How Hard is it to Earn a Living as an Insurance Agent? (2024)

FAQs

How Hard is it to Earn a Living as an Insurance Agent? ›

The career of a life insurance agent is lucrative but involves constant hustling, networking, and many instances of rejection before a sale is ever made. Life insurance agents might be given a small salary to get started but are otherwise primarily dependent on commissions to make a living.

It is not easy to make a living in insurance, but it is not as hard as you might think. As with any type of sales, becoming an insurance agent can be one of the best paying hard jobs or a terrible paying easy job. Dedicated agents will become successful at insurance sales, just like at any other job.

A life insurance agent's income potential is uncapped. Some of the highest earners make well over six figures each year, while others choose to work as part-time insurance agents to earn some extra cash.

Annual income for a life insurance agent can vary from as little as $28,000 per year to as much as $125,000 per year. How much money you can make selling life insurance will depend on a variety of factors, including your own ability to convert leads to customers, as well as the area in which you live.

For auto and home policies, captive insurance agents earn about 5% to 10% of the entire premiums paid for the first year, while independent agents receive about 15%. Commission rates for renewals range between 2% and 15%, averaging around 2% to 5%, regardless of the type of agent.

While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.

Life insurance is the most profitable—and the hardest—type of insurance to sell. With the highest premiums and the longest-running contract, it brings in cash over a long period of time. In the first year, agents make the largest annual sum on a policy, bringing in anywhere from 40–120% of the policy premium.

Most businesses don't make any profit in their first year of operating. It could take anywhere from 18 to 24 months for your insurance sales to actually provide profit. Don't feel discouraged. Every small business owner has to clear this hurdle.

#1 Low Motivation

To be a thriving insurance agent, you have to want to succeed. Failure to work hard is one of the top reasons people in this industry want to call it quits. While it's true that this job isn't easy, it's also true that it can be very rewarding when you allow it to be.

Why do most life insurance agents fail? ›

While people skills are crucial, many insurance agents fail because they do not know the market well enough. One of our survey respondents even claimed that in order to be successful in the insurance industry, 75% of efforts should be in marketing, 20% in sales, and 5% in operations. Marketing can be a daunting task.

One of the primary reasons insurance agents can accumulate wealth is their commission-based income structure. Unlike salaried employees, agents earn a percentage of the premiums they sell to clients. As they build a client base and generate more sales, their income potential increases.

A career as a life insurance sales professional can be challenging. The competition is fierce, and you may experience a lot of rejection before a successful sale. Conducting business in the comforts of your home isn't any different. You should be willing to put in the effort for your venture to grow.

Selling insurance can be a lucrative proposition, with relatively high-paying commissions and a high degree of autonomy with flexible work hours. However, it is not an easy job. You can expect a high rate of customer rejection, stress, and attrition rate.

It isn't the most glamorous profession, and it often gets associated with pushy salespeople that force their products down your throat. But here is the reality: there is a lot of money in the money business! The financial services industry has created more millionaires than any other industry.

Personal Lines

The CSR should be able to handle $100,000 to $125,000 of commission income to the agency. This normally equates to 950 to 1200 accounts...not policies, but accounts. We are figuring, on a national average, that there are approximately 1.7 policies per account.

Selling insurance can be a lucrative proposition, with relatively high-paying commissions and a high degree of autonomy with flexible work hours. However, it is not an easy job. You can expect a high rate of customer rejection, stress, and attrition rate.

Yes, selling insurance can be a good career for independent workers with strong sales skills. Sales agents often earn bonuses and commission, so their income potential depends on their talent.

Having a strong work ethic works hand-in-hand with having good customer service skills. Being proactive both when developing new client relationships and maintaining current client relationships is key to a successful career as an insurance agent.