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: Sat Mar 08, 2008 06:44 pm Post Subject: how much do insurance agents make?
Which do most have and which do you suggest for someone wanting to making 1 million/year? Are some more profitable than others?
Please understand that there is a HUGE difference between "wanting to make 1million/year" and "doing what it takes to make 1million/year".
It is certainly a possibility, just ask Zig Ziglar.
The best money to be made off a single sale just might be a traditional or indexed deferred annuity. For example, with one particular company, a $100,000 annuity, will pay $9,000 in sales commissions.
Just 112 of these per year will generate your $1 Million.
Maze
Posted: Sun Mar 09, 2008 04:38 am Post Subject: do insurance agents make money ?
Companies that pay 9% commish put a tremendous surrender fee or other charges on their product. I always stay away from them.
Posted: Sun Mar 30, 2008 01:58 pm Post Subject:
Would you say a captive agent or an independent agent would make more their first year?
I am a new captive agent and I am curious what the average agent makes their first year.
Posted: Sun Oct 19, 2008 10:14 pm Post Subject: InsInvestigator comments
It is not clear to me what InsInvestigator actually does? Is he/she an agent or a Lawyer?
A Lawyer that prosecutes agents and also sells policies??? Sounds like a lot of bs to me.
I don't know if you make more than me or not? I also don't care. Sounds like a bs agent.LOL
Posted: Mon Oct 20, 2008 12:25 am Post Subject:
lisa - need to know more about your situation. Did you start out with zero policies on your books or did you buy a book a business? What is your commission schedule? Since you are new, did they give you a bump on your commission for the first year?
Posted: Mon Oct 20, 2008 06:01 am Post Subject:
It is not clear to me what InsInvestigator actually does?
Insurance investigators butt-in during a claim process when the insurance company suspects fraud. The insurance investigators are neither agents nor lawyers and as the name suggests they prove into the claim to dig out the truths about it.
The profile of the insurance investigators has gained prominence with the increase in the number of fraudulent claims that the insurance companies are receiving everyday. The insurance investigators stop the dishonest claimants to cheat the insurance company.
~Jeremy
Posted: Mon Oct 20, 2008 06:10 am Post Subject:
Jeremy, I think that the insurance investigators also play an important role in regulating the insurance costs. Let me explain my stand…
The business of insurance runs on people living in the same risk bracket sharing the cost of risks within. This is what determines the cost of premium. Now if the insurance companies spend their money in fraudulent claims that will also increase the cost of the coverage for all the individuals participating in the coverage program. Insurance investigators, thus, by investigating into the frauds are saving the insurance companies from losing money on bad businesses and also saving the society from paying more for less.
Posted: Mon Oct 20, 2008 06:16 am Post Subject:
A life and heath insurance agent is likely to make more as commission than the P&C agent provided both of them have written same amount of business. And in addition to the questions put forward by life the earning of agent will depend largely upon his/her abilities to sniff business as well.
Thanks,
Rupert
Posted: Wed Oct 29, 2008 05:03 pm Post Subject:
If you go out and are able to get agents to work for you then you can make a ton. If you can get a contract in the 100% range you can put agents under you for 80% or 90% and make a override everytime they sell something. That way you can have 10 guys selling and yourself.
Posted: Wed Oct 29, 2008 06:09 pm Post Subject:
I have been in insurance for only 6 months now and I only sell P&C. The BEST way to get business is to educate everyone on what an AGENCY is compared to a COMPANY. I would say 75% of people dont know the differnce. If you advertise that you have 10-15 differnt companies you go through for the cheapest rate... they will call you back about 80% of the time and buy your product about 75% of the time.
You can always be a dick and do an AOR (Agent of record). If you have that same company the person is currently with and you cannot find a cheaper rate, you can ask them if they would like YOU to be their agent, instead of the other one. All you would have to do is sell your personality and let them gain confidence in you.
Try getting a license in P&C and Life/health. Start building your book and get other Agents to like you, a lot! Eventually talk to them about buying their book of business when they retire.
Once you make enough money you should hire someone to quote everything for you and sell it. You should have a CSR where you are now so you dont have to do to much work after you sell it, so you can focus on the big picture... MORE MONEY!
only 6 months in= $265,000+
And thats not including the books of business I bought (an extra $320,000+)
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