Independent Medicare Agent Guide to Getting Started with Commissions
April 5, 2022

An independent agent has a lot on their plate. They’re a one-person band fulfilling all of the duties for their agency, from selling to customer service to IT support.  

When you’re busy building and growing your business, sometimes the management pieces can fall between the cracks. This blog will focus on one of the most significant management pieces: commissions processing.

Related: 5 Reasons Why Medicare Agents Need to Track Commissions

Every agent earns commission payments, but are you tracking your commissions? Are you ensuring they’re correct? Are you doing your due diligence and reporting on the health of your commissions? 

Below are the five steps to follow to help you get started in managing your incoming carrier (or upline) commission payments. Whether you’re new to the insurance industry, are looking for a better way to manage your commissions, or simply want additional information, these five steps are within your grasp and essential to helping you ensure your commissions are correct. 

Step 1: Tracking Commissions 

Tracking commissions is the base level for commissions management. Think of it as a checklist. You’re checking off the fact that you received a payment based upon the agreement you have with the carrier for that particular product. Tracking commissions means monitoring when a policy goes live, then watching for when the payment comes in from the carrier (or upline).  

And that’s about the extent.  

This can sometimes be difficult for Medicare agents, depending on the type of products you sell. Some states and products only pay once annually for a product, so remembering to check for that one specific payment can easily be put on the back burner.

But, if you’re organized, you can find a system that works for you to ensure you’re being paid on time for the right policies.  

How to Track Commissions 

For effective commissions tracking, you need: 

  • The agreement you have with the carrier 
  • The policy’s effective date (the date it goes into effect)
  • The incoming commission payment from the carrier or your upline

With that information, you can compare the carrier statement you receive against the policies you’re expecting to be paid on. Again, it’s a checklist: I expected a payment for Humana policy 12345, and I received a payment for it. Check and done.  

You can track your commissions via: 

  • Paper Files & Spreadsheets: Often, this option is the most manual. But, it’s the most inexpensive option, as well. Using paper files and spreadsheets means comparing the incoming commission payment line by line vs. when you expected an incoming payment to happen.  
  • Commission-Specific Software: Commission-specific or commission-only software is built specifically for commissions processing. The upside is that they’re usually pretty robust when it comes to commission capabilities. The downside is that they’re industry agnostic, so there could be some significant customizations or workarounds needed to make it work for your agency. Additionally, they don’t always track other business data like clients, policies, etc. Examples: Commission Tracker and QCommissions 
  • Generic CRM with Commission Capabilities: The world truly is your oyster when it comes to generic CRMs. Customer Relationship Management, CRM, software is built to help you manage your business—again, designed for businesses at large. There are many, many options out there, but they’re not all made equally, and they do not always have the same capabilities. Some generic CRMs come with commission offerings, and others do not, so do your due diligence to ensure it’ll function for your commission needs.  
  • Agency Management System (AMS) with Commission Capabilities: An agency management system, or AMS, is a system that’s usually built for a specific industry niche, like the life and health insurance industry or Medicare. However, similar to the CRM, every AMS is not built equally, and the capabilities will vary from platform to platform. Examples: RadiusBob and AgencyBloc 

Step 2: Monitoring Commissions 

Tracking commissions is great. It ensures you’re being paid, but that’s it. The next step is monitoring, which is where compensation accuracy comes into play.

Missing and inaccurate commission payments are part of everyday business for life and health insurance agents. There are three main reasons this can happen: 

  1. The carrier is behind on payments (In general, agents understand that the carriers can be 2-3 months behind on payments)
  2. A policy didn’t go into effect (The policy may not have been submitted correctly, or the client reached out to the carrier directly to cancel the policy)
  3. Simple human error 

Regardless of why the payment is wrong (or completely missing), it boils down to this: your incoming commission payments are your income, and you want to be sure they’re correct. 

How to Monitor Commissions 

You can use any of the same systems from step one to find missing commissions, but depending on which you choose, it may require extra work. This is especially true when it comes to spreadsheets and paper files. Not only do you have to compare each incoming commission line by line, but you also have to check for the accuracy of that payment. 

With a system like a commission-only system, CRM, or AMS, you may be able to identify these misses faster. For example, some systems identify missing commission payments in a report that takes seconds to pull. Then, you’ll have that insight right away to rectify sooner. 

Taking the time and closely monitoring your incoming commission payments can be incredibly lucrative and ensure your bottom line is correct.  

Step 3: Reporting on Commissions

Reporting is crucial to help you understand the health of your incoming commission payments and the health of your business overall. When you report on your commissions, you can gain essential insights like: 

  • What the hottest or most popular products are for your business.  
  • The breakdown of your income and which products generate your highest income.  
  • When products need to be phased out of your services—this may be due to a lack of popularity or the commissions earned.  
  • When your agency needs to make changes—these changes could include growing your servicing area, adding more product types or services, or potentially hiring additional staff.  

Knowing how your commissions are fairing, where you should be spending your time, and the best products for your business could mean the difference between surviving and thriving.

Another piece of the puzzle is knowing when commissions are no longer being issued for a specific policy. 

Again, this will depend on location and product type, but some Medicare products have a cap on how long policies pay out to the agent. A standard length is six years. If you’re unaware that your policy has stopped paying out, then you’re losing vital income.  Reporting on your incoming commissions could help you uncover this miss. 

How to Report on Commissions 

Reporting, once again, is achievable with most of the systems we discussed earlier, but depending on the system and setup, it can be more time-intensive or require a more advanced level of Excel knowledge.  

You can do some reporting if you choose the paper files and spreadsheets route, but it will highly depend on your knowledge of how to manipulate the spreadsheets. It can also be a bit more time-intensive, but the insights gained from the reporting could be worth it for your agency.

Platforms will vary in reporting capabilities. Look for pre-built reports that allow you to run the report, gain insights, and move on with your life.  

When looking at what types of reports would be worthwhile, here are some to consider: 

  • Incoming commission payments by carrier 
  • Incoming commission payments by product type 
  • Incoming commission payments by location (if you work in multiple states) 
  • Incoming commission payments by agent (if you have multiple agents) 
  • Missing or inaccurate commission payments overall 
  • Total incoming commission payments paid out 

These reports help you dive deeper into your commissions to expand your knowledge and help you make more informed decisions for the future.  

Step 4: Processing Commissions  

Processing commissions combines all of the steps above and puts them together in one cohesive process.

To effectively process your commissions, you should track your commissions, monitor the payments, and report on your commissions. Processing can also include other steps like projecting your commissions, tracking revenue types, etc.  

Projecting commissions can sometimes be more complicated on the Medicare side, especially if you’re only paid annually by the carrier or your upline. However, the benefit resides in the planning and knowing what’s coming and when.

Tracking revenue types helps you break down your incoming commissions into segments to better understand what kind of commissions you’re receiving for which product types and from which carriers. For example, some Medicare agents receive admin fees alongside their commission. This would technically be a bonus or additional revenue that wouldn’t classify as straight commission. You could track this information for additional insight that could prove useful for future planning and choosing which products and carriers you’ll use.

Is Commissions Processing Too Advanced for Me? 

Although processing commissions may sound like the “advanced insurance agents process,” it’s not. Any independent agent, agency, retail shop, etc., can process commissions; it just depends on the tools you employ, the processes you adopt, and the time and care you put into it.

You can use most systems to process your commissions, even spreadsheets and paper files. The two biggest differentiators between using a system not made for processing commissions (i.e., spreadsheets, paper files, generic CRM without commission capabilities) and one that is (i.e., an AMS, commission-specific software, or CRM with commission capabilities) are: 

  • The time commitment required to process your commissions effectively 
  • The accuracy of your commissions

Every agent earns commissions, every agent tracks commissions to a certain extent, and every agent deserves the peace of mind knowing their commissions are timely, correct, and helping them meet their goals.  

Step 5: Finding Your Commission System 

Finding the right system for your process is crucial to helping you find success. You've got to ask the right questions to do your due diligence and ensure a system is right for you.

Here are some questions to consider asking commissions software vendors: 

  • Can I track splits (if necessary) or advances?  
  • Can I identify missed and inaccurate commission payments? 
  • Are there pre-built and customizable commission-specific reports? 
  • Can I track multiple revenue types? 
  • Can I project future incoming commission payments? 


The size of your book of business and the time you’re willing to commit to your commissions will influence your decision on which system you should use. This means you should weigh how much time you want to spend manually analyzing your commissions to ensure accuracy against the cost to have a system that efficiently tracks and manages these processes.

Some agents prefer to go line by line to manage their commissions manually, and that can be a lengthy process, but it also works for them due to the size of their business. Other agents prefer to use a system to help them make their processes more efficient and leverage the cost of the system against the reduced time they spend managing commissions and the money they uncover in missing compensation. It’s entirely a personal choice.

Let’s cover the four ways you can process your commissions once more.

Paper Files & Spreadsheets 

Once again, this option is the cheapest, but it can also be the most time-intensive choice. It’s a great option for agents that want to figure out their processes and keep their costs low. The key to making this option work for you longer is knowing how to manipulate spreadsheets and pull the insights you desire. On the commissions side, tracking commissions and ensuring payment accuracy is a process. You’ll have to go line by line and compare each spreadsheet against your actual received commission payment. For reporting, it can be tricky, but this is where your knowledge of how to manipulate spreadsheets will come in handy.

Commission-Specific Software 

Commission-specific software should make processing your commissions easier as they’re built specifically for commissions. The biggest downside of this option is that you’re not guaranteed it’ll also tie your commission data to other crucial data points like client and policy information. Again, the features available and the price tag for the features you want will vary from platform to platform, so it’s essential that you do your due diligence to find the right fit. 

Examples: Commission Tracker and QCommissions

Generic CRM with Commission Capabilities 

The first step in using a generic CRM for your agency is to ensure it has commission capabilities, as this feature is not always available. Similar to the commission-specific system, the cost and availability of features will vary from platform to platform, so be sure to ask the necessary questions to find your right fit. CRMs are often feature-rich platforms with a wide range of capabilities your agency could use, but it comes with the caveat that they’re usually industry generic and built for businesses at large. Therefore, the time it takes to build out the system to work for your needs could be time-consuming and may require extra work  

Agency Management System (AMS) with Commission Capabilities 

An agency management system, or AMS, is a CRM built for a specific industry niche, like the life and health insurance industry or Medicare. Since they’re industry-specific, your processes shouldn’t require extensive workarounds and customizations. However, similar to the CRM, every AMS is not built equally, and the capabilities will vary from platform to platform. Same with the price. 

Examples: RadiusBob and AgencyBloc 

Ultimately, it boils down to this: every agent has to manage their commissions somehow; what is the best way for your agency and your processes? 

The Ultimate 2022 Tax Deductions Checklist for Independent Insurance Agents

Related Posts