If you’re considering an insurance career, there are a few things you want to understand. How do you get your license in the first place? Will you need a ton of hours of pre-licensing training? And once you get your license, will the money you earn be worth it?
Insurance producer salaries vary depending on your level of experience, the lines of coverage you are licensed in, and where you live. That said, we can still give you a rough idea of what you can expect to earn as a licensed real estate agent or broker. So if you’re looking for ballpark numbers on average insurance producer salaries, you’ve come to the right place.
But before we get to the numbers, let’s first see how you’re going to make that money in the first place. And it varies depending on whether you choose to be an insurance agent or insurance broker, so we’ll look at both.
How do insurance agents make money?
If you choose to be an agent, the amount you will earn depends on the type of insurance agent you choose to be. You have two options here:
- Captive insurance agent. In this case, you work exclusively with a single insurer (eg Allstate, Geico) and represent it. You will only be selling their coverage options and you will have an appointment with 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 on commission (or, in some cases, a salary/commission combo). You will have an agreement with your insurance company as to the amount of commission you receive on the different lines of coverage. You might also earn bonuses (eg, seasonal bonuses) from your insurance company. And they will usually market to you. So if someone is looking for insurance from this provider in your area, the insurance company might refer them to you.
- Independent insurance agent. If you don’t want to be tied to just one insurance provider, you can choose to be an independent insurance agent. The benefit here is that as an independent agent, you can explore policies from several different insurance providers, helping your clients find the coverage that best suits their needs and budget. The downside is that you will need to get appointments and make commission agreements with several different insurance providers, which can be a lot of work.
Whether you choose to be a captive or independent insurance agent, you will likely earn money through commissions. This means that you will earn a percentage of the premium for the policy you sold. The premium is the amount your customer pays for one year of coverage.
Captive Agents generally earn slightly less (5-10%) than Freelance Agents (who earn around 15%), but Captive Agents receive bonuses, marketing, and in some cases benefits from their company. assurance.
How do insurance brokers make money?
Brokers work differently. Rather than having an appointment with any insurer, they only represent their clients. This means that they cannot bind coverage for their clients, but their clients can rest easy knowing that they are truly on their side. They present the policy options for their clients and then work with the insurance company of the client’s choice to arrange the appropriate coverage.
Like agents, brokers earn a commission (usually ranging from a few percent to just under 10%) on the insurance policy they sell. The insurance company pays this commission to thank the broker for bringing their client’s business to them. 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 make their money, we can get to the heart of the matter. How much money do producers make?
Agent Salaries: How Much Money Do Agents Make?
The US Bureau of Labor Statistics says the average insurance agent earned just north of $50,000 in 2019, the latest year for which data is available. This works out to around $25 an hour. The good news is that they also report a 5% growth in the industry over the next decade, which means you can expect good job stability as an agent. assurance.
But how much you will earn will depend on several things. First, your level of experience: the more experienced you are, the more likely you are to sell more expensive policies. And that means earning a higher commission.
Beyond that, the branches of insurance in which you work have an impact on your income.
What is the average salary associated with a life and health insurance license?
Glass Door says life and health officers earn very close to the Bureau of Labor Statistics average, reporting average earnings of just over $51,000. But ZipRecruiter says life agents earn significantly more. Check out their list of average life insurance agent salaries by state.
How much do property and casualty insurance agents earn?
If you go the property and accident route, you may earn a little less. While the countrywide puts the average P&C salary at just under $50,000, Ziprecruiter reports an average of around $37,500 and Glassdoor says the average is $40,000.
How much do insurance brokers earn?
Brokers may earn lower commissions, but they are generally able to do more business because they are not tied to any insurance company. Their average salary is between $65,000 and $69,000, per Payscale, Glassdoor, and Indeed.
Ultimately, an insurance career provides you with a stable income. And since the industry is only growing, you can feel good about choosing to explore this career path.
Whether you want to be a broker, captive agent, or independent agent, remember that you must obtain the appropriate license for your state. Fortunately, more and more states are allowing you to complete your pre-licensing and continuing education online (like 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 well on your way to earning a solid salary as an insurance producer.
