Understanding Client Lifetime Value in Medicare Sales

As a Medicare agent, one of the most important things to understand is the lifetime value (LTV) of each client. Commissions aren’t just about the first sale — renewals, persistency, and cross-selling opportunities all add up to long-term profitability.

Let’s break down the numbers for 2025 and beyond.

Medicare Advantage (MA) Plans

• Initial Year Commission (2025): ~$611 (national max, varies slightly by state/region)

• Renewals: ~$306 per year, as long as the client remains on the plan

• Average Retention: 6–7 years (4–5 years for conservative estimates)

LTV Example (5-year retention):
$611 (Year 1) + $306 × 4 = $1,835

Prescription Drug Plans (PDP)

• Initial Year Commission (2025): ~$100

• Renewals: ~$50 per year

• Average Retention: 3–4 years

LTV Example (3-year retention):
$100 (Year 1) + $50 × 2 = $200

Medicare Supplement (Med Supp)

• Commission: Typically 15%–22% of annual premium (decreases after year 6–7)

• Average Annual Premium: ~$1,800–$2,200

• Year 1 Commission: ~$270–$400

• Renewals: ~$150–$250 annually depending on persistency

• Average Retention: Often 8+ years

LTV Example (7-year retention at $300 first year, $200 renewal):
$300 + ($200 × 6) = $1,500

The Big Picture for Agents

• MA Client: ~$1,500–$2,000 lifetime value

• PDP Client: ~$200–$250 lifetime value

• Med Supp Client: ~$1,500+ lifetime value

And here’s the real kicker: when you cross-sell ancillary products like Hospital Indemnity, Dental/Vision/Hearing, or Life Insurance, the LTV per client can easily double.

Why LTV Matters

Understanding lifetime value helps you:

• Prioritize your time and marketing spend on the most profitable opportunities.

• Build stronger, longer-term relationships that maximize renewals.

• Identify cross-selling opportunities that boost both client satisfaction and revenue.

Successful agents don’t just think about today’s commission — they build strategies that maximize value over the life of every client relationship.

Partner With PSM Brokerage

At PSM Brokerage, we equip agents with the tools, resources, and support to grow their Medicare business with confidence. From compliance-ready marketing materials to training, CRM tools, and lead support, we help you maximize client lifetime value while staying focused on what matters most — building lasting relationships.

👉 Ready to grow your Medicare business? Schedule a call with us today and let’s build your AEP strategy together.

⚠️ For Agent Use Only. Not for distribution to consumers. Not connected with or endorsed by the U.S. government or the federal Medicare program.