How Much Money Do Insurance Agents Make?

Pritam Nagrale

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Do insurance agents really make money? That’s the question thousands of people across America ask nowadays. As insurers take to online marketing of their plans and services, a higher number of Americans prefer to buy insurance plans directly from companies.

How Much Money Do Insurance Agents Make?

This brings us to the second questions, are insurance agents relevant in today’s world, where most of us do online transactions only?

In this article, I will be discussing the relevance of insurance agents and give some insights into how much do insurance agents actually make.

Relevance of Insurance Agents

Going purely by statistics, there are more than 1.2 million insurance agents, brokers and insurance service workers across USA in early 2020. This figure mightn’t sound much. However, if we look at historical growth, it’s clear that number of insurance agents and brokers as well as other insurance service personnel in America is growing.

 And there’re strong reasons behind this growth.

  • Larger number of companies entering insurance business. Over 5,965 insurance companies were doing business in the US and American territories in 2024, says Insurance Information Institute.
  • At the end of 2018, the insurance industry of USA recorded whopping $1.22 trillion worth premiums. Among these 51 percent were in Property & Casualty sector while 49 percent were life insurance and annuities plans. These figures clearly point out that insurance of all kinds is huge business in America.
  • National Association of Insurance Commissioners says (2,507) insurers operate in the Property & Casualty field, 841 in Life & Annuity, 931 in Health, 82 in Fraternal or insurers serving a specific ethnic group of community, 60 in Title or home buying & selling as well as property related titles protection, 239 Risk Retention Groups (239) and 1,305 assorted insurers.
  • Number of insurance agents in USA is projected to grow by 10 percent every year up to 2028, says US Bureau of Labor Statistics.

Given the size of the American insurance industry, it’s obvious that companies require insurance agents to promote their various plans.

In this context, insurance agents and brokers are very relevant to the American insurance industry as whole.

That’s because they play a very major role: they serve as representatives and a bridge between the insurer and customer.

Roles of Insurance Agents in USA

Given the large size of the American insurance industry and various kinds of plans as well as the size of the country, insurance agents play a lot of important roles.

  • Educate individuals, businesses and companies about various kinds of insurance products.
  • Help individuals and organizations to select or customize an insurance policy that suits their specific needs.
  • Serve as negotiator or facilitator between an individual, organization and the insurance company.
  • Promote insurance products from their employer to individual and corporate customers.
  • Follow-up customers for premium payments and payouts.

Considering that each of these is an important role for an insurance company, there’s also fairly attractive salary, perks and commission packages for insurance agents.

So how much money do insurance agents make?

How Much Insurance Agents Make

Anything between $27,500 per year to $125,610 per year, says Bureau of Labor Statistics. However, the median income of an insurance agent stood at $50,940 per year in 2024, the BLS adds.

Now let’s look at how much insurance agents make. 

Actually, this depends upon the type of job of the insurance agent.

Captive Agents

Captive Agents work for large insurance companies. Therefore, they don’t invest time and effort on generating leads to sell insurance plans. As a result, captive agents receive a fixed monthly salary from their company.

Additionally, they’re also entitled for a small commission for every new policy they sell. Generally, captive agents do not get any commissions on premium collections. However, the employer might offer seasonal bonuses and other incentives.

Freelance Insurance Agents

Freelance insurance agents don’t really work for any insurance company. In America, a lot of these freelance insurance agents are former employees of insurance companies and have adequate knowledge of the field.

However, they need to get a freelance insurance agent license from the state where they’ll work.  Selling insurance without proper certification and license can land you in serious legal trouble.

Freelance insurance agents make commissions. The amount varies according to the nature of insurance: life, property and casualty, annuities and so on. However, freelance insurance agents on average make $24.49 per hour, says BLS.

Financial Advisors

Strictly speaking a Financial Advisor isn’t really an insurance agent. They work with banks, credit unions and investment companies. However, there’re lots of financial advisors that work on freelance basis and have tie-ups with investment and insurance companies.

Though insurance isn’t a form of investment, they advise clients on how to buy annuities and retirement plans, among other financial services. In 2019, the median pay of freelance financial advisors stood at $42.24 per hour.

The amount of commission they get from companies for selling insurance is generally kept secret.

Other Income of Insurance Agents

There’re a few other ways that insurance agents also make money. One of them by commissions for selling add-ons to an existing plan.

The other is by creating a single package that includes for example, home, life, automobile and health insurance among others. Nowadays, most insurance clients opt for a single package since it brings down the overall cost of the premium.

Qualifications to Become an Insurance Agent

Since the amount of money that insurance agents make sounds attractive, you might wish to work as one. As I mention earlier, you’ll have to pass an exam and get the necessary certification from the state where you dwell, before becoming a freelance agent.

Or you could join large insurer.

In any case, the minimum academic qualifications to work as insurance agent is high-school degree. And you must possess excellent interpersonal skills, mathematical skills, problem solving skills and others necessary for the profession.

If you have those, go for the certification and licensing as insurance agent from various concerned authorities.

Wrap Up

It’s clear from the above facts that working as insurance agent is fairly attractive. They make fairly good money and the job is quite respectable too. And you too can become an insurance agent to make money.

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