There's a commission built into your life insurance premium. Here's what happens to it.
Retail life insurance policies sold through an adviser include a commission built into the premium you already pay. Most people never see it. Keep collects it and gives you 12.5% of your premium back as a cashback, each and every year.
Key Takeaways
- ✔Commissions make up 20-30% of your premium - built in, not shown
- ✔Keep returns a large chunk of that commission to you
- ✔New policies: 12.5% cashback paid to you. Transfers: around 10% back
- ✔Your premium, insurer and cover stay the same
What is a life insurance commission?
Retail life insurance, the kind that covers life, TPD, trauma and income protection, is mostly sold through financial advisers. In exchange, insurers pay advisers a commission, which is built into the premium you pay. It doesn't appear as a line item. Most policyholders have no idea it's there.
That commission typically runs between 20% and 30% of your annual premium. On a $2,000 premium, that's $400 to $600 a year flowing to your adviser - every year your policy stays in force.
Keep is a licensed general advice provider. When you take out a new policy through us, or transfer an existing one, we collect that commission and give a large part of it back to you.
How do life insurance commissions work in Australia?
Australian regulations cap the commissions insurers can pay. There are two structures in use:
Level commission
A consistent rate for the life of your policy, capped at 30% of your annual premium plus GST. The rate stays the same whether your policy is one year old or fifteen.
Keep uses level commission on all new policies.
Hybrid commission
A higher upfront payment - up to 60% of your first year's premium plus GST - followed by an ongoing trail commission of up to 20% per year. Common on policies set up through traditional advisers.
Not sure which applies to you? Check your original Statement of Advice, or call your insurer directly.
Commission “clawbacks”
If a policy lapses in the first, life insurance companies require the first year's commission which has been paid to an adviser to be fully repaid to the life company. This is way the first year's cashback is paid in year 2.
So where does your commission go?
The commission is already priced into what you pay. Switching to Keep doesn't change your premium - the insurer charges the same rate regardless of which adviser holds your policy. What changes is where the commission goes.
With most advisers, it stays with them. With Keep, a large chunk comes back to you as cashback, paid directly to your bank account.
On a $2,000 annual premium with a 25% "Level" commission rate:
That's 12.5% of your premium back. Every year. Without changing your cover or your insurer.
Want to see the exact number for your policy?
Calculate your cashbackWhat you get back - new policies and existing policies
New policies - 12.5% guaranteed
Take out a new policy through Keep and we guarantee 12.5% of your premium back every year, regardless of insurer, while your policy remains inforce. We collect the commission and return a large chunk of it to you - so your cashback is locked in from day one.
Your first year's cashback is paid at the start of the second year. This is because insurers require commission to be returned if a policy lapses in the first year. The total amount doesn't change, just the timing. From Year 2, cashback is paid quarterly with no delay.
Existing policies - around 10% back
Transfer your existing policy to Keep and we return at least 50% of whatever trail commission your insurer is currently paying - typically the cashback will be around 10% of your annual premium. Cashback starts from your first premium payment with Keep, paid quarterly.
The exact amount depends on your current commission structure.
How cashback is paid - new policy example
$2,000 annual premium · 25% level commission
| Year 1 | Year 2 | Year 3+ | |
|---|---|---|---|
| Annual premium | $2,000 | $2,000 | $2,000 |
| Commission collected (25%) | $500 | $500 | $500 |
| Your cashback earned (50%) | $250 | $250 | $250 |
| Cashback paid this year | Held | $250 (Y1 instalment) + $250 (Y2 $62.50 / quarter) = $500 total | $250 $62.50 / quarter |
Premium increases at renewal increase your cashback proportionally.
Use your own numbers to see what you could get back
Enter your premium details and we'll show you how much commission you could keep every year. The calculator uses a default commission rate of 25% for new policies - adjust it if you know your actual rate.
- ✔See your estimated annual cashback
- ✔Adjust for your actual commission rate
- ✔Works for any premium frequency
Ready to start getting your money back?
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Are life insurance commissions regulated?
Yes. Life insurance commissions in Australia are regulated under the Corporations Act, with oversight from ASIC. The current caps - 30% for level commission, and 60% upfront plus 20% trail for hybrid - apply to all licensed providers.
Advisers who receive commission on the first year's premium are also required to repay all of that commission if the policy lapses in the first year, and a component of the hybrid upfront commission if it lapses in the second year.
Keep operates under a general advice licence and is required to disclose all commissions received. This is documented in the Product Disclosure Statement for your policy. If you want to know what commission your current adviser is receiving, you're entitled to ask your insurer directly - they can confirm the rate at any time.
Frequently Asked Questions
Does switching to Keep change my premium? +
No. Your premium is set by the insurer and stays the same regardless of which adviser holds your policy. Switching to Keep simply changes where the commission goes - instead of staying with your current adviser, around 10% of your premiums (based on 50% of the commission) comes back to you as cashback.
What is a trailing commission? +
A trailing commission (or trail) is the ongoing payment an adviser receives each year your policy stays in force - typically up to 20% of your annual premium on hybrid-structured policies. If you have an older policy, there's a good chance your adviser is collecting a trail right now. Transfer to Keep and at least 50% of that trail comes back to you instead.
Why is my Year 1 cashback delayed on a new policy? +
Insurers require the commission to be returned if a policy is cancelled within the first two years. To account for this, Keep holds your first year's cashback and pays it after 12 months. The total amount doesn't change - only the timing. From Year 2, cashback is paid quarterly after Keep receives the commission.
Does Keep charge any fees? +
No flat fees. Keep earns by retaining a portion of the commission - we only make money while your policy is active and your premium is paid. There are no setup fees, no advice fees and no exit fees.
What happens to my cashback if my premium increases? +
It increases too. Because cashback is a percentage of your premium, any increase at renewal - from age-based step-ups, CPI indexation, or a change in cover - increases your cashback proportionally. Your 12.5% rate stays fixed; the dollar amount grows as your premium does.
What type of advice does Keep provide? +
Keep provides general advice only. Our service is designed for people who want to access quality cover without paying for personal financial advice. We give you the information and toolsypu need, and are here to answer any general questions you may have, however, we can't make recommendations or provide personal advice. If you need personalised advice, we can connect you with a full advice provider on a no obligations basis.
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