The short version
Captive and LOA agents work on a split — the agency keeps a meaningful slice of every commission, and usually keeps the renewals entirely when you leave. Independents keep the full commission they negotiated and keep their renewals for the life of the policy. The per-sale gap looks modest on one deal; across a career of compounding renewals, it's enormous.
How a captive/LOA split works
You write the business, the house takes its percentage, and what's left is yours — often with leads, training, or back-office costs justifying the cut. That can be a fair trade when you're brand new. The problem is what happens at renewal: in many captive contracts the recurring money either keeps getting split or reverts entirely to the agency the day you walk out.
How independent compensation works
- You keep your negotiated commission. No silent split skimmed off the top.
- Renewals are yours. The residual income compounds for you, not the house.
- Open-market access. You place business with the carrier that fits, which improves retention — and retention is what makes renewals pay.
A simple illustration
Imagine two agents writing the same premium. The captive agent keeps a split and forfeits renewals on exit; the independent keeps the full commission and the renewals. Even with identical production, the independent's book keeps paying long after the captive agent's stops. (This is illustrative — your actual numbers depend on your contract, carriers, and persistency.)
What to check in your own contract
Find the commission schedule, the renewal/residual terms, and what happens to both if you leave. Those three lines tell you how much of your own work you're actually keeping. If the answer stings, that gap is the opportunity.
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Book my free 15-minute callFrequently asked questions
Do independent insurance agents make more than captive agents?
Often, yes — independents keep the full commission they negotiate and keep their renewals, while captive/LOA agents work on a split and frequently forfeit renewals when they leave. Independent income is more variable, but the long-term earning ceiling is typically much higher.
What is a typical captive commission split?
It varies by agency and product, but captive and LOA agents always keep less than the full commission because the agency takes a share. The bigger issue is renewals, which many captive contracts keep with the agency.
Do independent agents keep their renewals?
Yes. Keeping renewals for the life of the policy is one of the core advantages of being independent, and it's where most of the long-term income compounds.
This article is general educational information for licensed insurance professionals, not legal or financial advice. Your own contract controls your specific situation — review it carefully, and when in doubt consult a qualified attorney.