Persistency Rate
Persistency rate is the percentage of insurance policies that remain in force over a specific time period, typically measured at 13 months or 25 months after the policy issue date.
Think of it as a report card for both your sales quality and your clients' satisfaction with their purchase.
Why does this matter?
Persistency rates directly impact your income through chargebacks and future commission opportunities. Insurance carriers use persistency as a key metric to evaluate agent performance, determine contract levels, and calculate bonus payments.
Low persistency rates signal poor client qualification, inappropriate product recommendations, or inadequate follow-up service.
How it works:
Carriers track every policy you sell from its issue date and calculate what percentage remains active at specific milestones. A policy "persists" if premiums are being paid and the coverage remains in force. Policies that lapse, cancel, or are surrendered count against your persistency rate.
You'll encounter persistency tracking most prominently in life insurance and annuities, where carriers expect 13-month persistency rates above 85% and 25-month rates above 80%. Property and casualty products also track persistency, though the timeframes are typically shorter.
The biggest mistake agents make is focusing solely on sales volume without considering long-term client needs, leading to high lapse rates that trigger chargebacks and damage their reputation with carriers.
Example:
Maria writes 100 life insurance policies in January. By the following February (13 months later), 88 of those policies are still in force, giving her an 88% 13-month persistency rate. This strong performance protects her from chargebacks, qualifies her for persistency bonuses, and demonstrates to carriers that she's selling appropriate policies to well-qualified clients. In contrast, her colleague Jake has a 65% persistency rate because he focuses on quick sales without proper needs analysis, resulting in clients who cancel when they realize the policies don't fit their situations.
How Earn Base Helps
Earn Base tracks persistency metrics by agent and product line, helping identify trends and protect against future chargebacks.