A chargeback is when a carrier reclaims commission it already advanced you because the policy lapsed or the client left early. Misjudge the window and a surprise debit can wipe out a month's income. Here's how they work in 2026.
Carriers advance commission up front, assuming the policy stays in force. If the client disenrolls or lapses before earning that advance out, the carrier charges it back — debiting it from your next statement.
For Medicare Advantage and Part D, if a member disenrolls within the first 3 months, the plan must recoup the full commission. Months 4–12 are typically prorated. After the first year, renewals are generally safe.
Final-expense and life policies usually advance 9–12 months of commission. A lapse or NSF draft in the first 6–9 months can claw back hundreds or thousands per case — the #1 income leak for FE agents. Persistency below the carrier's threshold can even cost you the contract.
The fix is simple: log each policy's effective date and the carrier's chargeback window, and watch the at-risk cases. The free chargeback calculator estimates a single case; agents managing a book use a persistency and chargeback tracker to flag every in-window policy before a draft fails.
These free tools handle one client at a time. Our Excel + Google Sheets toolkits run your whole book — client CRM, 60-day renewal radar, IRMAA appeals, commission & chargeback tracking, and compliance logs. Built for agents, instant download, no monthly fee.
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It's when an insurance carrier reclaims commission it advanced to you because the policy lapsed or the client disenrolled before the advance was earned out.
For Medicare Advantage and Part D, a disenrollment in the first 3 months triggers a full chargeback; months 4–12 are usually prorated. Final-expense policies often have a 6–9 month at-risk window.
Track each policy's effective date and chargeback window, monitor persistency, and follow up on at-risk clients and failed drafts before the window closes.
Figures on this page are verified against U.S. government primary sources: