AOV (Average Order Value)
The average premium or commission value per sold policy — used to compare productivity across agents, campaigns, or periods.
Full Definition
Average Order Value (AOV) in insurance is the average premium or FYC per sold policy. AOV matters because two agents with identical close rates can have very different revenue: a Final Expense agent selling $75/mo policies produces ~50% more commission than one selling $50/mo policies at the same close rate. AOV is driven by needs assessment depth, face-amount recommendation skill, carrier selection (some carriers rate more aggressively for the same profile), and upsell discipline (term-to-whole-life conversion, ancillary attach). Benchmarks (annual premium AOV): Final Expense $600–$900, mid-market whole life $2,500–$6,000, IUL $6,000–$15,000+, Medicare ACA no-premium-to-consumer (measure AOV in commission terms instead).
Example
Agent A sells 18 Final Expense policies at $58/mo avg (AOV $696 annual premium, $696 FYC at 100%). Agent B sells 18 at $82/mo avg (AOV $984, FYC $984). Same close rate, 41% more commission.
Related Terms
- FYC (First Year Commission) — The commission an agent receives on a policy's first year of premium — the largest single income event per policy in most insurance lines.
- Close Rate — The percentage of contacted (or delivered) leads that result in a sold policy — the primary profitability driver in insurance lead generation.
- LTV (Lifetime Value) — The total expected commission (FYC + renewals) from a policy or client over the full duration of the relationship.