We’re going to break down the average insurance agent salary and discuss what factors affect your income potential.
So, if you’re interested in becoming an insurance agent and earning a good income, keep reading to learn more about the career path and what it takes to succeed.
What Do Insurance Agents Do?
An insurance agent is responsible for selling insurance policies to customers on behalf of insurance companies. They help customers choose the right type and amount of insurance coverage based on the customer’s needs and budget.
Some insurance agents work independently, while others work for an insurance agency or broker.
How Insurance Agents Make Money
Most insurance agents make a commission on each policy they sell. How much do insurance agents make per policy? The amount of commission varies depending on the type of policy and the insurance company, so it ranges from 5% to even 100%(!).
Insurance agents use a few different methods to sell policies. The most common method is through personal relationships. They develop relationships with potential customers and then offer them insurance products that meet their needs.
Another common method for selling insurance is through the use of lead lists. These are lists of potential customers that insurance agents can contact and try to sell insurance to.
Finally, insurance agents may also sell insurance through telemarketing or cold calling. This involves contacting potential customers and trying to sell them insurance over the phone.
Lowest & Highest Insurance Agents Commissions
The insurance agent average salary is largely based on commissions.
For example, life and health insurance agents receive the highest commissions in the first-year premium — from 40% to 100%, while independent agents get only 15%. Home and car captive agents receive an even smaller amount as their commission ranges between 5% and 10%.
In addition to the commission, insurance agents may also earn bonuses. Bonuses are typically based on production, so the more policies you sell, the higher your bonus will be. They can range from a few hundred dollars to several thousand dollars per month.
That said, insurance agents make an average of $46,000 per year, whereas the insurance agent salary per hour ranges between $13.00 and $38.00.
While living with 40k per year doesn’t put you in the middle class, your income potential as an insurance agent will also depend on several factors, including your experience, the type of insurance you sell, and the state you work in.
The Average Salary By Years Of Experience
The insurance industry is a great place to start your career. There is a lot of opportunity for growth and advancement. While the first-year insurance agent salary might seem low, at $30,000, with the right experience, you can earn an excellent salary.
- 0–12 months: $30,000
- 12–24 months: $35,000
- 24–36 months: $40,000
- 36–48 months: $45,000
- 48+ months: $50,000+
The Average Salary By Field of Expertise
There are two types of insurance agents: captive agents and independent insurance agents.
Captive insurance agents are insurance agents that represent only one insurance company. For example, if you were to go to State Farm and ask for a quote, the insurance agent that helped you would be a captive agent.
Independent insurance agents are insurance agents that represent multiple insurance companies. These types of agents are also known as “insurance brokers.” For example, if you were to go to an insurance broker and ask for a quote, they would give you quotes from multiple insurance companies.
Gnerally, the salaries of insurance agents look like this:.
- The average life insurance agent’s salary: $62,000
- The average Farmers Insurance agent’s salary: $60,446
- The average health insurance agent’s salary: $55,653
- The average car insurance agent’s salary: $53,844
- The average insurance sales agent’s salary: $52,000
- The average licensed insurance agent’s salary: $48,147
- The average property and casualty insurance agent’s salary: $37,473
The Average Salary By Location
You should look for employment in states that offer the highest average wages for insurance agents:
- Hawaii ($92,031 per year)
- New York ($81,054), and
- Vermont ($78,594).
By the way, the average insurance agent’s salary in Massachusetts and New Jersey amounts to $70,657 and $67,185, respectively.
The highest paying cities for insurance agents are:
- New York, NY ($80,761),
- Boston, MA ($70,798), and
- Newark, NJ ($67,678).
On the other hand, definitely avoid New Mexico ($37,350), Idaho ($37,420), and Montana ($41,154) offer the lowest wages.
Highest Insurance Agent Salaries
Which insurance agent gets paid the most and what field should you focus on? Car insurance agents can earn over $125,000, an being a health insurance agent isn’t bad either ($120,000 maximum annual salary).
Nevertheless, perhaps your chances of reaching six figures are best if you are a Farmers Insurance agent. Their paycheck can be as high as $107,500. That’s lower than the others, but a higher percentage of the employed enjoy it in comparison to health or car insurance agents.
Conclusion
So, what kind of salary can you expect as an insurance agent? That answer depends on many factors, including your experience, the size of the company you work for, and your location.
In general, insurance agents make an average of $46,000 per year, while they can also earn between $30,000 and $125,000 per year.
FAQs
Is it hard to make money as an insurance agent?
Not if you think outside the box and seek for opportunities. In fact, you can do a few things to increase your wages, such as getting licensed to sell multiple types of insurance, working for an insurance company that offers higher commissions or bonuses, and earning additional designations or certifications.
Plus, the job outlook for insurance agents is positive, with the Bureau of Labor Statistics predicting that employment rates for insurance sales agents will grow by about 7% from 2020 to 2030.
How much do insurance agents make in the UK?
In the United Kingdom, insurance agents earn an average salary of £25,000 per year. That’s about $32,552.
As expected, the highest paying city is London (£51,493 ($64,703)).
Again, your salary will depend on your experience and the type of insurance you sell. For example, insurance agents who sell life insurance tend to earn more than those who sell property and casualty insurance.
How much does a life insurance agent make?
If we look at the average insurance agent salaries, a life insurance agent makes $62,000 per year. At the same time, this is the highest average salary among insurance agents. However, if you are willing to earn the biggest commissions and bonuses, perhaps you should switch strictly to Farmers Insurance or become a car insurance agent and make over $100,000.
What is the annual salary for an insurance agent?
The average salary would be $46,000 per year. However, the average yearly salaries vary greatly depending on the type of policy, from $37,473 to $62,000.
- $62,000 is the average salary of a life insurance agent
- $60,446 is how much Farmers Insurance agents make
- $55,653 is paid yearly to health insurance agents
- $53,844 is the average salary of a car insurance agent
- $52,000 is how much insurance sales agents earn per year
- $48,147 is the average for licensed insurance agents
- The average property and casualty insurance agent’s salary reaches $37,473.
So, as you can see, the insurance agent salary will also depend on their chosen field.
