A life insurance job offer isn’t like a W2 employment contract. It’s a business agreement — and buried inside are clauses that can cost you years of renewal income if you’re not careful. Here’s exactly what to look for.
Section 1: Commission Schedule
Find the commission schedule — usually an exhibit or addendum. Look for:
- Product-by-product rates — commission varies wildly by product (term, IUL, final expense, annuities). “90% commission” may only apply to one product line.
- First-year vs. renewal rates — Year 1 is where you make your money. Years 2+ (renewals) are your residual income. Know both.
- Override income — If you’re building a team, what do you earn on your downline’s production?
Section 2: Lead Agreement
How are leads handled? Key questions:
- Are leads provided or do you buy them?
- If provided, what’s the cost per lead and how is it recouped (deducted from commission vs. invoiced separately)?
- Are leads exclusive (you only) or shared (multiple agents)?
- What’s the lead return policy for disconnected numbers or duplicates?
Section 3: Chargeback Policy
This is the section most agents skip — and the one that surprises them most. A chargeback occurs when a policy lapses and the carrier reclaims part of your commission. Look for:
- Chargeback period (typically 12–18 months)
- Chargeback percentage (partial or 100%?)
- How chargebacks are collected (withheld from future commissions? invoiced?)
Section 4: Vesting and Ownership
This determines what happens to your renewal income if you leave. Watch for:
- Vesting cliff (e.g., no renewals until 24 months)
- Gradual vesting schedules
- Non-compete clauses restricting which carriers you can contract with after leaving
- Book of business ownership — do you own your client list?
The 5-Minute Rule
Before signing any offer, spend 5 minutes in the Deal Analyzer. Enter the commission rate, your expected lead costs, a realistic chargeback estimate, and your production goal. The number it returns is your actual projected Year 1 income — not the recruiter’s version.