Each policy can have up to three premium levels.  Most policies will only have one level, but Universal Life has more than one level.

The reason for different premium levels is because companies will often pay different percentages based on the amount of premium funding a policy.  They will pay a larger percentage on the first premiums and then pay a smaller amount on premiums in excess of the first level.

Base Premium

This is the premium normally used to fund a policy.  It will usually pay the higher commission amount.

Excess 1 Level

Excess premium is the amount of premium in excess of the base.  It usually pays a much lower commission because it acts more like an investment into a policy.

Excess 2 Level

Some countries have an even higher premium level which pays less commissions.  Excess 2 is set up to accommodate these situations.  It is just like Excess 1, but a higher level.

Excess 2 premiums only apply to Life Insurance.

See Also

Entering Rate Table Information