insurance agent salary
How much does an Insurance Agent make in the United States? The average Insurance Agent salary in the United States is $51,919 as of May 27, 2021, but the range typically falls between $47,418 and $58,567. Salary ranges can vary widely depending on many important factors, including education, certifications, additional skills, and the number of years you have spent in your profession
Insurance Agent sells insurance to new and current clients. May require an associate's degree with at least 2 years of experience in the field or in a related area. Being an Insurance Agent is familiar with standard concepts, practices, and procedures within a particular field. Relies on limited experience and judgment to plan and accomplish goals. Additionally, Insurance Agent performs a variety of tasks. Works under general supervision; typically reports to a supervisor or manager. A degree of creativity and latitude is expected
The most recent government data regarding the average income of American insurance agents was compiled in 2012. According to that data from the Bureau of Labor Statistics:
• The median annual wage for insurance agents was $48,150.
• The highest paid 10% of insurance agents earned more than $116,940 annually.
• The lowest paid 10% of insurance agents earned less than $26,120 annually.
As the numbers show, there is a wide range of possible incomes for insurance agents. Because the amount of money insurance agents earn is comprised largely of commissions and bonuses, the number of sales an insurance agent makes is the biggest factor that contributes to the disparity between the highest and lowest paid of insurance agents. Factors such as the price of the plans they sell and the type of insurance they specialize in also contribute to the wide range of incomes for insurance agents.
What Factors Determine an Insurance Agent's Salary?
The average insurance agent salary is not what all individuals in this occupation make. Insurance agents can make anywhere from below the nation's average salary to six figures. Here are a variety of different factors that can determine their salary.
Type of Agent
Your salary potential differs depending on whether you are a captive agent or an independent agent. Captive agents are tied exclusively to one insurance company's products.
Captive agents have the benefit of having the insurance company generate leads for them, as well as a formal office environment working around other agents. However, a captive agent is limited to selling only one insurance company's policies, making it potentially difficult to achieve a sale.
Captive agents often earn from commissions, but they may also receive a salary from their insurance company. Many also depend on a seasonal bonus to bolster their yearly earnings.
Independent agents work for themselves. While they do not benefit from having an insurance company do the marketing for them, they have endless opportunity to grow their business and the ability to sell a variety of policies from multiple insurance carriers.
Less seasoned insurance agents can benefit greatly from being a captive agent, while someone with more experience in the field may benefit more from being an independent agent. Selecting what kind of insurance agent that you want to be depends on your specific situation and career goals.
Type of Insurance
The type of insurance that you sell helps determine how much you make. Each type of insurance provides its own unique opportunities for attracting new customers and upselling current customers to increase earnings.
When selling home and auto insurance, an insurance agent can expect to make a percentage of the policy's premium, as well as a percentage of their policy renewal. This means that having an ever-expanding network of customers could potentially grow your earnings exponentially.
Life and health insurance policies work under a slightly different pay structure. When a customer first signs up for a policy, the agent makes a large percentage off the sale. The agent also gets income from policy renewal, though at a much cheaper rate. After the third year, many agents stop earning a commission on the policy renewal altogether.
Location is another huge variable in your salary. The cost of living, crime rates, public health status, accident rates, and other local statistics can have a great influence on insurance rates. Ultimately, these local factors affect the size of premiums and thus the insurance agent's commission.
An area with a large population may offer more opportunities to find new customers, but it may also provide a higher concentration of agents, making it a more competitive market. It is important to consider your desired salary and lifestyle before deciding where you want to work as an insurance agent.
The percentage and volume of commissions that you receive can influence your earnings as an insurance agent.
If you are an independent agent, you can generally earn a much higher percentage of your commission.
If you are a captive agent, you will receive a smaller percentage of the policy price. The average insurance carrier gives captive agents a 5-10% commission of any policy sold, while the average independent agent makes around 15% commission.
To become an insurance agent, education matters less than formal training. While a bachelor's degree can be helpful, the position only requires a high school diploma.
As for training, insurance agents must learn through other agents. Many agents beginning their careers will shadow other agents to better understand the position and its requirements. Continuing education is also important, as laws and regulations that influence how insurance policies are structured and sold are constantly changing.
Insurance agents must be licensed by the state that they practice in. Agents may also need to get different licenses to sell different types of insurance. Agents obtain a license by taking and passing state exams around insurance law and ethics.
Compared to many other occupations in the U.S., insurance agents have a good payment and employment outlook. The position is expected to grow by 10% by 2028. Position demand is expected to remain steady because insurance companies will always need a way to search for and obtain new customers. This is especially true for independent insurance agents, who insurance companies are beginning to adopt more frequently to cut costs. The position is also impervious to automation for now. In fact, technology actually has helped insurance agents work more efficiently. New technologies such as market automation software have made it easier for insurance agents to obtain new clients, maintain relationships with them over time, and, ultimately, sell more insurance and policy renewals.