Are you interested in starting a profession as an insurance agent, then, you might be asking yourself, How much do insurance agents earn? Usually, demand for an insurance agent is very high. They always make a sufficient amount of money for themselves. In this article, I am going to answer all the questions you have about how much do insurance agents make.
How Much Do Insurance Agents Make?
You will have answers to the question of how much do insurance agents Make when you finish reading this article. Insurance policies will protect people and businesses and give financial protection for accidents. Not only that, natural disasters, illness, and many more unexpected events might happen in the future. Usually, the insurance agent’s job is to explain all the details about policies and guide customers to choose the appropriate policy they need. In short, they promote and sell insurance company policies to the customer.
In 2018 average earning for an insurance agent were 50,600 dollars per year and 24.33 dollars for an hour, according to Bureau of Labor Statistics in the U.S.A. How much does an insurance agent make? It depends on according to various factors. You may first have to determine what sort of insurance agent you would prefer to be. However, making the right decisions will result in making over six figures amount.
What are the Factors Decide an Insurance Agent’s salaries?
Every insurance agent does not get a salary of six figures. Therefore, the average amount of insurance agents earn isn’t what all agents on this job make. I have included 4 factors that will decide on an insurance agent’s salary.
What Sort of an Agent He Choose to Be
According to what sort of agent you choose to be, the amount of money you earn varies because there are few differences in how these agents work. In the U.S.A, there are 2 types of insurance agent lives.
- Captive Agents
- Independent Agents
Who are Captive Agents?
Captive agents work for one particular insurance firm. They have the benefit of free marketing from the insurance firm, and they usually work inside of the office full of office equipment. Being in a workplace with other agents will help you gain a wealth of experience too.
A captive agent can only sell only one insurance policy. Because, they work for one insurance firm, and they can only provide insurance policy their company offers. They can’t refer clients somewhere else even if they couldn’t sell their policy. Therefore making a sale will be pretty tough.
How Captive Agents Get Paid?
Captive agents usually earn money through sales commission in addition to the basic salary they get from insurance firms. They will receive a commission in between 5% and 10% of the auto and home insurance policies they sell. But, their commission percentage is 10%, 8%, and 6% for the first three years of an insurance policy. They will also receive a renewal commission when their clients renew the policy and performance bonus from their insurance firm as well. Some insurance firms generally give 20% of the captive agent’s revenue.
Who are Independent Agents?
They work for themselves, and usually, independent agents work from home or from a small workplace, which they pay for themselves. There is no marketing help, and they can’t wait sitting in front of a phone waiting until leads to come in. They have to go out to find clients for themselves. But, I must tell you they have countless opportunities to develop and improve their business.
Not like captive agents, independent agents can sell quite a lot of insurance policies from several insurance companies. Due to their independent work, they provide an extra personal level of service to their clients. Additionally, they can search for the best available insurance products for their clients shopping around insurance firms instead of selling one firm’s product.
Starting as a new independent agent is a bit of a difficult task. When they began, there will be a financial burden, and it may be tough to get appointed by insurance firm because they are fully commission based. Yes, you should have a pretty decent business plan from the start in case you wanted to be appointed by the insurance firm.
How Independent Agents Get Paid?
Like captive agents, Independent agent’s primary earning method is commission. Usually, an independent insurance agent’s commission rates are more significant than captive agents. Because insurance agent commission rates are a little higher than (15%) captive agents. their commission percentage is 15% when it comes to renewal commission percentage. It doesn’t change, and the rate stays the same. So more policies they sell more money they make. Unfortunately, they don’t have any performance bonuses like captive agents.
In conclusion, it is fair to say being a captive agent for less experienced insurance agents will be beneficial. Also, if you have all the experience as an insurance agent, then being an independent agent will be the right choice. But, deciding on what sort of an insurance agent that you wish to depend on your current situation and career targets.
What Kind of Insurance Policies Insurance Agent Provide
Our second factor which decides an insurance agent’s salaries is a kind of insurance policy he chose to provide to clients. Every insurance firm supplies its unique insurance policies and opportunities to attract customers. Because more clients they attract more increase their earning.
From selling auto and home insurance policies, an insurance agent will earn a commission from insurance policy premiums. Not only that, but they will also have a commission when clients renew their policy.
However, health and life insurance commission structure works a different way when they sell a policy. Agents will have a more massive commission from selling insurance policies. Also, they will have a cheap commission fee when clients renew their policy for the first three years. But, after three years, many insurance agents won’t have a commission on the policy renewal.
How Location Effect On
Locations, where you work as an insurance agent, have a significant impact on your salary. Cost of living, accident rates, crime rates, health statistics, and local statistics these things will have a considerable effect on the insurance rate. Therefore, it will cause fluctuations in the size of Insurance premiums and quantity of agent’s commission.
A location with a larger population area means higher competition between insurance agents too. Still, it will also help find more clients due to the broader population. It is essential to take into account your required wage and life-style earlier than deciding the place you wish to work as an insurance agent.
How Commission Effect on
Another vital factor that has a significant impact on your yearly salary varies according to your commission rates. As I mention, earlier independent agents earn more commission than captive agents. The average commission for an independent agent is 15% of the insurance policy. But, the captive agent will only get 5-10% of the percentage for selling commission.
What are the Requirements to be an Insurance Agent?
If you want to become an insurance agent, then you should understand education matters than formal training. Insurance agents do not want education beyond high school. However, having a bachelor’s degree will benefit your career. All insurance agents should have a license within the states where they work.
However, when agents first start there training, they will always learn from other insurance agents. Shadow other agents will help them understand the requirements and duties. Meanwhile, continue your education as long as possible. According to, insurance policies they sell agents also want to get a separate license. Some states in the U.S. you should have complete specific courses and state exam covering fundamentals and laws.
Qualities You Need
- Communication skill
- Analytical skill
How Much Do Insurance Agents make? I think now you know the exact answer to this question. However, for many different occupations within the U.S.A, insurance agents have an excellent fee and payment outlook. Therefore, that may expect to grow close to 10 percentages by 2030. Demand for the position as predicted; it will stay regular.
New technologies like automation features have made insurance agents work easy. The latest technology will help promote your insurance policies and maintain a good relationship between your customers in the future.