An insurance sales agent in the U.S. earned $49,710 on average in 2017. Your actual income will mainly depend on whether you work on a commission or salary.
The job prospects for this sector are relatively bright, with almost 50,000 jobs slated to open between 2016 and 2026. A 2.8% unemployment rate also makes it an attractive option for entry-level agents or those who plan to make a career switch. You only need a college degree for specialized positions, while a high school diploma is enough for most roles. Aside from education, your skills and experience will determine your exact income potential by starting a career as an insurance sales agent.
What Is the Nature of Employment?
You can be either an independent or a captive agent selling final expense, health, life, home or auto insurance. The type of employment affects an insurance sales agent’s income. Those who work independently have more freedom to choose their hours and offered products, although they won’t have as much support as employed agents of an insurance company.
Independent agents or those who are self-employed account for almost 20% of the industry’s workforce, while around 50% work as captive agents or employees of an insurance agency or broker. The remaining agents work directly for insurance carriers.
How You Can Improve Your Network
Captive and independent insurance sales agents alike should consider working with an Insurance Field Marketing Organization to expand their networks of potential leads, improve their skills, and add certifications, among other benefits. The size of your client base will contribute directly to your actual income. Non-captive agents may have a higher chance of earning more commissions since they can work for multiple companies.
If you’re licensed to sell different insurance products, this also increases your income potential. Take note that most agents earn via commission. You can be employed under an insurance agency with a regular salary in exchange for a lower commission rate.
Usual Rates for Commission
Commission rates vary for every successful sale of an insurance product. For instance, an independent life insurance agent may receive up to 70% of a term life insurance’s first-year premium as commission. Some agents may earn the entire premium amount for the initial year, aside from a 5% commission between the second and fourth years.
An attractive commission rate shouldn’t be your main reason for closing a sale, especially since there is regulatory oversight for such transactions. Sales agents, particularly those selling health insurance, also must be constantly aware of new and upcoming trends in their chosen product line such as planned changes for Medicare by next year.
Most inexperienced insurance agents may earn less than the median salary, but that’s the same with almost any other entry-level jobs. If you’ve decided on selling final expense or burial insurance as your preferred product, a great way to gain leverage early on requires you to be affiliated with an FMO. You should transact with a group that offers high-level contractors and has a good track record of helping agencies with their expansion plans.