How Do I Get Paid?
In a typical insurance transaction the insurance carriers pay two parties, the agent and the BGA. In this example, a VUL case has been sold. The target for the case is 1,000 dollars. The agent normally receives a payout of 90% payout from the insurance carrier and the BGA typically earns an override of 30%.
BGA Compensation
- Since this a VUL case, the BGA's override, the amount of 300 dollars (30% * $1000 of target), must be paid to the broker dealer of the BGA, The Wholesale Broker Dealer.
- The Wholesale Broker Dealer then processes the commissions and pays the principal of the BGA according to their payout grid at the Wholesale Broker Dealer. In this case, the BGA has a payout of 90%.
- The Amount of 270 dollars ($300 Dollars from carrier * 90% payout at Wholesale Broker Dealer) will be paid to the BGA.
Agent Compensation
- Since this is a VUL case, the amount of 900 dollars (90% * $1000 of target) must be paid to the broker dealer of the agent, The Retail Broker Dealer.
- The Retail Broker Dealer then processes the commissions and pays the agent according to their payout grid at the Retail Broker Dealer. In this case, the agent has a payout of 90% at his broker dealer as well.
- The Amount of 810 dollars ($900 Dollars from carrier * 90% payout at Retail Broker Dealer) will be paid to the agent.