Final answer:
Insurance agents' commission depends on the type of policies sold, their premium amounts, policy duration, and specific employment agreements, with possible bonuses for meeting sales targets.
Step-by-step explanation:
The sales commission of an insurance agent is primarily determined by the policies they sell and the terms of their employment. Insurance agents may receive commission based on various factors, such as the type of insurance policy, the amount of the premium, the policy's duration, or the particular agreement between the agent and the insurance company.
Often, commission rates are higher for new policies compared to renewals, acknowledging the effort required to acquire new customers. Agents might also earn different levels of commission depending on whether they are selling term life insurance, whole life insurance, or other types of policies.
In addition to commission, some insurance companies may offer bonuses or incentives to agents who meet or exceed certain sales targets or who sell policies to harder-to-insure individuals that fall into high-risk categories, as described in the scenarios related to adverse selection and government laws and regulations.