Trail commission
Also called: trails, annuity trail commission
A trail commission is an ongoing commission paid on an annuity, usually a percentage of the contract value, for as long as the contract stays in force.
Some annuity commission options pay a lower upfront commission in exchange for trails, which spread income over the life of the contract.
Because trails depend on contract values, they change as account values change, which makes them harder to predict than flat renewals.
Trails can become a large share of an annuity book's income, so they belong in any revenue view of the book.
"On that annuity, the agent took a lower upfront commission in exchange for a trail."
Should an agency track annuity trail commissions separately?
Yes. Trails depend on contract values and continue for as long as the contract stays in force, so they behave differently from upfront and renewal commission in forecasts.