To know how an insurance agent earns, you must be aware of their mode of work. Based on how they work, insurance agents are broadly classified into two types:
- Captive agents - Those who represent a particular insurance company.
- Independent agents - Those who sell insurance products from various insurance companies.
How much do the Captive agents earn?
Captive agents are employees of an insurance company and usually have fixed wages. The initial few months would be the training and learning phase for such an agent. Thereafter, the insurers usually set a target for each agent which has to be fulfilled within a pre-determined time period. According to his or her performance, his or her salary gets revised. There might even be a scope of earning performance bonuses, after the agent meet the target. The salary structure usually depends on a number of factors like the location, the company etc.
TopHow much do the Independent agents earn?
The independent agents represent multiple companies. They don't get a fixed remuneration from the insurance companies. They usually receive a percentage commission from the insurer, which depends on the amount of insurance they sell. Moreover, revenue is only generated on sale of new policies. Thus, to earn more, the agents need to sell more insurance policies.
TopWhat is the range of income?
The average income of an insurance agent is around $62,970 for a year, as the May 2011 reports of the Bureau of Labor Statistics have pointed out. However, since the individual income is generally based on the commissions earned, skilled agents having a large number of clients can earn much more than the BLS mean. The yearly income of around 50 percent of the agents ranges from $33,850 to $72,490, with the experienced ones earning as high as $115,300 on an average per year or even more than that.
| Employment | Annual mean wage | Annual median wage |
|---|---|---|
| $3,21,780 | $62,970 | $47,450 |
| Area Names | Employment | Annual mean wage | Annual median wage |
|---|---|---|---|
| Arizona | $6,390 | $51,980 | $40,750 |
| California | $23,890 | $75,140 | $59,240 |
| Florida | $26,940 | $59,420 | $46,530 |
| Kansas | $4,070 | $56,010 | $45,130 |
| Nevada | $2,250 | $51,580 | $35,640 |
| New York | $18,580 | $74,890 | $57,180 |
| Texas | $26,490 | $57,820 | $40,630 |
| Washington | $5,830 | $54,710 | $46,770 |
How much can be the agent commission?
The independent agents working for the insurance companies usually earn from the commissions after each policy sale. The agent compensation is usually paid only for the initial year of a new policy. The agents selling homeowner's insurance and auto insurance receive around 10 to 15 percent commission on the first year's policy premiums. The allowed compensation depends on the insurers though, and can be as low as 8 percent or as high as 15 percent. Life insurance agents earn a lot more, typically in the first year only. They usually receive most of the premium that the policy holder pays in the first year, or even all of it at times.
TopIs there a scope for earning more?
Apart from the standard commissions which solely depend on each individual agent's performance, the insurance agents have the scope of earning more if the client renews the coverage. The renewals commissions typically range between 2 to 5 percent for each policy.
Along with that, any insurance companies also offer year-end bonuses and non-cash rewards like trips and prizes for the insurance agents.
TopReading discussions & reading
- Qualifications you need to be an insurance agent
- How to become an insurance agent
- Can you make millions as an agent?
- What are the commission opportunities of an agent?
- What makes insurance agents click in the industry?
Posted: Tue Nov 13, 2007 05:13 pm Post Subject: how much do you make selling insurance ?
Hi scottdwayne7,
Thanks for the question, but it is a very broad one.
The short answer would be that a good insurance agent will make as much as he/she really wants to make.
An insurance agent just starting out with a "captive" company will normally be guaranteed a certain income for the first few months. This period allows the agent to learn the insurance company and the insurance products being offered. Normally at the end of this "guaranteed" period, the agent must have produced sales to at least equal the guaranteed starting income (commissions).
Now, do insurance agents make good money ?
In a situation where an agent works for an independent agency, normally the pay structure is "commission only", but this agent may have access to several thousand established insurance customers. This situation certainly helps in the most difficult area of being an insurance agent - prospecting.
Some insurance agents just want to work on their own and actually be independent agents themselves. I think this is the most difficult way to start an insurance career because it is usually just commissions from new sales and the agent may or may not be furnished prospective customers by the insurance carriers.
How much an insurance agent makes also depends on the lines of insurance in which he/she works. For example - property and casualty insurance may pay a 12-15% commission, while a life insurance contract may pay as high as 100% commission.
I personally know insurance agents who make in excess of $1 Million per year and I also know agents who make $30,000 per year.
There is no ceiling on an insurance agents pay. In fact, most insurance agents I know make exactly what they think they are worth.
Posted: Tue Nov 27, 2007 11:51 pm Post Subject: how much do insurance agents make?
I think insurane maze just about covered the whole spectrum of it when he said that an agent generally makes what they think they are worth. I am a captive agent right now and my income has gradually increased over the last few years. I dont think I wouldve been able to do that working a salaried job. But the reason for the increase was not a larger influx of customers, it was my growing confidence in what I was doing. So he is very correct about that.
I read somewhere that when Jim Carey was fresh in his acting career, he wrote himself a check for 10 million dollars and put it in his wallet, knowing that one day he would be able to cash it. Hmmmmmmmmm maybe I should try that for insurance!!!
Posted: Wed Nov 28, 2007 06:03 am Post Subject: how much do insurance agents earn ?
I read somewhere that when Jim Carey was fresh in his acting career, he wrote himself a check for 10 million dollars and put it in his wallet, knowing that one day he would be able to cash it.
Wow!! I didn't know that. That proves how confident he was about his acting ability.
Anyways, after what Insurance Maze has already said I don't have much to add but your compensation will depend on a couple of things.
But, do insurance agents make good money ?
It will depend on the type of agent you are- captive or independent. If you are a captive agent you are entitled to a fix amount of remuneration over and above the commission you earn from the sales. But at the same time you lose the flexibility to earn from different policies. On the other hand, independent agency runs on ‘no sell, no commission' basis.
The company you are associated with. Typically an agent's commission depends upon the insurance company he is associated with. And all the companies have their own commission structure.
The type insurance you sell. It goes without saying that it's important to understand why people buy life insurance from you.
A life agent can earn around 30-50% (approx) commission on term life policies and about 90-95% upon the first year premium of the whole life plan.
Posted: Sat Feb 09, 2008 05:04 am Post Subject: how much do insurance agents earn ?
how much money do insurance agents make?? ..hmmm....well, you can make in six figures if you have been in this business for at least 10 years.
Posted: Thu Feb 14, 2008 07:10 pm Post Subject: how much money do insurance agents make ?
Initially I used to wonder how much money do insurance agents make !
When I first started out just over 20 years ago I make $50-$60,000/year. I am now a top advisor who does a broad range of wealth management as well for clients.
This week alone I will make $236,000 on new life insurance commissions. In addition I have 20 years of renewals and trailers from investments coming in each week.
If you can make it to the top it is very rewarding.
Posted: Thu Feb 14, 2008 09:54 pm Post Subject: how much do you make selling insurance ?
I'd say typical earnings for new agents who work hard range from $45 to 60K 1st year. Second year is probably 60K to $120K for hard workers.
Posted: Thu Feb 14, 2008 11:13 pm Post Subject: how much money do insurance agents make ?
And...if you are energetic, educated, spirited, creative, an entrepreneur and willing to take a bit of a risk...you could even make a half million to a million dollars per year.
You need to have a complete understanding of the inner workings of the internet and with some good help...you'll be there.
I happen to be all of the above...with the exception of having a complete understanding of the internet. Therefore I am not making a million bucks per year.
Posted: Fri Mar 07, 2008 10:03 am Post Subject: do insurance agents make money ?
I am attempting to find out more about the insurance field before I choose to dedicate my time and money. I know there are several different licenses one can obtain in the insurance market eg. auto insurance agent, life insurance agent etc. Which do most have and which do you suggest for someone wanting to making 1 million/year? Are some more profitable than others?
Posted: Sat Mar 08, 2008 04:59 am Post Subject: do insurance agents make money ?
If you want to make a million bucks, your best bet is to get a college degree (and enjoy the experience).
Become an expert on Internet marketing and understand the art of SEO.
Posted: Sat Mar 08, 2008 01:19 pm Post Subject: how much money do insurance agents make ?
If you want to make a million a year find out how to generate decent leads and start a lead company
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