Saturday, August 13, 2022

How Much Can You Make Selling Life Insurance

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Geographic Differences For Insurance Agent Salary

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Because premiums for health insurance vary from region to region, and because commissions are typically based on premiums, the commissions you could earn will be influenced by the area in which you live and do business.

In the most recent 2021 Kaiser Family Foundation compensation analysis cited above, California brokers earned more than the national average $15.15 pmpm in the individual marketplace, $33.85 pmpm for small groups, and $15.89 pmpm for larger groups. In Nevada, the numbers were $14.13, $26.24, and $7.14 pmpm, respectively.

Find A Reputable Broker

When trying to find the right broker, a good process is to interview not one but several. Ask questions like: What can you do to improve the offers I get? What is your commission structure? Is it negotiable? Are you licensed in your state? Are you willing to give discounts if I pay for medical expenses? Pay close attention to the transaction costs, because they can easily eat up your profits. Some experts indicate brokers can charge as much as 30% to 50% of the gross policy price, or as little as 5% to 15%.

Tip #: Understand Your Target Market

Once you’ve chosen your area or areas of specialization, it’s time to complete one of the most important life insurance selling tips: study your target market. Understand their challenges, goals, and how your product can help them.

For example, term life insurance is most prevalent in people aged 25-45 who are working their way through key life events. This is typically the age group buying homes, getting married, building families, and saving for kids’ college funds. They usually have a lower net-worth than older age groups and higher debt-to-income ratios.

Knowing these facts can help you understand the market on a more personal level. It’s fairly easy to see that many people in this age group worry about what would happen to their families if they passed away. A wife and mother of three, for instance, is likely concerned about whether her family could stay in their home and pay bills if she were to lose her income.

As such, she is probably looking to ensure that her spouse has everything they need to take care of these things. Insight makes it much easier to determine your target market’s needs and help find potential solutions.

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If I Sell My Life Insurance Policy What Happens When I Die

Unless you choose a retained death benefit or hybrid settlement offer, you give up the beneficiary rights when you sell your life insurance policy.


  • Life Settlements, Secondary Annuities, and Structured Settlements .
  • Life Settlement Industry Report 2018 .
  • Horowitz, Donna, Life Settlement League Tables 2017: Market Grows 19%, Continues Upward Path, The Life Settlement Report, June 7, 2018.
  • Life Settlements .
  • Horowitz, Life Settlements League Tables .
  • Selling A Term Life Insurance Policy

    How much life insurance do you need?

    When selling term life insurance policies, the policy will usually need to be convertible, except in the case of a viatical settlement. If the insured has a terminal illness, a non-convertible term policy could qualify.

    Other policy types, such as group or keyman policies, will need to be evaluated on a case-by-case basis.

    How to sell a term life insurance policy

    You can sell your term life insurance just like any other policy. However, the steps required to sell term life insurance are unique to the policy type and the policyholders specific circumstance.

    In most cases, a term policy must be convertible to qualify for a life settlement. However, term policies on insureds with a short life expectancy may qualify even if the policy isnt convertible.

    Converting term life insurance

    Converting a term life insurance policy means that it is converted into a permanent life insurance policy. This is a relatively painless processbut you may run into trouble depending on the specific terms of your original policy. Some term policies have conversion riders that expire after a predetermined period of time, after which conversion is not permitted.

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    Sell Your Life Insurance Policy Calculator

    In the life insurance business, when a policy owner sells a policy its known as a life settlement. If youre reading this, maybe youre considering selling a policy you have. Were here to offer information and help you if we can.

    First, know that not every policy can be sold. Whether you can sell yours will depend on a few circumstances, as well as the policy itself. The most important factors a potential buyer will consider are your health, the amount of your policy, and your life expectancy.

    By using our quiz, you can find out if your policy qualifies as well as how much you might be able to sell it for.

    Benefit #: Job Prospects

    Compared to most finance careers, becoming a life insurance agent is easy. No educational requirements exist beyond a high school diploma at most. Some states require you to take a licensing course and pass an exam, but truthfully, these are as easy as a fifth-grade spelling test.

    Jobs selling life insurance are everywhere. The online job search sites are full of them. Because most companies offer commission-based pay with no guaranteed income, they have no incentive to limit hiring. They offer jobs to anyone interested and hope a small percentage of hires become productive agents.

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    Be Prepared For Rejection

    The actual execution of the job of a life insurance agent can be disheartening, at least at the start. The first lead you contact is going to say no. The second lead is going to say no.

    A successful, late-career insurance salesperson could make more than $102,000 in salary, commission, and profit-sharing.

    Eventually, after youve shadowed the established agents in the office long enough , you make your first sale and garner the majority of the premium for yourself.

    However, the returns do diminish. After the first year, the commissions may trickle. Expect to earn 35% commission throughout each of the policy’s remaining years. Of course, by that time the idea is to have sold enough policies that such a small percentage represents a comfortable dollar figure. But the rejection a rookie agent has to deal with is overwhelming. The agents who have the wherewithal, the patience, and the resources to ride out the unproductive stretches are the successful ones, without exception.

    The Difference Between Captive Vs Independent Agents

    How Much Money Can You Make Selling Life Insurance?

    If you work as a captive agent for a carrier or an independent marketing organization , you may earn a base salary and a commission on your sales. If your work as an independent agent, your income is most likely to be exclusively commissions.

    You may enjoy additional support from your IMO or general agency, including presentation, enrollment, or other assistance. For example, a captive agent could earn 10 percent commission on the sale of a P& C policy, while an independent agent could earn 15 percent on a comparable policy. That may seem like an insignificant difference however, if you write a half-million dollars in premiums during the year, the difference is $25,000.

    An independent agents commission agreement could offer the same commission for the first three years coverage is in force . In contrast, a captive agent could have a declining commission agreement, earning 10 percent in the first year, followed by a reduced amount . Some companies may offer bonus opportunities on first-year group health business when sold in combination with ancillary coverage like dental, vision, or life insurance.

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    Health Of The Insured

    The insureds current health is important not only because of its weight in the life expectancy calculation, but also because the insureds health at the time the policy was issued relative to today could uncover value within the pricing illustration. Because of this, the insureds health is a major factor in determining your policys value.

    Get Licensed To Sell Life Insurance

    In order to sell life insurance, you must become a licensed life and health insurance agent in your state .

    The basic insurance licensing requirements include:

    • Be at least 18 years old
    • Complete pre-licensing education
    • Pass the state insurance licensing exam
    • Pass a background check

    If you meet these requirements and you are willing to commit to continuing education, you will enroll in an exam preparation course and then pass your state exam.

    We have a complete guide for getting your life and health insurance license here.

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    Overview Of The Insurance Field

    While there are many kinds of insurance , the most lucrative career in the insurance field is for those selling life insurance. Agents focusing on this end of the insurance market help families, businesses, employers, and other parties protect against a financial loss when someone dies.

    Insurance agents selling this type of coverage are either “captive” agents, which means they only sell insurance from one company, or “non-captive” agents, meaning they represent multiple insurance carriers. Either way, the typical insurance agent is going to spend the majority of their time engaging in some type of marketing activity to identify people who might be in need of new or additional insurance coverage, providing them with quotes from the companies they represent, and persuading them to sign the new insurance contract.

    Typically, a life insurance agent receives anywhere from 30% to 90% of the amount paid for a policy by the client in the first year. In later years, the agent may receive anywhere from 3% to 10% of each year’s premium, also known as “renewals” or “trailing commissions.”

    Let’s look at an example of how a life insurance agent earns:

    Benefits Of Selling Life Insurance

    See if selling life insurance is a possible career for you. Learn how ...

    There are many of positives about a career in life insurance sales. Here are just a few.

    Low barrier to entry

    Life insurance salespeople come from a wide range of backgrounds, and there are no specific educational requirements beyond a high school diploma. You can get certified and licensed to sell life insurance without completing a degree program. Requirements vary by state, but attaining licensure and certification usually only takes a few weeks or months at most.

    Flexible hours

    Life insurance sales isn’t a typical nine-to-five job. You need to be available when your clients and prospects are available. Often, that means you’re free to take off during the day and meet with a client in the evening or on a weekend.

    Job opportunities

    Life insurance has been around since Roman times, and the first life insurance companies in the U.S. started during the 1700s. As the population grows, so does the field of life insurance. According to the U.S. Bureau of Labor Statistics, the number of insurance sales agents will grow by 7% per year between 2020 and 2030.

    High commissions

    Because purchasing a life insurance policy is typically a long-term commitment, the commission for life insurance agents is much higher than for other types of insurance. Agents might earn as much as 100% of the first-year premiums for a life insurance policy, before dropping to more standard rates of around 5%.

    Passive income

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    Life Insurance Agents Help People

    Life insurance policies let people make sure their loved ones are provided for after theyre gone. As a life insurance agent, you get to help people make decisions on what insurance policy plans will work best for their beneficiaries. Your research and recommendations can make a big difference for a clients family down the road while offering them peace of mind. And, should an unfortunate event occur, you can provide a measure of comfort to those dealing with loss.

    How To Get Started

    If youve made it this far, youre very interested in learning how to sell life insurance and wonder what the next step is.

    Its pretty simple.

    First, learn how to get your insurance license if you havent already.

    Not sure how to get it?

    Read this article on how to get your insurance license. Itll answer all your questions.

    Once you pass the exam, find an agency or insurance IMO to partner with.

    Do your due diligence. And dont be in any rush to get going.

    In most cases, it takes time to find the right insurance agency. Many jump into the first opportunity presented without comparing.

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    Tip #1: Sell Solutions

    As a life insurance salesperson, you develop the ability to solve problems. Often, people come to you with concerns about the well-being and financial stability of their families. You can provide solutions to their problems.

    When a client expresses concern, pitch them on your life insurance products as well as the answers to their financial difficulties. If prospects perceive life insurance as a way to assist them in solving a problem, you improve your odds of selling them a life insurance policy.

    Selling Life Insurance Is Slow

    How Much Money Can You Make Selling Life Insurance?

    Like retail, customer service, and similar lines of work with high attrition rates, insurance sales typically don’t pay all that well at the onset of ones career. However, unlike those other occupations, the longer you stick around in insurance, the easier and more remunerative it gets, thanks to referrals and residuals.

    Its the sticking around thats the hard part. According to PayScale, the average base salary for entry-level insurance agents is $35,564not including any additional bonuses, commissions, and profit sharingand you may not move up on the pay chart until mid-career.

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    What Determines An Insurance Agents Pay

    So, probably very few agents earn in that $50,000 range. Like other sales jobs, they get better and have higher earnings as time goes on and gain more experience. Although you may have a $50k year, chances are you are on your way to a $75k year next year.

    Here are factors that can determine how much an insurance agent makes.

    Kind of Agent

    Your pay potential varies depending on if you work as a captive agent or an independent agent.

    As a captive agent, you exclusively are tied to one companys products. That single insurance company employs you.

    • The company takes on the responsibility of generating leads for you, although you can create your own, too. You get set up in a formal office environment with other agents, but some companies are now offering the option to work from your home office. However, you are limited to offering your clients policies only from that one insurance company. That could make it more difficult to close some sales.
    • Youll receive a base salary. Sometimes the salary is preset, and other companies allow you to negotiate. Check before you just accept their first offer! Commissions may be supplemented by quarterly bonuses that add to annual earnings.

    As an independent agent, you have your own company. You sell policies from multiple insurance carriers.

    Kind of Insurance

    The kind of insurance you sell determines how much you earn, too.

    How We Make Money

    The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you.

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    Benefit #: Potential For High Salary

    By far, life insurance sales offer the largest commissions in the insurance industry, but it depends on the type of insurance being sold. For example, most auto insurance salespeople earn a percentage of the policy that is purchased. With life insurance, you earn a percentage of the policy when it is sold, and then you get another commission each time it is renewed.

    The U.S. Bureau of Labor Statistics reports that insurance sales agents earn a wide range of salaries. The bottom 10% only earn an estimated $28,000 a year, but in the high range earn $125,000. The median salary comes in at nearly $51,000 a year.

    In addition to high commissions, some life insurance companies advance their agents a specific amount of commission based on calculating the agent’s earning potential rather than making them take it as earned, but others do not. So, for example, on a $100 per month policy, with a six-month advance, you would receive a check for $600 the day the policy is issued.

    The downside occurs if the policy lapses within the first six months if that happens, your employer charges back the unearned portion of your advance.

    How Much Does Life Insurance Cost In Canada

    Pin by couldthanfirst on home insurance

    Life insurance costs in Canada vary according to several factors. These include:

    • The type of policy
    • The age of the policyholder
    • Individual policyholder risks

    When researching policies, its always beneficial to check the current life insurance rates in Canada and compare offers from different providers. You can filter results and ask for personalized quotes based on your requirements. When you contact a life insurance policy provider, you may be asked several questions about your age, your health status, family and medical history, and the level of cover you want to buy. This will allow insurers to give you an accurate estimate.

    The cost of life insurance in Canada ranges from around $15 per month to over $100 per month. Typically, premiums will be higher in the following circumstances:

    • The individual is aged 40 or above
    • Higher risk of death due to health problems
    • High death benefits

    Life insurance for Canadians is recommended if you:

  • Are in a long-term, committed relationship
  • Have children
  • Have other dependents such as a partner or immediate family
  • Have a mortgage
  • Have outstanding or unpaid debts
  • Want to leave money to people or other beneficiaries
  • Want to earn interest or cash out a life insurance policy
  • If any of the above applies to you, its wise to think about taking out a life insurance policy.

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