Flat Commission

Definition - What does Flat Commission mean?

A flat commission is a fee an insurance company pays to an insurance agent every time they sell a policy for the company. In this case, the type of policy sold does not matter. As long as the insurance agent sells a policy, they receive the commission.

Insuranceopedia explains Flat Commission

Commissions are a way to incentivize insurance agents to sell policies. The more policies they sell, the more they are paid. Commissions may be paid in addition to a traditional salary or serve as an alternative to the latter.

The benefit of a flat commission is that the insurance agent can make a profit in selling any type of policy the insurance company offers. So they can simply try to sell whatever the market demands as opposed to having to sell one particular type of policy.

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