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: Wed Apr 28, 2010 11:21 pm Post Subject:
You need to attend a school that has been appointed by your state insurance department to train you as an agent. Once you complete the required in-school hours, then you take a state exam.
Not all states require insurance prelicensing education, but all states require that you pass an examination. There are roughly a dozen states that don't require any prelicense education in order to get a license. Other states allow you to test prior to taking the education, but you'll have to prove that you met the educational requirement prior to issuance of a license.
To get specific, we need the state.
InsTeacher 8)
Posted: Wed May 05, 2010 01:07 am Post Subject:
how much commission do agents pay their producers
Posted: Sat May 08, 2010 12:46 pm Post Subject:
how much commission do agents pay their producers
Did you mean how much do insurers pay their agents/producers?
Depends on the product and the producer. Life insurance, with commissions and bonuses, can pay more than 100% of the first year premium as first year compensation. May or may not pay renewal commissions in subsequent years.
Disability/Health insurance is around 20-25% first year, and pays renewal commissions in subsequent years.
Property & Casualty varies with the product, auto, home, business, commercial, etc. Figure between 15% and 25% first year, with renewal commissions.
If you really did mean how much do agencies pay their producers, the answer is often somewhere between 50-75% of the agency commission (which might not include bonuses or incentives), depending on experience and how much the agency needs to support a producer's activities. One might have to pay a "desk fee" or for leads, both subtracted from one's commissions.
Posted: Sun May 09, 2010 11:42 am Post Subject: hours?
What kind of hours does an insurance agent work? Im looking for a desk job in CS perhaps. Does this require weekends? Im tired of working Saturday and Sunday!
Posted: Sun May 09, 2010 02:01 pm Post Subject:
Well, perhaps the insurance industry is not the best choice for you. Because our industry is customer-focused, we agents tend to work every day of the week, as needed. That's not to say that we work 168 hours a week, and some of us only put in 20-30 hours across those seven days.
But most agents, especially those of us who are interested in writing new business, will do appointments during the day, at night, on the weekends, what ever is most convenient for our clients. I've met with clients at 3:00am because it fits their schedule best, and I have driven over 100 miles one-way to meet with a client. Why not? It's not about me, it's about them.
If you're looking for a desk job, Mon-Fri, in an insurance agency not open on the weekend, I'm sure you'll eventually find one. Just don't expect to be highly compensated.
Posted: Sun May 09, 2010 02:10 pm Post Subject:
Yeah, well I'm still new at this. Perhaps I shouldn't have siad agent. And yeah, looking for a desk job. My family owns and runs an insurance office, unfortunately with the economy they can't afford another person. And you're right being an independent isn't right for me. With a baby on the way I probly couldn't afford the long hours right now.
I'm just wondering what it takes to get an entry level cs job. I'd still feel like I would be helping people with important matters. :) thanks for the reply.
Posted: Thu May 13, 2010 10:19 pm Post Subject: Buying an agency
How much could I expect to pay for an insurance agency that has been in business for over 40 years at the same location with about a 3000 book of business. Is there an industry standard of what the company would be worth
Posted: Tue Jun 01, 2010 10:36 am Post Subject:
I hope there are a couple of other factors that must be taken into consideration while deciding about an agency. Merely being in business for 40 years doesn't count. You should also consider factors like the latest achievements, competitors, nature of products etc.
Posted: Thu Jun 17, 2010 01:42 pm Post Subject: ways of increasing insurance penetration
help me with some ways
Posted: Mon Jun 21, 2010 09:37 pm Post Subject:
They make a million dollars!
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