Many of you may wonder as to what percentage does an insurance agent make on a policy. Well, it will depend on the type of agent that you are working with.
Agents are essentially of two types - captive agents and independent agents. While a captive agent will be working for one insurance company, an independent agent may work with several insurers and might sell different types of insurance policies with multiple licenses. And the amount of money which they earn could depend on salary and bonuses (in case of captive agents) or commissions in the case of independent agents.
Well, the answer to this question lies in the size of customer base as well as the number of years of work experience in the insurance industry. In case of captive agents, they may be entitled to get salary, commission and yearly bonus.
But will be working for only one insurance company. On the other hand, independent agents can sell insurance products of several companies and can even get licenses for selling other policies like health, home and auto insurance. The commissions paid to independent agents are attractive and depending on the number of policies sold, the earnings can vary greatly.
It will depend on whether policies sold are short-term or long term as well as the policy types being sold. And there is always a chance that some potential insurance buyers can be rejected by insurance companies for which the agents work.
This is because in long term insurance covers, some clients may fail medical examination. Hefty commission payout can be expected for selling large and long term insurance policies. Every policy’s pricing structure could be different and it will affect agent’s commissionTime to Act!
As per data released by the Bureau of Labour statistics, the average income by way of commissions in 2018 for independent agents that sell life, home, car and insurance was around $88, 890 yearly or $42.73 hourly median. At the same time, captive agents earned about $50,560 yearly or $24.33 hourly.
Thus, the difference between earnings of both types of agents is vast meaning thereby that hard work pays when you work for multiple insurers and sell different kinds of insurance products. Here are some life insurance policies that captive and independent agents sell and earn commissions.