What is the commission of an insurance agent?
Asked by: Lew Raynor IV | Last update: December 29, 2025Score: 4.9/5 (12 votes)
How much do insurance agents make on commission?
The average commission rate for insurance agents ranges from 10% to 20%, with some agents earn as much as 30% or more. For example, if an agent sells a policy with a $1,200 annual premium, and the commission rate is 15%, the agent would earn $180 per policy.
What is a good commission split in insurance?
Commissions can vary widely, but it's common for independent carriers to pay 12% to 15% on new business and 10% to 12% on renewals. So, being independent and working with more insurance carriers will almost always mean you'll make more money.
Can you make good money as an insurance agent?
A career selling insurance can be a good way to make money. It provides many opportunities to earn a high income with strong potential for growth. Because your income will mostly come from commissions, there can be no limit to how much you earn.
What is the profit margin of an insurance agent?
According to industry experts, most insurance agency owners operate with an average profit margin of 2% to 10%.
For New Insurance Agents - How Commissions Work!
What is the turnover rate for insurance agents?
The industry is finding ways to replenish its ranks because of a high agent turnover rate. Nearly 90% of agents across various lines of insurance, including life, quit within three years, according to life insurance agency management system provider AgencyBloc.
What kind of insurance agent gets paid the most?
While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.
What are the cons of being an insurance agent?
Cons of working in insurance sales
For some people, the thought of earning commissions is appealing. For others, it can cause stress and worry about their future financial situation. New insurance agents often work long hours to build and strengthen relationships and get their names out in the industry.
How to calculate insurance agent commission?
Take the premium paid on an insurance policy and multiply it by your base commission amount. Then, take the premium and multiply it by your override amount. Add the two together. This represents your total commission.
What is a good monthly commission amount?
Commission structures are also a motivating factor that give salespeople some independence, help them reach on-target earning (OTE), and help managers meet goals month over month. The average commission rate for sales sits somewhere between 20% and 30% of gross margins, but this depends on the sales structure.
What is a good commission ratio in insurance?
"An ideal ICR range should be between 75 and 90%, which indicates a healthy settlement of claims by the insurer against the premium collection," says Narula.
How does an insurance commission work?
For example, if the insurance policy has a premium of $1000 and the commission rate is 10%, the insurance agent or broker would earn a commission of $100. The exact amount of commission can also be influenced by factors such as the experience of the insurance agent or broker and the level of sales they have achieved.
Which insurance company pays highest commission?
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 state farm agents get paid?
With multiple income streams, State Farm gives each agent the flexibility to determine their own income goals. Our independently contracted agents don't receive base compensation* but can earn commission, potential travel and other compensation by helping customers.
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.
What is the hardest part of being an insurance agent?
What is the hardest part of being an insurance agent? The hardest part of being an insurance agent often revolves around the constant need for lead generation and sales. Many agents struggle with the cold calling aspect, where rejection is frequent, and maintaining a steady stream of new clients can be challenging.
Are insurance agents paid well?
As of early 2023, the average annual pay for a Life insurance agent in the United States was $83,442 a year. The top four paying states for Life insurance agents are New York, New Hampshire, Vermont, and Maine. Life agents in these states earn higher salaries than the national average.
What is the best insurance company to work for as an agent?
Robertson Ryan is a great agency to work for. They are very flexible, and there is no micromanagement that takes place in this agency. The agency is all about family and health and taking care of you. RRI's remote work opportunity is one of the best.
Why do insurance agents earn so much?
Most professionals who sell insurance are paid largely on a commission basis. In fact, most agents aren't even employees of the carrier. More often than not, they're independent contractors who are compensated based on how much they sell, with higher commissions for certain types of products.
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).
What is the average age of insurance agents?
Insurance agents make on average $51,936 per year. The average age of an Employed insurance agent is 45.9 years old.
Do insurance agents make 6 figures?
A life insurance agent's income potential is uncapped. Some of the highest earners make well over six figures each year, while others choose to work as part-time insurance agents to earn some extra cash.