Welcome to the one-stop shop for Life Insurance Agent Salary!
After reading this article, you will have all the knowledge you need about Life insurance agent salaries in various businesses and organizations.
This results in allowing you to negotiate the best salary range for your promotion or a new job.
You’ll also have all it takes to pick out a few additional work compensation ideas and methods.
We’ll look at the following in this article:
So let’s get first-hand knowledge of what you can make as a life insurance agent, shall we?
Who is a Life insurance Agent?
Life insurance agents are licensed persons who specialize in selling life insurance.
They may work for an insurance company and sell policies that are “carried” by that insurance company, or they may work more independently and sell life insurance from a variety of different insurance companies.
What Does a Life Insurance Agent Do?
The primary duties of a life insurance agent are:
- provide clients with life insurance coverage, insurance policies, and annuities
- Assist customers and beneficiaries in the expeditious handling of insurance claims
Being a life insurance agent necessitates a strong interest in and ability to master the art of marketing.
Apart from the above-listed duties, a life insurance agent also has the following responsibilities:
- Advising clients on the best insurance policies to purchase
- Maintaining and growing customer base by providing excellent customer service
- Expansion of clientele base
- Keeping paper and digital records
- Making claims on behalf of clients
- Bringing on new agents
Life insurance agents are also responsible for selling insurance plans that cover the costs of cremation and funerals, as well as providing money to family members in the event that the rock of the family or the breadwinner dies.
Policy distributions can as well be used to pay off outstanding debts or as an inheritance if the policyholder dies before the policy is paid out.
Cultivating new business through networking in the locale, reaching out to contacts, and cold calling is one of the most difficult tasks a life insurance agent must face.
As a result, the agent organizes a meeting with the prospective buyers in order to assess their needs and make recommendations for life insurance plans that will offer financial protection for their beloved ones.
Annuities, which offer a source of income throughout retirement, can also be sold by life insurance brokers.
It is easier to locate the most appropriate life insurance policy for a customer when numerous business products are marketed together through a broker.
Types of Life insurance Agents
There are two types of insurance agents: independent agents and captive agents.
The main distinction between the two is the extent to which they can penetrate the life insurance market.
Captive insurance agents can only sell insurance for the company for which they work.
They have a strong understanding of the policies available, but their options are limited due to their exclusivity with that company.
However, independent agents (sometimes understood as “non-captive” agents) operate on their own to scout products from multiple insurance companies.
That implies that non-captive agents can shop for and offer life insurance from a far larger pool of companies.
Life Insurance Education Necessities
To work for an insurance sales company, you must have a high school diploma or GED, but many agents have a college diploma or degree.
To sell universal life insurance products, annuities, and term life, all states require life insurance brokers to have a license.
Passing scores on a state-administered written exam and backdrop assessment are required as part of the licensing process.
Many organizations furnish on-the-job training under the management of a seasoned insurance agent.
How Do Life Insurance Agents Get Paid?
Insurance agents are remunerated by commissions based on a portion of the premium. The commission is paid to them by the insurance company from which clients purchased their policy.
The more life insurance policies an agent sells, the more commissions they earn. Independent agents are typically compensated solely through commissions.
A “captive” agent, on the other hand, is paid a regular salary by the company they work for rather than commissions.
In addition, if their employer handles marketing and administrative costs, their income may be a little lower.
The cost of insurance is regulated by each state.
This means that insurance businesses must file a “price list” of all the plans they sell with the state’s insurance agency.
This rule states that an agent selling an insurance policy cannot charge more than what the company charges.
Average Life Insurance Agent Salary
When it comes to compensation, how much does the average life insurance agent make?
Despite the fact that everyone will ultimately meet the grim reaper, no one wants to think about it, which makes the duty of a life insurance agent more difficult.
Even though it is a difficult task, as a life insurance agent if you are up to it, you can earn greater commissions than you would sell other types of insurance products.
Insurance sales organizations seek life insurance salespeople who are self-assured, highly motivated, and aggressive in their pursuit of new business.
No doubt surviving in this highly competitive market is not easy. However, good agents can earn six-figure incomes.
This figure is according to the insurance company AIG Direct report. Despite having only a high school diploma or GED, even the most typical life insurance salesperson can earn more than twice the national average income.
Life Insurance Agent Salary
As printed by the US Insurance, back in 2021, the average salary for a life insurance agent was about $79,750 annually.
AIG Direct, nonetheless, claims that their agents in the life insurance sector earn around $84,900 every year.
Their excellent workers annually earn more than $101,000.
Round the states, the BLS (U.S. Bureau of Labor Statistics), in May 2020, reported that the salary for an insurance agent, including agents in the life insurance sector, averaged about $69,105 annually, but the median salary was beyond $52,150 every year.
Agents who sell life and health insurance products for a life insurance company usually have a different commission structure than those who sell property and casualty insurance. Most of the time, agents will earn substantial upfront commissions with considerably lower renewal rates.
Life and health insurance brokers’ commissions typically range from a percentage of about 39.9 to 100 for the first year’s premium, then about 1-3 percent for renewals, and finally disappear after three years.
For example, a whole life insurance policy with $6,000 in premiums and a 60% commission pays the agent $3,600.
Life Insurance Industry
Because sales fluctuate from month to month, the job of a life insurance agent can be stressful.
Some life insurance agents are paid both a salary and a commission, but the majority of them are paid only on commission.
Commission-only agents often earn more commissions than salaried agents as a tradeoff.
Those paid a salary may be fired if their life insurance sales objectives are not met.
Years of Experience
The development of persuasive abilities and the expansion of professional and social networks are two ways in which life insurance sales representatives can boost their profits.
Customers who are pleased with their agent are more likely to recommend them to their friends and relatives.
Despite life insurance sales positions not being hard to come by, agents with prior experience have a distinct edge when going for positions with respected companies that propose attractive perks and higher commissions such as AIG’s catered events, travel to conferences, and incentive play plans or bonuses pay.
The Increasing Number of Life Insurance Agents
According to the United States BLS (Bureau of Labor Statistics), the hiring rate in the insurance industry will expand by over 6 percent through 2030, which is somewhat faster than the average for all occupations.
As reported by the Bureau of Labor Statistics, the chances of uncovering a job slot at any point in time are excellent because many entry-level insurance agents never meet their sales targets and thus leaving the field for others to occupy.
Insurance Agents Earnings at the Beginning of Their Career
Insurance brokers take pleasure in assisting individuals and organizations in selecting cheap insurance policies that provide adequate coverage for their needs.
Making the transition from high school student to life insurance agent takes only a few months and consists of job shadowing, industry training courses, and passing a state licensing exam.
Insurance agent salaries are low at first, but commissions are a significant source of income.
Insurance agents that are ambitious and charming can succeed in this field.
Factors that Affect Life insurance Agent Salary
Whether you’re new to the insurance sector or considering a career change, you’re undoubtedly curious about how to accumulate the best out of your income.
The importance of education cannot be overstated.
Continuing education classes will assist you in advancing in your area and within your existing employment, allowing you to discuss insurance alternatives with clients.
As you move on with your education, you should also advance your industry qualifications.
Your existing employer can decide to put money into you and assist you to pay for your insurance education.
Your insurance agent compensation is also determined by your experience and expertise.
If you have prior call center or sales experience, this will help you stand out in your insurance call center or sales profession.
When a previous employer compliments you on your soft talents, such as communication abilities, this might boost your value to your insurance company and raise your starting wage.
How to Calculate Your Salary as An Independent Agent
If you want to earn up to $50,000 in your first year as a health or life insurance sales agent, you need to sell just 83 insurance policies per year.
That’s less than seven policies per month!
If you continue this full-time over the years, your earning potential within the next five years would be a whopping $250000.
In total, you only need to sell 42 more insurance policies per year.
That’s a total of 210 policies for five years.
Although being a life insurance broker isn’t as easy as seen in selling auto insurance since a lot of people get discouraged along the way.
However, the career is an excellent one and remarkable job title.
If you are patent enough, you can make six figures on the job, including benefits like end-of-year bonuses and free travel packages.