2.
Eligible Premium
Production credit (for premium) will be based on eligible
premium paid or new money invested during 2023. Please note:
•
If commissions are paid as earned, premium credit should be
given only for the amount of premium actually received
during the production year.
•
If commissions are annualized, the premium credit should
also be annualized. Any chargeback of annualized
commissions should also result in a reduction of that year's
premium credit.
•
A policy that becomes effective in 2022 may result in
production credit for the amount of premium paid or new
money invested during 2023.
•
Life insurance policies that exceed the annual premium or
target premium are eligible for credit. First year premium
credit may be given in the Risk-Protection category up to
the amount of the annual/target premium. If the
annual/target premium is exceeded, (sometimes referred to
as a “top up”) premium credit may be given in the Risk-
Protection category for 6 percent of the amount that
exceeded the annual/target premium.
•
Financial Planning Fees/Fees for Advice are eligible for
Other Products credit for the gross fee paid to the company,
broker dealer or individual agent/advisor. Fees must be
documented by certifying letter signed by a company
official, a broker dealer official, or a Certified Public
Accountant (or equivalent) for qualifying members.
•
Group health insurance premium is eligible for credit in the
first year of the policy only. Additions to the group policy in
subsequent years are not eligible for credit.
•
Single premium and/or short-term endowment premium is
only eligible in the first year of the policy. Short-term
endowment riders (max 15 years) to life insurance policies
are eligible for 6 percent of first year premium credit.
•
Long-term endowment premium is only eligible in the first
year of the policy. Long-term endowment riders (16 or more
years) to life insurance policies are eligible for 100 percent
of first-year premium credit in the Risk-Protection category.
•
Premium credit for pensions is based on the product used to
fund the pension (life insurance, annuities, mutual funds,
etc.) which determines whether it receives Risk-Protection
or Other Products credit.
3.
Eligible Income
Production credit is based on annual gross income paid during
2023. Please note:
•
See chart on page 4 for eligible products.
•
Under this model, income is defined as first-year, trail and
renewal commissions, as well as fees for product
placement, asset management fees and fees for advice.
•
Other production-based compensation, such as salaries and
production-based bonuses, are also eligible for credit.
•
Income contributed as part of a deferred compensation plan
is eligible for credit. Credit should be taken during the
production year when the deferred income was earned.
•
Override commissions are eligible only for personal
production.
•
Income considered INELIGIBLE for MDRT credit
includes:
−
Training bonuses/allowances
−
Sales/expense allowances
−
Sign-on bonuses or transition packages
−
Overrides derived from the production of others
−
Non-cash compensation, such as incentive trips
−
Income from property and casualty insurance and
general insurance (fire, home, auto, etc.)
−
Income from the sale of mortgages
−
Life settlements
−
Money market accounts
4.
Credit for Coverage Written on the Applicant, Spouse
or Dependents
•
Any business written on the applicant, applicant’s spouse
or dependents may not exceed a maximum of 5 percent
of the current year's MDRT production requirement
(USD 3,700 eligible commissions or USD 7,400 of
eligible premium or USD 6,410 of eligible income) if any
of the premiums are paid, directly or indirectly, by the
applicant or spouse.
5.
Replacements
•
Credit for individual life insurance policies may be
claimed only for the amount of first-year commissions or
premium on the new policy that exceeds the first-year
commissions or premium for the policy being replaced. If
the amount is not known, then the amount of
commissions being replaced shall be calculated by
multiplying the current commission times the appropriate
premium for the policy being replaced. Premium credit
can be determined by subtracting the replaced premium
from the new premium.
•
Conversion of a permanent product to a permanent
product is to be treated as a replacement for MDRT
purposes. This applies only to replacement of individual
life insurance policies.
6.
Definitions And Interpretations
•
Business Paid for and Underwritten
Business to be credited shall be paid for during the MDRT
qualification period (January 1 through December 31).
Business shall be considered to have been paid for as of the
date when the coverage first became fully effective with
home office approval from the standpoint of payment of the
claim (regardless of company practice or the distance
between home and field office). However, no credit shall be
allowed until the home office has finally accepted the
premium and also until the first-year commissions have been
paid or credited to the agent's account without any right
reserved to the insurance company to recover same, except in
case of recall under the contestable provisions of the contract.
On joint, partnership, corporate and/or brokerage business,
MDRT credit shall be given for only that portion of the
business on which the applicant has been compensated, either
by first-year commission or the equivalent.
•
Health Insurance
Includes policies that relate to the health of the body. Dental,
vision, etc., are eligible for credit. See page 4 for specifics.