How do independent life insurance agents get paid?
Asked by: Destiny Hirthe | Last update: May 7, 2025Score: 4.8/5 (18 votes)
What do most independent insurance agents make?
The estimated total pay for a Independent Insurance Agent is $264,009 per year, with an average salary of $128,304 per year. These numbers represent the median, which is the midpoint of the ranges from our proprietary Total Pay Estimate model and based on salaries collected from our users.
How do life insurance agents get paid?
Typically, a life insurance agent receives anywhere from 30% to 90% of the amount paid for a policy (also known as the premium) by the client in the first year. In later years, the agent may receive anywhere from 3% to 10% of each year's premium, also known as "renewals" or "trailing commissions."
Who pays independent insurance agents?
Independent insurance agents are third-party salespeople who have a relationship with multiple companies and get paid a commission when they sell you a policy. Because they aren't bound to a single insurance company, they can help you compare options across several carriers to find the right policy for you.
What is passive income for life insurance agents?
Benefit #4: Passive Income
Your commission percentage on a policy drops after the first year, but you keep earning 5% to 10% as long as the policyholder pays their monthly premium. This is passive income you receive each month without even having to get out of bed.
Sell More Life Insurance with These 3 Simple Questions
Why do most life insurance agents quit?
Research shows (opens in a new window) that 80% of finance and insurance agents feel they aren't valued at work; they feel they are “only evaluated on what went wrong or could have been done better.” This is a major issue for finding and retaining top talent, which is more important than ever (opens in a new window).
Can selling life insurance be a side hustle?
Earn Supplemental Income
Looking to make some extra cash on the side? Now's the perfect time to start selling insurance! While we would never recommend going into any profession solely for the money, some people do enjoy earning something a little extra on top of their primary income.
Can you be an independent life insurance agent?
As independent insurance agents aren't obligated to a single insurer, they have the freedom to offer multiple types of insurance policies. They can offer life insurance, auto insurance, and personal lines insurance simultaneously, or they can specialize in one type of their choosing.
How to calculate commission on life insurance policy?
Take your base commission and multiply that by the premium that's paid on the insurance policy you sold. If you have an override, multiply that amount by the premium as well. Take the amounts of both of those calculations and add them together to get the final amount you will earn in commission.
What is the advantage of using an independent insurance agent?
A one-on-one meeting with a local agent can point out any gaps in your coverage, and help make sure you are covered for contingencies. Independent agents deal with multiple insurance carriers so you will be offered options. Agents also make sure you receive group discounts when applicable.
Is it hard to make money as a life insurance agent?
You can make a good living selling life insurance, especially if you continue to earn commissions on policies you have already sold. However, it is not an easy career, as it requires constantly working to find leads, build relationships, and make sales.
How much does a life insurance agent make per deal?
The most common way life insurance agents make money is through commissions. Generally, agents receive front-loaded commissions of 40% to up to 115% of the policy's first-year premiums, although the figure for renewals falls steeply to about 1% or 2%.
Why do financial advisors push life insurance?
Many financial advisors view life insurance as an important part of the financial planning and wealth protection services they offer their clients. Life insurance offers financial protection to surviving beneficiaries in the event the insured policyholder dies.
Is it better to be a captive or independent insurance agent?
Becoming an independent agent offers numerous advantages over a captive agent, including the ability to represent multiple carriers, support when needed, being your own boss, and the potential for higher commission rates and earning potential.
Which life insurance company pays agents the most?
Top paying companies in Insurance for Life Insurance Agent are National Agents Alliance, New York Life, and National Income Life.
How many policies does an insurance agent sell per month?
How many policies does an insurance agent sell? According to the financial reports, the Official Number is 2.5 policies per month. However, many people just do it part-time.
What is a good commission rate for life insurance?
Commission structures vary by policy and company. But typically, life insurance agents receive as commission 60% to 80% of the premiums you pay in the first year. They collect smaller commissions in subsequent years. Added up, 5% to 10% of all the premiums you pay over the life of the policy could go to commissions.
Which insurance company pays the highest commissions?
Some of the companies that offer high commission rates to their agents are HDFC Life, Max Life, ICICI Prudential, and Kotak Mahindra. These companies also have attractive incentive schemes and bonus programs for their top-performing agents.
How do life insurance brokers get paid?
An insurance broker makes money off commissions from selling insurance to individuals or businesses. Most commissions are 2% to 8% of premiums, depending on state regulations. Brokers sell all insurance types, including health insurance, homeowners insurance, accident insurance, life insurance, and annuities.
How do you get paid as an independent insurance agent?
One of the most common sources of income for agents is insurance commissions. Insurance agents are usually paid a commission on these insurance policy premiums, which means that the more policies they sell, the more money they can make.
Can a life insurance agent write his own policy?
Many agents begin by writing their own insurance and prospecting to friends and family. This is a great way to get a good feel for how the systems work and become comfortable quoting new coverage.
Are life insurance agents in demand?
Job Outlook
Employment of insurance sales agents is projected to grow 6 percent from 2023 to 2033, faster than the average for all occupations. About 47,100 openings for insurance sales agents are projected each year, on average, over the decade.
Can you become a millionaire being a life insurance agent?
If you have a great work ethic and are willing to place yourself out there to establish relationships with clients, you will get more opportunities to earn a higher income. Selling insurance may even make you a millionaire.
How to start selling life insurance independently?
You'll need to complete your state's pre-licensing education requirements, pass an insurance licensing exam, apply for a license with your state, receive a National Producer Number (NPN), and then either find a job with a life insurance company or start your own.
What is the most lucrative insurance to sell?
Life insurance is the most profitable—and the hardest—type of insurance to sell. With the highest premiums and the longest-running contract, it brings in cash over a long period of time. In the first year, agents make the largest annual sum on a policy, bringing in anywhere from 40–120% of the policy premium.