What is the maximum allowed first-year commission for the sale of a Medicare Supplement policy?

The maximum allowed first-year commission for the sale of a Medicare Supplement policy is set at 200% of the renewal commission. This structure ensures that agents are incentivized to sell these policies while also maintaining a focus on long-term client relationships, as the renewal commission reflects ongoing support and service to the policyholder.

In the context of Medicare Supplement policies, agents often earn lower renewal commissions compared to the first-year commission for the initial sale. By allowing commissions to be as high as 200% of the renewal commission, regulations aim to motivate agents to prioritize both the initial sale and future service needs, ensuring that they provide ongoing assistance to policyholders during their Medicare journey.

This balance encourages agents to remain engaged with clients, rather than merely focusing on closing sales for the immediate financial gain. Such structures are typical in the insurance industry and serve a dual purpose: compensating agents fairly for their efforts while also fostering a strong commitment to customer service.