All You Need To Know About
Insurance Agent Salary

TLTR: Learn how insurance agents make money and what affects an insurance agent’s salary. Find out what factors influence commissions and what considerations form the basis of an insurance sales salary. 

Experience in any field is often the basis for exceling and earning a decent living. One significant exception? The insurance industry. 

While relevant knowledge is always essential, only a handful of positions besides that of insurance agent offer newcomers the potential to earn a significant income. 

But just because the industry gives rookies a chance doesn’t mean it’s easy to succeed. Finding success in your insurance career and making good money comes with sacrifice. It’s a challenging job, and people who don’t give it their all tend to fail eventually. 

In this blog

How Do Insurance Agents Make Money?

Generally, an insurance agent makes money via commissions. It’s the most common form of compensation for insurance agents. The commission amount depends on the type and quantity of insurance sold. Whether it’s a new policy or a renewal also plays a part in determining the commission. 

A majority of agents sell home, auto, life, and health insurance. Insurance carriers provide agents with a percentage of the premium and renewals for selling home and auto insurance. Life and health insurance policies, on the other hand, yield a larger percentage of the sale when a client first signs up. Agents can also make money from renewals, but not as much as from new policies.  

For instance, let’s say Chet the insurance agent sells a health insurance policy to a client named Jeremy. The policy covers the client for most health-related events. The insurance company Chet works for pays a 90%/5% commission on health insurance policies. This means that the agent selling the policy receives 90% of the first year’s premiums and 5% of future renewals. 

The policy costs Jeremy $150 per month, which is $1,800 per year. So, in the first year, Clint makes a commission of $1,620 ($1,800 x 90%). And in the following years, provided Jeremy makes his payments, Clint will earn $90 in renewals ($1,800 x 5%). 

But there are other earning models. It varies depending on which insurance company an agent works for. These models include: 

  • Salary only  
  • Salary and commission  
  • Commission only  
  • Salary plus bonus  

As an incentive, some companies give bonuses when the agency hits a profit target.  

    NOTE: A majority of insurance agents work full time and sometimes more than 40 hours a week.


    How Much Does An Insurance Agent Make A Year?

    According to the Bureau of Labor Statistics (BLS),

    an insurance agent can earn more than $100,000 in their first year. The median annual wage for insurance sales agents was $52,180 as of May 2020. The lowest 10% of earners in the industry made less than $29,000, and the highest 10% earned more than $127,840. 

    One of the core reasons why insurance agents’ salaries differ is commissions. Simply put, the better you are at sales, the more you’ll make. 

    But there are additional factors that play a role in determining an insurance agent’s income. 

      What Determines an Insurance Agent’s Salary?

      The relevant factors include: 

      Type of Insurance Agent 

      There are two types of insurance agents, captive and independent. Captive agents only sell insurance for one company. Independent agents represent and sell policies from multiple carriers. But regardless of which type of agent you are and what commissions you get, agents typically spend most of their time marketing their products and services. 

      Type of Insurance Policy 

      There are many kinds of insurance policies ranging from car insurance to commercial property insurance to countless others. As an insurance agent, you focus on selling such policies to people, families, and businesses for protection against a financial loss during a crisis. 

      Each type of insurance has its own set of opportunities for selling to new customers or upselling to existing customers for you to increase your earnings. There are always people and businesses looking for reliable insurance coverage options to safeguard their assets. Knowing exactly what the customers of each line of insurance need and providing them with it is is essential if you’re trying to drive your sales up. 

      There are also specific niche insurance policies such as food truck insuranceaircraft insurance, and personal trainer insurance, to name a few, which can provide good opportunities for earnings. 


      The cost of living, transportation, accident rates, public wellbeing, and more vary according to state. These statistics play a significant part in determining insurance rates and the amounts of premiums. Also, a small town with a relatively small population can only present you with so much in terms of opportunities. At the same time, a big city with more people will offer you more opportunities to find new customers. 

      Commission Structure 

      Most insurance agents heavily rely on commissions as their bread and butter.  According to, captive agents selling home and car insurance will earn a 5% to 10% commission in the first year’s premium. In contrast, an independent agent’s commission rates for these types of insurance average around 15%. 

      Did you know? According to the Department of Financial Services (DFS), the state of New York has one of the strictest insurance laws, known as Insurance Regulation 194. This states that it’s mandatory for insurance brokers and agents operating in New York to offer written disclosures of any year-end bonuses from carriers along with their commission rates if a customer asks them. 


      The vast majority of insurance companies do not have strict requirements for hiring an insurance agent. Many do not require previous experience in the insurance industry because most companies have internal training programs for new agents. These programs teach them about the products they are going to sell. 

      To become an insurance agent, you will require: 

      • A high school diploma (Some employers might also require you to have a bachelor’s degree) 
      • A state-issued insurance license 
      • Product sales experience  
      • Business management skills 
      • Good communication skills 
      • Patience and a positive attitude 

      When working in the insurance industry, having formal training is more critical than a university-level education. A bachelor’s degree in a related field can be helpful, but isn’t usually considered necessary. There are more opportunities to learn on the job in the insurance industry and to be exposed to knowledge that a college degree may not provide. 

      Many insurance agents begin their careers by working alongside experienced agents. It’s a great way to connect with their fellow agents and learn on the job as well. 

      NOTE: It’s worth keeping in mind that the insurance industry offers other employment opportunities—you’re not limited to being an agent forever. There are positions such as insurance broker and insurance underwriter whose salaries range higher. You can explore these opportunities as you gain more experience in the field. 

      why Insurance-agent-salary

      Outlook for the Insurance Industry

      Statistics show that the future looks bright. According to Deloitte, the global insurance industry is projected to grow by 3% in 2021. Additionally, 61% of insurers in North America are focusing on increasing diversity in leadership, development, and hiring. This shows that becoming an insurance sales agent can be a viable career path for any and all interested individuals. 

      Insurance companies will always be on the lookout for new clients. And as the older workforce gradually nears retirement, a new generation of insurance agents can take the industry forward.  

      Final Words

      Earning good money in an insurance sales job is entirely up to you. The better you do, the more you’ll earn. Since the income for an agent relies on commissions and bonuses, your excellence in sales is reflected in the money you make. If you have a strong work ethic, willingness to learn, and actively put yourself out there, you could quickly be earning more than sufficiently well as an insurance agent. 

      The insurance industry is constantly growing and will always need individuals with potential. And if you live up to your potential, adapt to the changing scenario, and market yourself well, your insurance agent salary will be what you want it to be. 


      Did you find this insurance blog helpful? Let us know your thoughts in the comments below. 

      Frequently Asked Questions (FAQs)

      Is sales experience required?

      While previous sales experience is advantageous, it isn’t mandatory to start in the insurance industry. Still, a strong background in sales is helpful. Since something is better than nothing, any experience selling products to companies will come in handy.  

      Most of the time, new agents learn on the job and receive relevant training to become better insurance sales agents. So, there are ample opportunities for learning about insurance sales. 

      How much does it cost to become an insurance agent?

      According to AGA, the total estimated cost of becoming an insurance agent is $625. This includes courses, licensing fees, exams, and background information. This amount can vary depending on your state of residence. It’s best to check with your state’s insurance regulatory bodies.


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