LOA vs. Downline: Breaking Down Insurance Agent Structures

On a recent episode of the Insurance Business Babes podcast, hosts Kathe Kline and Joanna Wyckoff delved deep into one of the industry’s murkiest topics: understanding the differences between LOA (License Only Agent) and downline agent structures.

Their candid conversation revealed invaluable insights for agents at all stages of their careers. If you’re an agent wondering where you sit in the hierarchy—or considering building your team—here’s what you need to know.

Kathe and Joanna started by explaining contract levels in the insurance world. At the top, you have National Marketing Organizations (NMO), closely followed by Field Marketing Organizations (FMO) and Independent Marketing Organizations (IMO). While language can vary—sometimes even among carriers—the essential thing is that these layers represent how agents get contracted and where the commissions flow.

LOA, or License Only Agent, refers to agents whose commissions are paid to someone else first—be it an agency, call center, or another intermediary. Joanna shared eye-opening stories of agents who didn’t even know they were LOA, missing out on direct carrier payments and control over their own book of business.

Being an LOA might make sense if you’re receiving leads and support, but blindly allowing someone to take a cut without delivering value is a red flag. As Kathe pointed out, direct payment from carriers means you own your business and can enjoy maximum flexibility and income.

Downline agents are independent, paid directly by the carrier but often with an override commission going to the upline for training, mentoring, and support. The value is in the relationship and resources, not in controlling your payments. If you’re building a downline, be ready to provide more than just a contract—you should offer guidance and infrastructure.

Bringing on LOAs or downlines isn’t just about expanding your reach. As Joanna noted, “Your LOA’s family is depending upon you feeding them”—meaning if you promise leads or support, you must deliver. Without enough business to support another person, consider hiring a personal assistant instead.

Kathe and Joanna discussed creative compensation structures—like paying a flat amount per appointment plus bonuses for every sale. The takeaway? Build structures that incentivize performance while remaining fair and manageable for everyone involved.

If you’re thinking of scaling your agency, make sure you clearly understand (and communicate) the differences between LOAs and downlines. Set expectations, be transparent with payments, and never take on more than you can genuinely support. And remember: the most successful organizations are those built on strong relationships, fairness, and clear structure.

This episode is sponsored by ⁠CertifiedMedicareAgents.com⁠. Use the coupon code BABES2024 for a free lifetime BRONZE membership.