Whether your agent only sells insurance products, or whether he sells securities such as stocks or mutual funds, etc, he is still getting compensated, albeit in different ways depending on how he has structured his fees.

The difference between the 2 financial service camps is simply that insurance agents can get paid a larger commission up front just once, versus a smaller one every year that your broker charges as you keep your funds with him, once again regardless if your monies go up or down.

Insurance agents selling annuities, by the way, are able sometimes to structure their commissions in the same way as securities brokers (this is known as a "trail basis”), collecting 1% annually as well. 

The difference here, however, is that the insurance agents commission is “never actually seen” in the client statement, whereas the mutual fund brokers commission is. This is a true reflection of the difference between the real nature of the 2 financial instruments, the former being designated as being an investment, the latter being designated as an insurance policy. 

Often you will hear insurance agents suggest that "you do not pay for the commission".

Although there is an element of truth to that suggestion (insofar as 100% of your payment earns the accredited interest rate or indexing credits) the reality is that the commission has already been built into the pricing of the policy, of course. It is simply not there to recognize.

A mutual fund salesperson, on the other hand, often charges his fee or commission right from your investment, so it is easier to see.

But in my years of experience, the average mutual fund guy and the average insurance guy probably get paid quite similar, although even this statement has significant variance.

After all, there are 15,000 plus annuities in the US as well as probably half of that amount (7,000 or so) in mutual funds, each with a different level of compensation.

 http://money.usnews.com/money/personal-finance/mutual-funds/articles/2013/06/10/are-there-too-many-mutual-funds

The tangible consideration or consumers when purchasing an annuity is to analyze the contracts terms and make a determination on that basis first. If a prospective annuity purchaser is “paranoid” of a commission being paid to an agent, that is a sign that the contractual terms being presented are simply not attractive enough to merit action in and of themselves. And in this case, the annuity shopper is sensing that the agents own financial needs are superior to his or hers. This sentiment is not uncommon and has been a detriment at times to the annuity industries reputation.

 Typically, the longer the annuity term, the higher the commission. That is not necessarily a bad thing, since a longer term annuity may provide more opportunity for the insurer to offer higher interest as well as higher index crediting rates. My experience in the annuity world tells me that, on average, an annuity agent would make 1/2% a year on a deferred annuity contract, if he chose to take his commission annually.

I would add that high surrender charges, sometimes, but not always, can indicate a high commission annuity. (Sometimes the surrender charges reflect large bonuses that the insurer provides to the owner as well). But this is a consideration for those fearful of a "loaded, or inferior" product.

Surrender charges only come into play by the way if you cancel your contract prior to its term or withdraw more than the annual liquidity provisions allow.

To conclude, far more important than the issue of the agents commission are the features and benefits of the contract you are studying.

Keep studying to get comfortable with the subject of annuities !