Rule of 78 and Rule of 108: Life and Health Credits
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Time to read: 6 minutes Best for: Owners, office managers and team members tracking Life and Health premium toward a yearly goal
The Rule of 78 and the Rule of 108 are how Agency Edge counts Life and Health premium toward the year. Under the Rule of 78, a Life policy credits one twelfth of its annual premium each month for 12 months, starting the month it issues. Under the Rule of 108, a Health policy credits half its annual premium when it issues and the other half six months later. This is not the Rule of 78s loan-interest method — that one is about loans; this is about sales credit.
The short version: the issue date, not the premium, decides how much of a policy counts this year. Below is how each rule works, as Agency Edge models them, with worked examples. If you work in a captive office and chase a yearly Life or Health premium goal, this is the math behind why a December sale barely moves this year's number.
What is the Rule of 78 for Life credits?
A Life policy's annual premium is split into 12 equal monthly credits. The first lands in the month the policy issues, and one more lands each month after that until all 12 are in. Whatever lands after December 31 is carryover: it counts next year, not this year.
So a Life policy issued in January credits all 12 months this year. One issued in December credits one.
Example: a $1,200 Life policy, which credits $100 a month.
| Issue month | Months credited this year | Counts this year | Carryover to next year |
|---|---|---|---|
| January | 12 (Jan–Dec) | $1,200 | $0 |
| March | 10 (Mar–Dec) | $1,000 | $200 |
| July | 6 (Jul–Dec) | $600 | $600 |
| October | 3 (Oct–Dec) | $300 | $900 |
| December | 1 (Dec) | $100 | $1,100 |
Every row adds up to the same $1,200. Unless a chargeback stops it, the whole premium counts; the issue month only decides which year it counts in.
What is the Rule of 108 for Health credits?
A Health policy's annual premium is credited in two halves: one in the month it issues, the other six months later. A Health policy issued by June gets both halves this year. One issued from July on gets only the first half this year, and the second half is carryover.
Example: a $2,000 Health policy, which credits $1,000 at a time.
| Issue month | First half | Second half | Counts this year | Carryover to next year |
|---|---|---|---|---|
| January | January | July | $2,000 | $0 |
| June | June | December | $2,000 | $0 |
| July | July | January, next year | $1,000 | $1,000 |
| December | December | June, next year | $1,000 | $1,000 |
There's no sliding scale here. Moving the issue date from June to July halves what counts this year.
What do Received, Scheduled, Full year and Carryover mean?
Agency Edge sorts every credit into four figures:
- Received — credits dated today or earlier, from issued policies.
- Scheduled — credits dated after today and by December 31.
- Full year — Received plus Scheduled. Once the year is over, it reads Final total.
- Carryover — credits from this year's policies that land next year.
Example: at the end of June, the $1,200 Life policy issued in March has $400 received (March to June) and $600 scheduled (July to December), for a full year of $1,000, with $200 of carryover.
A policy that's written but not yet issued has received nothing. With Include written, not yet issued switched on, its credits this year count as Scheduled, placed from its written date — never as Received. A sale marked Will not issue stays off the page.
Why do late-year Life and Health sales count for less?
Because less of their schedule fits before December 31. When you set a premium goal, Agency Edge shows the gap — the goal less the full-year figure — and the new policies needed: the gap divided by what an average policy would still credit this year. That is why, late in the year, the page asks for much more new premium than the gap.
Example: with a $1,000 Life gap in November, a $1,200 Life policy issued that month credits November and December — $200 this year. Closing the gap takes five of them: $6,000 of new premium, of which $5,000 is carryover.
How do you plan the year around the rules?
- Set a premium goal for each product. The goal is the product's Premium ($) goal for the year, on Office Goals in Settings, Goals tab. See Set your yearly goals.
- Watch the issue date, not only the written date. The earlier in the year a Life or Health policy issues, the more of it counts this year. A Life policy written in November that issues in January credits all 12 months next year.
- Read carryover as next year's start. Those credits aren't lost; they land next year.
- Check the pace. Agency Edge projects where the year lands at today's pace — see how annual goal projections work.
- Look at each line on its own. Life and Health follow different rules, so track them apart — see production by product. Credit follows the person who wrote the sale; see what production credit is.
What happens to the credits after a chargeback?
A chargeback stops a policy's credits from the chargeback date on, so the rest of its schedule, carryover included, never arrives.
Two words to keep apart: on the pay side, "carryover" means something else — see Chargebacks and carryovers. The Life and Health credits here don't read commission plans or Payouts. For pay, Agency Edge has its own commission tracking software.
How does Agency Edge show the Rule of 78 and 108?
The Rule of 78/108 page has a Rule of 78 tab for Life and a Rule of 108 tab for Health, and works out each policy's credits from the issue dates in your sales. It shows Received, Scheduled, Full year and Carryover, then credits by month, a running total against your goal, and a table of credits by issue month.
Walkthrough: Rule of 78 and 108
Frequently Asked Questions
What is the Rule of 78 for Life credits?
As Agency Edge models it, a Life policy credits one twelfth of its annual premium each month for 12 months, starting the month it issues.
What is the Rule of 108 for Health credits?
As Agency Edge models it, a Health policy credits half its annual premium when it issues and the other half six months later.
Is this the same as the Rule of 78s for loans?
No. The Rule of 78s is a loan-interest method. Here, the numbers just name the two tabs; Agency Edge doesn't multiply anything by 78 or 108. The sums are 12 monthly credits for Life and two payments for Health.
How much of a December Life policy counts this year?
One twelfth. A $1,200 Life policy issued in December counts $100 this year and carries $1,100 into next year.
When does a Health policy count in full this year?
When it issues by June. Both halves then land by December 31. A Health policy issued from July on counts half this year and half next year.
What is carryover?
Credits from this year's policies that land next year. They count toward next year, not this one.
Why is a policy missing from the page?
Most often it has no issue date. Turn on Include written, not yet issued, or add the issue date in the sales log. A sale marked Will not issue stays off the page.
Who can see the Rule of 78/108 page?
The owner, and a Custom member when Rule of 78 / 108 is ticked in their permissions. A Basic member can't.
Can Agency Edge work this out for me?
Yes. The Rule of 78/108 page works out each Life and Health credit from your sales and shows what's received, what's scheduled and what carries into next year.
See your Life and Health credits, month by month
Agency Edge works out every Life and Health credit from the issue dates in your sales, so you can see what's in, what's coming and what carries into next year.