How do insurance agents make money
If you have ever considered going into insurance sales you have to ask yourself; How do insurance agents make money? There are a few ways to answer that question. Insurance agents make money through insurance policy sales.
Because there are different types of agents, they make money in different ways. We will explain the types of agents below:
Independent agents –
Their pay comes directly form the insurance carrier in the form of commission. If the agent works alone with no agents under them, they are street level. If an agent is Street level, that is the amount of commission they receive. There are many levels of independent agents. and the level they are on will determine the amount of commission they make. These agents own their book of business and receive renewal commissions if the policies they sold are renewed.
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In most cases, these agents receive pay in the form of commission. They usually do not receive full street commission, because the company they represent keeps a percentage of their earned commission. Much of the time, these agents do not own their book of business and will not receive renewal commissions if they leave the agency they are contracted with.
How do insurance agents make money: General Agents (GAs) or Managing General Agents (MGAs) –
These agents recruit, train and support other agents. Both GAs as well as MGAs receive an over ride commission from the insurance carriers on any business produced by the sub-agents they manage. If you are an GA or MGA you will enter into a contract with your sub agents and the contract will state who owns the book of business that is produced by the agents. This can either be the GA/MGA or the selling agent.
How do insurance agents make money: Direct writing agents –
Agents who work for a specific company are direct writing agents. In most cases, they receive a salary for selling one company’s insurance products. These agents do not normally receive commissions. The company the agent works for owns the book of business and therefore, the company receives all new and renewal commissions for policies the agent sells.
How do insurance agents make money: The amount of commission you make is determined by the type of plan you sell:
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