How do insurance agents get paid?
By the Steady Ground team ·
You can get an insurance license in a few weeks. You don't need a degree. That part is easy. The hard part is knowing how insurance agents get paid. Two jobs with the same name can pay in very different ways.
Let's keep it simple. Most agents are paid by commission. Some also get a salary. A few get only a salary plus a bonus. Here is what each one means for you.
What is a commission?
A commission is money you earn when you sell something. In insurance, you get paid when someone buys a policy from you. A policy is the plan that covers them.
How much you get depends on the kind of policy and how big it is. It also depends on whether the policy is new or a renewal. A renewal is when a customer keeps their plan for another year.
Commission is the most common way agents are paid. That means your pay can go up and down. A great month pays well. A slow month may pay very little.
The three ways insurance agents get paid
1. You sell for one company
This is called a captive agent. You sell plans from just one insurance company. Pay is often commission. Sometimes there is a salary too, at least at the start.
Ask if you own your client list. Ask if there is a base salary and how long it lasts.
2. You sell for many companies
This is an independent agent. You can offer plans from several companies, so you can shop around for your clients. But you may be paid by commission only. You may also pay for your own leads and software. Leads are names of people who might want to buy.
3. You work for a company on salary
Some insurance companies and agencies pay a salary. On top of that, you may get a commission or a bonus when you hit a goal. This is the steadiest choice. Ask what the base pay is and what sales goals you must meet.
The one question to ask every time
Job ads can make commission sound like a salary. So ask the person hiring you this, word for word:
Get the answer in writing. If the answer is zero, you are looking at a commission-only job. That can still work. But you'll need savings or other income while your first sales come in.
How much do insurance agents make?
The U.S. Bureau of Labor Statistics says the median pay for insurance sales agents is $62,280 a year. The median is the middle. Half earn more and half earn less.
The lowest-paid 10% earn about $37,330 or less. Many new agents start closer to that end. Your pay grows as your list of clients grows, because renewals keep paying.
Most agents work full time, mostly in an office. About 63% work for insurance agencies and brokers. About 12% work for themselves.
Watch out for jobs that make you pay first
Some companies hire new agents, then charge them for leads, software or training. The Federal Trade Commission warns that real employers don't ask you to pay to get a job.
Before you say yes, add up what you would spend each month. Then compare it with what you would likely earn. If the costs come first and the pay is a maybe, think hard.
What it costs to start
Getting licensed in life and health insurance costs about $150 to $500, depending on your state. That covers a course if your state needs one, the exam, the license and fingerprints. In Texas, the exam is $49. Some companies will pay for your exam if you agree to work for them. Ask, and find out what you would owe if you leave.
Is it a good job?
It can be, if you like talking with people and can hear "no" a lot without giving up. The Bureau of Labor Statistics expects about 43,100 openings a year.
If you need a set paycheck from day one, look for a salaried role. Or try a different path for now.
Our insurance agent guide walks you through each step, from your state's rules to getting appointed. If you like the idea of insurance but not selling, read about claims adjusters instead. Or take the career quiz to see what fits you.
Quick answers
Do insurance agents get a salary?
Some do. Many are paid by commission only. Others get a salary plus a commission or a bonus. Always ask what you'd earn in a month with no sales.
What is a captive insurance agent?
A captive agent sells plans from only one insurance company. An independent agent can sell plans from several companies.
How much do new insurance agents make?
It varies a lot. The median for all insurance sales agents is $62,280 a year. The lowest-paid 10% earn about $37,330 or less, and new agents often start near there.
Where these facts come from
We checked these sources when we wrote this post. Rules and fees change, so check them before you pay for anything.