Is life insurance a profitable business?
Asked by: Alfonzo Denesik | Last update: January 4, 2026Score: 4.7/5 (56 votes)
Do life insurance companies make a profit?
Insurance companies earn a profit by charging their customer premiums for buying insurance policies. However, insurers also earn income by investing the premiums received in various products, including U.S. Treasuries and corporate bonds.
What type of insurance is most profitable?
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.
Can you make money from life insurance?
You may also be able to build cash value through dividends if you choose a mutual insurance company, which is owned by policyholders. These companies typically pay yearly dividends to their whole life policyholders, which can be used to purchase paid-up additions or PUAs.
Is life insurance a profitable investment?
Is Life Insurance a Smart Investment? Using permanent life insurance as an investment might make sense for certain high-net-worth individuals looking to minimize estate taxes. But for the average person, buying term and investing the difference is usually the better option.
How Does Life Insurance Work?
Is selling life insurance a good hustle?
In our opinion, it doesn't hurt that insurance is a lucrative business. You can gain commissions on the plans that you sell, so it's entirely up to you how much you want to hustle. You can also make more money with consistent renewals, so it pays in the long run to have loyal clients.
Can you become a millionaire selling life insurance?
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.
Can you build wealth with life insurance?
Cash-value life insurance is one strategy that helps you make the most of your hard-earned dollars, by building wealth and supporting your existing retirement vehicles. With life insurance, the growth inside a life insurance policy is tax deferred.
What is the cash value of a $10,000 life insurance policy?
Say, for example, that you purchase an insurance policy with a face value of $10,000. Once the policy matures, the cash value of the policy should equal $10,000.
Can you make money selling life insurance from home?
Yes, you can sell life insurance from home. You'll need a state license to sell life insurance, and you may need a business license from your state or municipality as well.
How easy is it to sell life insurance?
That said, it'll be tough going, especially at first. Agents have to have thick skin and be able to handle rejection. After all, they're all selling the same products, for the most part. So if client service and building relationships aren't your thing, you might want to pass on this particular job.
What type of insurance makes the most money selling?
What Is the Most Profitable Insurance to Sell? People usually see selling life insurance as a really good way to make money in the insurance world. It's because you can earn more money from it than other kinds of insurance out there.
How do life insurance companies make money if everyone dies?
Life insurance companies make money by charging you premiums and investing some of the money they collect. They can also profit from policies lapsing or expiring.
What is the average income in the life insurance industry?
The estimated total pay for a Life Insurance Agent is $121,661 per year, with an average salary of $73,067 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.
Is life insurance a growing industry?
The life risk protection business has been growing more steadily than the savings business in recent years. Swiss Re Institute forecasts 2.7% annual premium growth in 2025 and 2026, below the long-term trend of 3.7% per year from 2014 to 2023.
How much can you sell a $100,000 life insurance policy for?
A typical life settlement is worth around 20% of your policy value, but can range from 10-25%. So for a 100,000 dollar policy, you would be looking at anywhere from 10,000 to 25,000 dollars.
What disqualifies life insurance payout?
Life insurance proceeds can be denied. Some denials are legitimate, like in case of policy lapses, material misrepresentations, or exclusions in the form of illegal activities or war. In other cases, bad-faith insurers use elaborate methods to reject claims so they do not have to pay the proceeds.
How do life insurance companies make money?
An insurer gets the money up front from customers, in the form of policy payments. They may or may not have to pay off a claim on that policy, and they can put the money to work for them right away earning investment income on Wall Street. Many insurance companies have an out, too, if their investments go south.
How billionaires use life insurance?
The richest of the rich can use life insurance to avoid estate and income taxes. Private-placement life insurance is perfectly legal — unless a new bill passes. A financial advisor tells BI how the insurance saves the wealthy tens of millions of dollars.
Can life insurance generate income?
This type of policy accumulates a cash value, which can be used as a loan source or collateral for a loan. Term life insurance typically covers your life for a specified period of time, usually 1, 5, 10, 15, 20, 25 or 30 years. Most term policies do not build cash value but can still be used to convert to income.
Can selling life insurance be a side hustle?
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.
How hard is it to start selling life insurance?
There are many challenges facing new life insurance agents. The pay is usually straight commission. Finding qualified customers yourself is notoriously difficult, and the few leads that your company may give you have usually been contacted by dozens of agents already.
How fast can you make money selling life insurance?
Most businesses don't make any profit in their first year of operating. It could take anywhere from 18 to 24 months for your insurance sales to actually provide profit. Don't feel discouraged. Every small business owner has to clear this hurdle.