Producer Compensation Published: 2026-09-27

MYGA Commission vs Fee-Only Advisor: What You Actually Pay

Written by Hans Goldstein, independent licensed insurance producer · CA license 4273294 · NPN 20602398
Published September 27, 2026

Short version: on a plain MYGA, a commission is paid once by the insurer and your full premium is credited. A fee-only advisor is typically paid a percentage of your account every year. On a $250,000, 5-year MYGA, a 1% annual fee in our illustration costs about $14,500 over the term. The commission-paid version has no separate charge to you. Fee-only still wins in some cases, and those are covered below.

Two ways the same person can get paid

Commission. The insurance company pays the agent once, when the contract is issued. Public industry data puts MYGA commissions at roughly 1% to 3% of premium (Wink data via InsuranceNewsNet). You do not pay it directly. It is part of how the product is priced, and it is why the contract has a surrender schedule.

Fee-only (advisory). The advisor charges you directly, most often a percentage of assets under management each year, sometimes a flat or hourly fee. If they place an annuity, it is usually an advisory version with no commission, and their fee is billed against the account or paid from your other money.

The 5-year math on $250,000

This is a hypothetical illustration, not a quote. Assumptions: $250,000 premium, a 5-year MYGA crediting 5.80% compounded annually (the low end of the range AnnuityRateWatch carrier data showed for A-rated or better 5-year MYGAs on September 24, 2026), and a 1% annual advisory fee charged on the year-end value. Taxes ignored.

Scenario	Paid by you	Value after 5 years
Commission-paid MYGA at 5.80%	$0 directly	$331,412
Same rate, 1% yearly advisory fee	about $14,540 in fees	$315,170
Difference		about $16,240

The gap is larger than the fees alone because each year’s fee also stops earning interest. The SEC makes the same point about ongoing fees in its investor bulletin on fees and expenses.

Two honest adjustments to that table:

Advisory MYGAs can credit more. With no commission to fund, some no-commission versions credit a higher rate than the commissioned version of the same product. That narrows the gap. Whether it closes a full 1% a year depends on the product, so ask to see both rates side by side.
A flat or hourly fee changes the picture. A one-time planning fee paid to a fee-only planner is a very different cost from 1% a year forever. If you want fee-only advice, ask what the flat-fee option costs.

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When fee-only is the better deal

You want ongoing management of a stock and bond portfolio, and the annuity is one small piece of it.
You value a fiduciary relationship across all your assets, not just product placement.
You would otherwise buy a long-surrender, high-commission product you do not need. A good fee-only planner who talks you out of that has earned the fee.

When commission is the better deal

You are buying a single MYGA and plan to hold it to the end of the term.
You do not need anyone managing the money for the next 3 to 7 years. The rate is set by contract.
You are comfortable with the surrender schedule because this is money you will not touch.

For a set-and-hold MYGA, paying 1% a year for management of a contract that needs no management is hard to justify. For a whole retirement plan with moving parts, it can be worth it.

What to watch for either way

Fee on top of commission. An advisor who charges an asset fee and also receives a commission on the same money is being paid twice. Ask directly.
Term matched to pay, not to you. Longer terms usually pay more. If you are being steered to 10 years when you asked for 5, ask why. More on that in why commissions vary by term and age.
Disclosure. In California, an agent recommending an annuity must disclose how they are compensated, and must give an estimate of the amount on request (Insurance Code 10509.9204). Fee-only advisers registered with the SEC or the state disclose fees in their Form ADV.

Bottom line

Commission is not a dirty word, and fee-only is not automatically cheaper. For a single MYGA held to term, the commission model usually leaves more money in your contract. For ongoing management of a larger portfolio, a fee can be worth paying. Put the two numbers side by side and decide on the math.

Compare current rates on the best MYGA rates page or see how a MYGA stacks up against a bank product in annuity vs CD.

See the commissioned and no-commission math for your amount

Numbers first, then decide.

Send your amount and term and I’ll send current MYGA quotes with the commission range disclosed, so you can compare them against any fee-based offer you have.

Rather talk it through? Or book 15 minutes on Hans’s calendar, or call 213-414-2808.

Hans Goldstein · 213-414-2808 · NPN 20602398, independent licensed insurance producer appointed with multiple carriers

We’ll email it to you. Hans replies within one business day. Privacy Policy.

Frequently Asked Questions

Is a fee-only advisor cheaper than a commission-based annuity agent?

Not automatically. On a single MYGA held to term, a 1% annual fee usually costs more than a one-time commission the insurer pays. Fee-only can be worth it when you want ongoing management of a larger portfolio.

How much does a 1% advisory fee cost on a $250,000 MYGA over 5 years?

In our hypothetical illustration at 5.80%, about $14,540 in fees and roughly $16,240 less in ending value, because fees taken each year stop earning interest. Your numbers will differ with the rate and fee method.

Do no-commission annuities pay a higher rate?

Some do, because there is no commission to fund. Ask for the commissioned and advisory rates on the same product so you can compare the net result after any advisory fee.

Can an advisor charge a fee and also take a commission on my annuity?

Some hybrid advisors can be paid both ways. Ask directly whether any commission is paid on money you are also paying a fee on, and get the answer in writing.

Does the commission reduce my MYGA rate?

Commission is one of the costs the insurer prices into the product, so it affects the rate in general. It is not deducted from your premium, and your contractual rate does not change after issue.

Sources

Hans Goldstein, CA Insurance License #4273294, NPN 20602398 · Goldstein & Co. LLC dba Goldstein Insurance Services, CA License #6016830 · 213-414-2808 · hans@hansgoldstein.com

This article is general education about how annuity sales are compensated. It is not tax, legal or investment advice and is not an offer or recommendation for any specific product. Commission ranges cited are from the public sources listed above and vary by insurer, product, term, issue age and state. The dollar illustration is hypothetical, uses stated assumptions and is not a quote. Guarantees in a fixed annuity are contractual and are backed by the financial strength and claims-paying ability of the issuing insurance company. Annuities have surrender charges and other limitations; read the contract and disclosure before you buy. Consult a tax professional about your situation.