Life & Health Insurance Practice Exam 2025 - Free Practice Questions and Study Guide

Question: 1 / 470

What is the maximum commission for subsequent years after the initial sale of an LTC policy?

15% of renewal premium

20% of renewal premium

10% of renewal premium

The maximum commission for subsequent years after the initial sale of a long-term care (LTC) policy is set at 10% of the renewal premium. This standard is established to ensure that agents receive fair compensation for servicing the policy without incentivizing overly aggressive sales tactics or excessive churn of policies.

In the insurance industry, particularly with long-term care policies, there is a significant focus on maintaining the policyholder's financial security and ensuring that they have continuity of care. Limiting the commission on renewals helps to align agents' interests with the long-term welfare of the policyholder.

Understanding this structure also aids in consumer protection, ensuring that agents are motivated to provide quality service rather than solely focusing on the sale of new policies. It encourages ongoing support and engagement from the agent, which benefits policyholders in managing their long-term care needs effectively.

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25% of renewal premium

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