Definition - What does Expense Allowance mean?
An expense allowance is the amount of money an insurance company gives to an agent, not include the money they earn from commissions. This money could be issued to reimburse business-related expenses given prior to business transactions.
Some states set limits on the amount an agent can receive for their expense allowance.
Insuranceopedia explains Expense Allowance
Many insurance agents earn a living through commissions rather than a fixed monthly income. These commissions are a percentage of every insurance product they sell.
Earning commissions, however, isn't always cheap. Agents typically have to travel a lot, meet clients over meals, and otherwise take measures to ensure a good client experience. Some of the expenses associated with these activities can be covered by the insurance company the agent represents.
Typically, the allowed expenses are reimbursed after the agent submits receipts for them.
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