How Much Do Insurance Agents Make
If you’re considering a career in insurance, you want to get a few things figured out. How do you get your license in the first place? Will you need a ton of pre-license education hours? And once you get licensed, will the money you earn be worth it?
Insurance producer salaries vary based on your experience level, the lines of coverage in which you’re licensed, and where you live. That said, we can still give you a ballpark idea of how much you can expect to make as a licensed real estate agent or broker. So if you’re looking for rough figures on average insurance producer salaries, you’ve come to the right place.
But before we get to the numbers, let’s first look at how you’ll earn that money in the first place. And that varies depending on whether you choose to be an insurance agent or broker, so we’ll look at both.
How do insurance agents make money?
If you opt to be an agent, the amount you’ll earn depends on what type of insurance agent you choose to be. You have two options here:
- Captive insurance agent. In this case, you work exclusively with one insurance provider (e.g., Allstate, Geico) and you represent them. You’ll only sell their coverage options and you’ll have an appointment from them to bind their insurance policies for your clients.
While some captive agents are salaried by the insurance provider they represent, the vast majority work off of commissions (or, in some cases, a salary/commission combo). You’ll have an agreement with your insurance company in terms of how much commission you make on different lines of coverage. You might also earn bonuses (e.g., seasonal bonuses) from your insurance company. And they’ll generally market you. So if someone is looking for insurance from that provider in your area, the insurance company might refer them to you.
- Independent insurance agent. If you don’t want to be tied to a single insurance provider, you can choose to be an independent insurance agent. The upside here is that as an independent agent, you can explore policies from multiple different insurance providers, helping your clients find the coverage that best fits their needs and budget. The downside is that you’ll need to get appointments from — and arrange commission agreements with — multiple different insurance providers, which can require a lot of work.
Whether you choose to be a captive or independent insurance agent, you’re most likely going to earn money through commissions. That means you’ll make a percentage of the premium of the policy you sold. The premium is the amount your client pays for a year of coverage.
Captive agents generally earn a little less (5-10%) than independent agents (who earn around 15%), but captive agents get the benefits of bonuses, marketing, and, in some cases, benefits from their insurance company.
How do insurance brokers make money?
Brokers work differently. Rather than having an appointment from any insurance provider, they solely represent their clients. That means they can’t bind coverage for their clients — but their clients can rest easy knowing they’re truly on their side. They lay out policy options for their clients, then work with the insurance company the client chooses in order to put the proper coverage in place.
Like agents, brokers earn a commission (usually ranging from a few percent to a little less than 10%) off of the insurance policy they sell. The insurance company pays that commission as a way to thank the broker for bringing them their client’s business. Usually, the broker makes a larger commission on the first year of premiums. After the first year, their commission percentage drops to a much smaller number for the life of the policy.
Now that you know how insurance producers earn their money, we can get to the heart of the issue. How much money do producers make?
Agent salaries: How much money do agents make?
The U.S. Bureau of Labor Statistics says that the average insurance agent earned just north of $50,000 in 2019, the latest year for which data is available. That breaks down to about $25 an hour. The good news is that they also report 5% industry growth in the next decade, which means you can expect to have a good amount of job stability as an insurance agent.
But the amount you’ll earn will depend on a few things. First, your experience level: the more experienced you are, the likelier you are to sell more expensive policies. And that means earning a higher commission.
Beyond that, the lines of insurance in which you work impact your earnings.
How much is the average life and health insurance license salary?
Glassdoor says that life and health agents earn a salary very close to the average from the Bureau of Labor Statistics, reporting average earnings of just over $51,000. But ZipRecruiter says life agents make a fair chunk more. Check out their list of average life insurance agent salaries by state.
How much do property and casualty insurance agents make?
If you go the property and casualty route, you might earn a little less. While Payscale puts the average P&C salary at just under $50k, Ziprecruiter reports an average of about $37,500 and Glassdoor says the average is $40,000.
How much money do insurance brokers make?
Brokers might earn lower commissions, but they’re generally able to do more business because they’re not tied to any insurance company. Their average salary is somewhere between $65,000 and $69,000, per Payscale, Glassdoor, and Indeed.
Ultimately, a career in insurance provides you with a stable income. And since the industry is only projected to grow, you can feel good about choosing to explore this career path.
Whether you want to be a broker, a captive agent, or an independent agent, don’t forget that you need to get the proper licensure for your state. Fortunately, more and more states allow you to complete your pre-license and continuing education online (such as with the courses we offer on our site), making it easier than ever to become an insurance professional. Start your hours now and you’ll be on your way to earning a solid salary as an insurance producer.