation
– Stability and potential dividends
– High upfront investment
– Risk of ownership
Combination– Flexibility
– Reduces risk
– Uncapped earning potential
– Can be complex to manage
– Requires balancing multiple income streams

Well, there you have it, folks! I hope this article has given you a better understanding of the commission structure in the insurance industry. Remember, not all insurance policies are created equal, and neither are the commissions. As always, it’s important to do your research, ask plenty of questions, and work with a reputable agent who can help you find the right coverage for your needs. Thanks for reading! If you have any other questions or want to learn more about insurance, be sure to visit our blog again soon. We’re always here to help you navigate the world of insurance with confidence.