Salary of insurance agent
If you want to enter into insurance sales, the first thing you might ask about is salary of insurance agent. There are a few different types of insurance agents. The type of agent you are is one factor that determines the amount and method of receiving your pay. Technically, unless you are a captive agent who works for a specific insurance carrier, you probably do not receive a salary. In many cases, insurance agents work on commission alone. Because of this, your pay will directly reflect the amount of time and effort you put in.
Different types of agents:
The first type of agent is a Captive agent. There are some benefits to being a captive agent such as; you may receive a salary in addition to or in place of a partial commission. You also receive the benefit of an insurance company supplying your leads. That being said, there are also disadvantages to being a captive agent such as; you are limited to the plans you can offer your client and the plans you have access to may not always be the best suited to your client’s needs. In this instance, if you receive any commission, it is only a portion of the full street commission.
Another type of agent is an Independent agent. These agents are self employed and can work with a number of different carriers with many plan options. Because of this, they can find a plan that suits their client’s needs best. Although, this means they must do their own marketing. These agents must be very self motivated and have the opportunity for unlimited success.
Renewals on commissions:
In most cases, captive or company agents will not receive renewal commissions on clients. They usually have a salary and bonus structure. The bonus is based off production for the current year. Renewal payments are not usually part of the compensation package.
Independent agents do not get a salary or bonuses (No bonuses for MAPD and PDP) but they do get the full street commission. They will also get the full renewal payment on current clients. Renewals can add up to a substantial amount of money.
The amount of commission you make depends on which plan your client chooses.
Home and auto insurance agents make a percentage of the policy’s premium. They also receive a percentage based commission when the client renews a policy. Because most people purchase these policies, there is potential for a good income form the sale of these policies.
Because Crowe and Associates focuses it’s business on health (mainly Medicare) and life insurance, we will go into more detail on the commission for these plans. We also give agents access to final expense, LTC, annuities, dental, vision and HealthShare plans.
Commissions for Life and health insurance sales are not the same as with home and auto policy sales. The agent makes the greatest percentage of commission when the client first purchases the policy. These policies also pay a renewal commission at a reduced percentage rate. The number of subsequent years an agent receives a renewal commission varies by plan type and carrier.
Medicare Supplement Commissions
In most cases, Medicare Supplement sales yield a commission rate of about 20% of the first year’s premium. Agents receive that commission rate for as many as the next six years after the policy is sold. The exact amount varies by carrier and premium amount. Ex. If your client purchases a Medicare Supplement plan with a monthly premium of $175, ($2100 for the year). You will earn a commission of $420 for the first year.
As you can see, Medicare sales can be a very lucrative business if you are motivated and in it for the right reasons.