How much do insurance agents make

By Ed Crowe | General Article | 0 comment | 25 January, 2017 | 0

How much do insurance agents make?

The question “how much do insurance agents make?” is very broad. There are various answers depending on the type of insurance they sell. The abilities and work ethic of the agent also make a difference. The first thing to consider is that 90% of people fail trying to make it in the insurance business. While the percentage is high, it should not discourage people from the business. The overwhelming reason people fail is lack of preparation, realistic expectations and work ethic. If you plan and are willing to work hard, you can become a successful insurance agent.

How much do insurance agents make : types of agents

The next factor to consider is the type of agent. Independent brokers/agents make an average of $87,000 a year. Career agents (agents that work for one company) make an average of $57,000 a year. Having been an insurance agent since 1998 and owning an agency since 2007, I can provide some prospective here. Independent agents that last more than 5 years, make well over $100,000 a year. They build a large renewal stream of income and as a result are able to see their income increase every year without needed to work harder. This also depends on the type of insurance being sold. We tend to favor products that pay higher renewal or level commissions for the life of the product. Agents offering these product types will usually make substantially more money over time due to the recurring revenue.

Types of insurance you will be selling

The type of insurance being sold is also a factor. Some insurance plans pay almost all of the commission up front. Examples are term and Universal Life insurance (UL), final expense (FE) and annuities. While some UL and FE pay renewals, they are usually very low percentages. Other products are more renewal based such as Medicare, Health Insurance, Long Term Care (LTC)*, Whole Life and Universal life policies. Agents selling more renewal based products will make much less in the first 5 years but will make substantially more after that.

Commission levels

Commission levels are standardized on some products such as Medicare Advantage and part D plans (Click for Medicare advantage and Part D rx commissions). (Click for CMS commission site) Other products have set levels that are commonly paid to an agent (called street commission). I am generalizing a great deal here but the going rate for life insurance is usually around 75% to 95% street depending on the company and product type. Final expense runs in the 90% to 110% depending on the company. It is much harder to get a base line on things like health, dental, vision, short term health and other ancillary lines. They tend to vary a great deal depending on the company.

* A number of LTC carriers have recently left the business and/or have stopped paying agent commissions. Please call our office for a list of current LTC companies still paying agent commission.

Agent Contracting

Crowe and Associates pays full (street level and higher) commission on all Medicare, Life, Health, LTC, Final Expense, Dental, vision and annuity contracts. Agents only need to fill out document to contract with any carrier they want. No need for additional paperwork when adding any new carriers. CLICK HERE FOR CONTRACTING