HOW MUCH DO INSURANCE AGENTS MAKE: Average Pay In 2023

How much do insurance agents make
Diggy Insurance

Insurance agents are known as licensed professionals who conduct a needs analysis. They assist their customers in locating the appropriate insurance products. Also, they play an essential role in protecting their customers’ families from unforeseeable financial loss in the future.  If you’re thinking about becoming an insurance agent, knowing the average salary can help you decide if it’s the right career path.  This article answers the question “how much do insurance agents make per policy, ” how insurance agents make money and more. Read here!

How Much Do Insurance Agents Make a Year?

A first-year insurance agent can earn more than $100,000 annually, according to the bureau of labor statistics (BLS). The industry’s lowest 10% earned less than $29,000, while the highest 10% earned more than $127,840.

Commissions are one of the primary reasons why insurance agent salaries vary. The more successful you are in sales, the more money you will make. 

However, there are additional factors that influence an insurance agent’s earnings.

What Factors that Influence How Much Insurance Agents Make?

Among the relevant factors are:

#1. Type of Insurance Agent Type

Insurance agents are classified into two types: captive and independent. Captive agents only work for one insurance firm. Independent agents represent and sell insurance plans from a variety of carriers. However, regardless of the type of agent you are or the commissions you receive, most agents spend the majority of their time marketing their products and services.

#2. Insurance Policy Type

Numerous insurance policies are available, ranging from vehicle to commercial property insurance. As an insurance agent, you are responsible for selling such policies to individuals, families, and businesses to safeguard them from financial loss during a catastrophe.

To boost your revenue, each type of insurance has prospects for selling to new clients or upselling to existing customers. People and organizations continuously seek dependable insurance coverage solutions to protect their assets. Knowing exactly what each line of insurance consumers require and offering it is critical if you want to increase your sales.

There are also specific specialist insurance plans that can provide good income prospects, such as food truck insurance, airplane insurance, and personal trainer insurance, to mention a few.

#2. Location

The cost of living, transportation, accident rates, public health, and other factors differ by state. These facts are essential in calculating insurance rates and premium amounts. Furthermore, a small town with a relatively small population may only offer many chances. Simultaneously, a larger city with more people will provide you with additional options to find new customers.

#3. Structure of Commissions

Most insurance brokers rely significantly on commissions as their primary source of income. Captive agents selling house and auto insurance will earn a 5% to 10% fee on the first year’s premium, according to Insure.com. In comparison, the commission rates for these forms of insurance for an independent agent average roughly 15%.

Did you know that? According to the Department of Financial Services (DFS), New York has one of the harshest insurance laws, known as Insurance Regulation 194. This requires insurance brokers and agents in New York to provide written disclosures of any year-end bonuses from carriers and their commission rates if a customer requests them.

#4. Qualifications

Most insurance businesses do not have stringent hiring standards for insurance agents. Many may not require prior insurance industry experience because most organizations have internal training programs for new agents. These programs educate them on the products they will be selling.

You will need the following qualifications to become an insurance agent:

  • A high school diploma is required (some businesses may also require a bachelor’s degree).
  • State issued license
  • Product sales knowledge
  • Business management abilities
  • Excellent communication abilities
  • Patience and a good mindset.

Formal training is more important than a university education when working in the insurance industry. A bachelor’s degree in a related discipline can be beneficial, but it is not typically required. In the insurance industry, there are more opportunities to learn on the job and be exposed to knowledge that a college degree may not provide.

Many insurance agents start their careers by shadowing more experienced agents. It’s a terrific method for them to engage with their coworkers while also learning on the job.

NOTE: It’s important to remember that other jobs are available in the insurance sector besides becoming an agent. Salary ranges for positions such as insurance broker and insurance underwriter are higher. As you gain more experience in the field, you can investigate these possibilities.

Can I Make Reasonable Money As An Insurance Agent?

In most cases, an insurance agent earns money through commissions. It’s the most common type of payment for insurance agents. 

Most insurance agents sell home, auto, life, and health insurance. For selling a home and auto insurance, insurance companies pay agents a percentage of the premiums and renewals. 

When a client first signs up for a life or health insurance policy, the percentage of the sale is higher. Renewals can earn agents money, but not as much as new policies.

However, there are other ways to make money. This way varies depending on the insurance company for which an agent works. 

Which Insurance Agent Makes the Most Money?

Most people also ask, “how much do insurance agents make a year?” well, this depends on the type of insurance agent. Each type of insurance agent has a different amount they make yearly.

The life insurance sales commission is the highest of any insurance commission. Agents can earn it in their first year if they are only paid on commission. 

They are the insurance agents that make the most money.

Is Selling Insurance Hard?

Selling insurance can be challenging and accessible as well. It’s like many other sales-related careers. It’s a fast-paced career that requires focus and determination. 

Many potential leads and clients will say no or lose interest in the products you sell, and they may choose the offerings of another agent over yours. 

To succeed as an insurance sales agent, you must have specific skills, such as perseverance, the ability to say no, and a positive attitude. This guide on “how much do insurance agents make a year” can help you know more about those skills.

Is Insurance Agent A Stressful Job?

No, working as an insurance agent is not a stressful occupation. Almost half of all insurance agents work under independent insurance agencies or brokerages. 

They sell products provided by different insurance companies. Almost 20% are self-employed. While others are employed by those called direct insurance carriers. 

From this, I guess the next question that might come to your mind is, “how much do insurance agents make a month?” Keep reading to know more.

Can You Make 100k As An Insurance Agent?

Yes, you can earn $100,000 per year as an insurance agent. While it’s possible to earn more than $100,000 as an insurance agent, even higher-paid positions typically do not pay more than $79,000 per year. 

An insurance agent’s average annual salary is $46,949. Outside the financial services industry, only a few industries provide the opportunity for relatively inexperienced professionals to earn significant income in their first year of employment. And few careers in the financial services industry provide newcomers with the opportunity to earn as much as a life insurance agent does right away. 

In their first year of sales, a hardworking insurance agent can earn more than $100,000. However, success as an insurance agent does not come cheap. It’s a demanding field, and most competitors burn out sooner rather than later. 

Insurance agents are far more likely to hear the word “no” than the word “yes.” and it’s not uncommon for the word “no” to be delivered with a slew of expletives and the proverbial door slammed in the face.  

Why Is Selling Life Insurance So Hard?

Selling life insurance can be challenging to make a living, let alone sustain a lucrative, long-term career. Some industry analysts, such as monster.com, report that agents burn out within a year. 

This is why most people ask, “how much do insurance agents make an hour?” They like to inquire about the money before deciding on pursuing a career.

The difficulties that new life insurance agents face are many. Typically, the pay is based solely on commission. 

Getting customers that are qualified on your own can be difficult. The few leads your company may provide have typically already been contacted by dozens of agents.

Given these difficulties, it’s understandable that some people might wonder: how much do insurance agents make a month? Is life insurance a good career path? Because selling life insurance has both advantages and disadvantages.

How Much Do Insurance Agents Make Per Policy?

While there are many different types of insurance, the most lucrative career in the insurance industry is that of a life insurance salesperson. Agents who specialize in this segment of the insurance market assist families, businesses, employers, and other parties in protecting against financial loss when a loved one dies.

Insurance agents who sell this type of coverage are classified as either “captive” agent, who only sells insurance from one company, or “non-captive” agents, who represent multiple insurance carriers.  

In either case, the typical insurance agent will spend the majority of their time marketing to identify people who may need new or additional insurance coverage. They provide them with quotes from the companies they represent and convince them to sign the new insurance contract.

A life insurance agent typically receives between 30% and 90% of the amount paid for a policy (also known as the premium) by the client in the first year. Later, the agent may receive 3% to 10% of the annual premium, also known as “renewals” or “trailing commissions.” 

This gives people insight into the question: how much do insurance agents make a year? 

How Do I Succeed In Selling Insurance?  

The next question you should ask besides “how much do insurance agents make per policy” should be “how can you succeed in selling insurance?” To do this, you have to:

#1. Be able to recognize your product

The first skill to succeed in selling insurance in this guide, “how much do insurance agents make a year,” is recognizing your product. Even the most skilled salesperson cannot sell something he does not comprehend. 

State insurance laws and company policies govern insurance products, so there is much to learn. You learn your state regulations before receiving your insurance license, and company training begins once a company hires you. 

Nonetheless, seek relevant continuing education classes and product training from the insurer. This ensures you have all the information you need to understand your product.

Finally, learn about your competitor’s product so you can effectively handle objections.

#2. Become a teacher

The second skill to succeed in selling insurance is becoming a teacher. You want your prospects and current customers to see you as an information source. 

Knowing your product inside and out isn’t just for explaining it to customers when they sign a contract. It also associates your name with your insurance product, positioning you as its go-to source. 

Write articles for trade magazines and community newspapers. Free insurance education classes can be held at your local community center or library. 

Also, you can consider developing a newsletter or website for your market. It should discuss important insurance news and provide free relevant information.

#3. Select an expertise

The third skill to succeed in selling insurance is choosing the right expertise. 

Insurance licenses are available in various categories, including health, life, property, and casualty. The best insurance agents primarily specialize in selling a single product. It enables you to pursue niche opportunities and become an expert in a specific type of insurance. 

Don’t concentrate on one product while ignoring the others. As long as you are licensed, you can sell and service other types of insurance to your customers, eventually taking care of their insurance needs. 

Simply devote the majority of your efforts to selling one type.

#4. You have to promote yourself

Promoting yourself is the next skill to succeeding in selling insurance. 

Insurance cannot be sold in a vacuum. In some cases, the insurer will handle traditional marketing initiatives such as commercials and print advertising, but they will not consistently market you specifically as an agent. 

To market yourself, you must network with new prospects and business connections. This could include joining networking groups or participating in insurance trade associations. 

It’s also good to make your presence known in the community through non-business or insurance groups, such as religious and service organizations.

#5. Work on improving your people skills

Lastly, improving your people skills is essential to succeed in selling insurance.

In reality, an insurance agent is selling a promise to pay in case of a covered incident. Because there is no physical product to sell, your interpersonal skills are even more critical to your success. 

Gaining the trust of a potential customer is critical to working with them. With people skills, you can build a long-term relationship with your customers and become their go-to source for insurance products throughout their lives.

Conclusion

An agent’s income is based on commissions and bonuses; your success in sales is reflected in your earnings. If you have a strong work ethic, a willingness to learn, and actively promote yourself, you could quickly earn more than enough money as an insurance agent.

The insurance industry is constantly expanding and will always require capable individuals. And if you live up to your potential, adapt to changing circumstances, and market yourself effectively, your insurance agent salary will be what you desire.

Finally, I hope this article answers your question about how much insurance agents make an hour, a month, or a year. Cheers!

Frequently Asked Questions

Which insurance agent makes the most money?

The life insurance sales commission is the highest of any insurance commission. Insurance agents here make the most money.

What do insurance agents do?

Insurance agents are responsible for providing and negotiating a wide range of insurance products for their clients. This includes life, health, and property insurance.

How many insurance policies does an agent sell?

According to financial reports, the official number is 2.5 policies per month. Many people, however, only work part-time. 

References

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