By Hans Goldstein, Founder, Retirement Literacy Foundation. He is also a licensed California insurance producer (#4273294). Education, not a product recommendation.Published · Methodology dated October 3, 2026
In the most recent published industry averages we found (Wink, first quarter 2018), the agent commission on an indexed annuity averaged 6.26% of premium, 2.7 times the 2.29% on a multi-year guaranteed annuity. On a $250,000 deposit that is about $15,650 versus $5,725.
The published averages
| Annuity type | Average commission | On a $250,000 deposit |
|---|---|---|
| Multi-year guaranteed annuity (MYGA) | 2.29% | $5,725 |
| Traditional fixed annuity | 4.18% | $10,450 |
| Indexed annuity | 6.26% | $15,650 |
Arithmetic on the published averages. Actual commission varies by insurer, product, term, age and payout option.
Two things to keep in mind. First, these figures are from 2018 because they are the latest public averages we could verify; commission levels change, and you should ask about the actual product in front of you. Second, the commission is usually built into the product’s pricing (its rate, cap or surrender schedule) rather than deducted from your deposit, which is why it is easy to miss.
Why incentives matter
Commission differences are not a footnote. Research on variable annuities published as an NBER working paper (No. 27577, 2020) found sales were about four times as sensitive to the broker’s financial interest as to the investor’s value. Regulators have taken note: New York requires that compensation not influence life and annuity recommendations, and California’s annuity best-interest rules (Insurance Code 10509.9204, effective January 1, 2025) require a producer disclosure and let you request the sources and types of compensation.
Why simple products are rarely promoted
A multi-year guaranteed annuity is the simplest fixed annuity: a set rate for a set term, much like a CD issued by an insurer. Its published average commission was less than half that of an indexed annuity. Immediate annuities, which turn a lump sum into income for life, have no recent public commission average we could verify. When a simple product pays the seller less and takes less time to explain, it is not surprising that it gets less airtime. That says nothing about which product is right for you; it says to ask.
Longer surrender periods and more complex crediting usually travel with higher pay for the seller. We could not find a public data set that measures commission by surrender length, so treat that as a question to ask, not a statistic: "What do you earn on this product, and on the same insurer’s shorter-term version?"
Questions to ask any agent or advisor
- How are you paid on this recommendation, and how much, in dollars? (In California you can request the sources and types of compensation.)
- What would you earn if I chose a shorter surrender period or a simple MYGA instead?
- How long is the surrender period, and what is the charge in each year?
- Which features cost extra (income riders, enhanced benefits), and what is the annual charge?
- For an indexed annuity: what are the current cap and participation rate, and what are the guaranteed minimums written into the contract?
- What did you compare this against, and why did the others lose?
The SEC’s investor bulletin on indexed annuities gives the same advice: ask your financial professional about any expenses, such as commissions and other fees.
Methodology (dated October 3, 2026)
We report the most recent publicly available industry-average commission figures we could verify against their source: Wink’s Sales & Market Report for the first quarter of 2018, as published by InsuranceNewsNet on May 25, 2018. We did not use, and do not publish, any insurer or marketing-organization commission schedule. Dollar amounts are arithmetic on the published averages for a $250,000 deposit. We searched FINRA, SEC and NAIC consumer pages for public data linking commission to surrender length and to immediate annuities and found none, so those points are stated as questions, not numbers. Research on incentives is cited from its published source. Checked October 3, 2026.
Sources
- InsuranceNewsNet, citing Wink's Sales & Market Report: agent commissions, first quarter 2018 (May 25, 2018)
- NBER Working Paper 27577: Conflicting Interests and the Effect of Fiduciary Duty, Evidence from Variable Annuities (2020)
- New York 11 NYCRR 224.4 (Regulation 187, best interest), Cornell LII
- California Insurance Code 10509.9204 (annuity producer disclosure)
- SEC Investor Bulletin: Indexed Annuities
- FINRA: Annuities
Goldstein, H. (2026, October 3). Annuity Commissions: What Consumers Should Know Before They Buy. Retirement Literacy Foundation. https://retirementliteracyfoundation.org/research/annuity-commissions/
Journalists and educators may quote and chart these findings with a link to this page. Data: download the CSV.
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