What does vested commission mean?
Vesting determines whether you keep renewal commission on business you wrote after you leave the agency or upline you wrote it through. Fully vested means the renewals follow you. Unvested means they stop, and the book effectively stays behind. Terms vary enormously and are set in your contract.
Vesting is the single most consequential term in an agent contract and the one least likely to be raised in a recruiting conversation, because its effect is invisible for the first year or two and enormous after five.
Common structures include immediate full vesting, vesting after a period of service, partial vesting, and no vesting at all. Some are vested with the carrier and some only with the upline, which is a meaningful difference: the second can evaporate when the relationship does.
Ask specifically: am I vested with the carrier or with you, from what date, and what happens to renewals if I leave? Get it in writing.
| Renewal income, year 5 | $40,000/yr |
|---|---|
| If fully vested and you leave | keeps paying |
| If unvested and you leave | $0 |
| Difference over 10 further years | the whole book |
Illustrative. Vesting terms vary widely — read your contract.