The changes mean that intermediaries signing up for the Double Indemnity option will receive an upfront lump sum of 24 months of commission in month one of the policy start date. After 24 months, the commission payment will revert to Annual Indemnity.
Based on a typical commission rate of 27.5% an Intermediary would be paid 50% of the total annual premium in month one and Annual Indemnity of up to 27.5% on month 25 and annually thereafter.
All Appointed Representatives will receive 27.5% trail commission from month 25. This also applies to Directly Authorised intermediaries who write over 100 cases per annum with Paymentshield, which are still on risk. Those who write less than 100 will receive a still very competitive 25% which will be reviewed annually.
With the Paymentshield straight-line clawback structure, if a policy is cancelled within the first 12 months of its start date, Intermediaries won’t lose the commission already earned - unlike some commission structures on the market.
Assuming a customer took out a Buildings & Contents policy with a premium of £25 (excluding Insurance Premium Tax ) per month their adviser would be paid £150 in month one and £82.50 in month 25 and annually thereafter.
Chris Traynor, sales and marketing director at Paymentshield commented: “We have worked very hard to review our commission structure over the last year to ensure intermediaries are appropriately rewarded for their efforts and to bring innovative initiatives to the market.
"We believe this new proposition offers great choice and flexibility to suit the intermediaries’ needs and business structure. It should be particularly attractive to those Intermediaries who are considering selling GI as it really kick-starts their earning potential.”
