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Q. What is the average commission percentage paid to the agent, and does it vary from a fixed or a variable annuity?

Posted by: Gordon S
A. Commissions can range from 1% to well over 10% of the initial deposit. And yes, the commissions structure on a fixed annuity is quite different from that of a variable annuity. It's difficult to get to an average. To make things even more complicated, variable annuities usually call for the agent to choose the commission option. If Option A is selected (and yes, that's the official name), the agent receives all of the commission up front in one lump sum. Option B nets the agent a smaller upfront payment -- perhaps 75% of the sum for Option A. The agent then receives additional commissions, known as trails, for either a set period of time or for the life of the contract. Option C causes the agent to receive even less up front -- maybe only 50% -- but see significantly larger trails.

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