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?
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Posted: Fri May 25, 2012 06:44 pm Post Subject:
Can we start from moonlighting as an insurance agent? Have a full time job, but wanted to explore other opportunities. How can we start?
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Posted: Thu Feb 21, 2013 03:25 pm Post Subject: The article above
The person that wrote the article above has zero idea of how the insurance business works. It's unfortunate when someone scribbles out a bunch of nonsense on a topic and then publishes it to the internet trying to pass as an expert. First she says that agents only receive commission for the first year of a home or auto policy and then she says they can receive 2%-5%. Wrong and wrong. She goes on to state the commissions can be as low as 8% (unlikely unless you're buying a workers comp policy. Most nonstandard commission is at least 10%) and as high as 15% (Preferred home policies are usually just under 20% commission). Many companies will offer trips for production (the trip will cost a very small percentage of the total written premium) and yearly bonuses (which are hard to qualify for and are based on your loss ration).
99% of what is written in Sil's article makes no sense and please do not use it as reference.
Posted: Fri Mar 08, 2013 11:28 am Post Subject:
You see (and hear) the agent salary question pop up at lot. The bottom line is that is just like most small business and sales models. Meager beginnings with lots of upside.
There is a high churn rate with new agents just because not everyone is cut out to be in sales. With a good work ethic and honing your sales and marketing chops you can build a strong book of business and make a very good living.
Posted: Sun Mar 31, 2013 06:10 am Post Subject: What to do
Insurance company telling people I still work for them. That's a lie, they were taking money in my name police got my money back, my account was over draft.
Posted: Sat Jan 04, 2014 09:01 pm Post Subject:
They do make lot of money earlier but nowdays there is so much restriction as company does not have anything hidden from the client as there is lot of competition these days so agent are now earning much less than they earned a decade ago
Posted: Tue Jan 07, 2014 02:13 pm Post Subject:
I cannot tell about others but auto insurance agents make good given the fact that having a policy is mandatory for car owners. So may or may not someone get a life insurance. But someone who has a car, would definitely need an insurance...
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