How Do Insurance Agents Make Money

How do insurance agents make money? Insurance agents are licensed professionals who produce a needs analysis and help clients find the right insurance policy to fit their needs. Insurance agents play an essential role in ensuring their client’s family protects from unpredictable financial crises in the future.

If you are wondering about a potentially lucrative and stable career for yourself, you should consider becoming an insurance agent. Not only is the requirement for insurance agents high, but even the average insurance agent usually makes enough to sustain.

Generally, you are asking yourself, how do insurance agents make money? It depends on several different factors. In this context, we discuss how to do insurance agents make money, including other related information.

How Do Insurance Agents Make Money?

How Do Insurance Agents Make Money

If you are enthused about becoming an insurance agent and considering the national average salary for a position, keep in mind this sector’s average wage and salary range. In insurance sectors, an insurance agent can earn two different ways.

Firstly they will join as captive agents work for the insurance company that they appoint. And secondly, they will participate as an independent agent and work with several insurance companies.

The way of making money for insurance agents is very high than other occupations. At the same time, another company offers a fixed salary, but an insurance company doesn’t provide those fixed amounts; they offer a specific percentage as a commission.

However, there are many ways that insurance agents can make money, and their income varies on different factors like the nature of insurance, locality, insurance amounts, claims, a commission of structure, and so more!

The average income of insurance agents is provable $22,000 per year – $212,000 per year. It is not fixed, but it relies on the agent’s skill, working experience, states, and many more. So we say that insurance agents make enough money from different sectors.

What Factors Determine an Insurance Agent’s Income?

There are lots of factors that determine the salary of insurance agents. You should consider those factors when you want to become an insurance agent and increase your salary sustainably. Here we address those factors below.

Type of Agent

There are two types of agents are exist in the insurance market. Your potential salary initially depends on what type of agent you are! If you are captive agents, you’ll sell one company’s product, and income may be relatively low from independent agents.

Captive agents often earn from commissions, but they may also take a salary from their insurance company. They will be able to enjoy a formal office environment and also find other expected official benefits. The cons of these captive agents is a low variety of insurance products because they sell only one company’s products.

Independent insurance has a wide range of insurance products, and they are able to meet any kind of demand, and they work themselves. -however, an independent insurance agent will enjoy endless opportunities to grow his business and the ability to sell a variety of policies from multiple insurance carriers.

So it ultimately depends on your decision of what kinds of insurance agents that you want to do. Sometimes your decision will be influenced by several factors like your specific situation, locality, economic condition, and career goals.

Type of Insurance

Insurance agent’s income depends on various factors, among which insurance types play a vital role in agents’ income. There are lots of insurance policies, but some of those are highly demanded policies -however, if you are selling a home or auto insurance, you can expect to make a percentage of the policy’s premium, as well as a portion of their policy renewal.

Suppose you are selling life and health insurance policies that work under a slightly different pay structure. You can get more advantages from this type of insurance. So it initially depends on your activities and carrier goals that you want to make money as an insurance agent.


If you are an insurance agent, your location may play a vital role in your income. Many factors greatly influence insurance commissions, like crime rates, public health status, accident rates, living costs, and many more. Finally, those pretty local factors are affecting the size of premiums and agent’s commission rates.

If you are crowded with a large population, you may offer more opportunities to find new customers. Still, it may also provide a higher concentration of agents to make a high selling reputation in a more competitive market.


Becoming an insurance agent and making more money mostly depends on the agent’s qualifications. In these conditions, education matters less than formal training. While a bachelor’s degree can be affordable, the position only requires a high school diploma.

Insurance agents must learn how to convince clients to purchase a premium at the training time. Many insurance agents beginning their careers will shadow other agents to understand the position and its requirements better. So it must be required for any insurance agents that how insurance policies are structured and sold are constantly changing their economic conditions.

Commission structure

The commission structure is the most crucial factor in measuring that insurance agent’s salary. The percentage and amount of commissions that you take can determine your income as an insurance agent. You’ll get a handsome amount of money as a commission if you are an independent agent. So the commission structure of an insurance company can play a vital influence in making money.

Insurance Agent Income By State

Insurance agents can not make money equally everywhere. Sometimes their commission depends on locality. Here we inform you about the top ten states that provide the highest salary for insurance agents.


  • Salary range: $22,000 – $210,000 per year.
  • Average salary per year: $92,514. 
  • Average above the nationwide: 32%


  • Salary range: $28,000 – $194,000 (yearly)
  • Average salary per year: $93,235. 
  • Average above the nationwide: 33%


  • Salary range: $22,000 – $212,000 (per year)
  • Average salary per year: $93,371.
  • Average above the nationwide: 33%


  • Salary range: $27,000 – $192,000 (per year)
  • Average salary per year: $91,199. 
  • Average above the nationwide: 30%


  • Salary range: $22,000 – $210,000 (per year)
  • Average salary per year: $92,024.
  • Average above the nationwide: 31%

North Dakota

  • Salary range: $47,000 – $154,000 (yearly) 
  • Average salary per year: $93,719.
  • Average above the nationwide: 34%


  • Salary range: $43,000 – $163,000 (per year)
  • Average salary per year: $94,002.
  • Average above the nationwide: 34%

South Dakota

  • Salary range: $49,000 – $160,000 (per year)
  • Average salary per year: $97,188
  • Average above the nationwide: 39%


  • Salary range: : $47,000 – $157,000 (per year)
  • Average salary per year: $94,369 
  • Average above the nationwide: 34%


  • Salary range: $36,000 – $181,000 (per year)
  • Average salary per year: $95,010. 
  • Average above the nationwide: 35%

Here you will compare the salary of insurance agents. So we assure you that you can find the correct statistics above.

How To Become An Insurance Agent?

If you believe that an insurance agent is the right career for you and want to progress with this career. Now want to know how to become an insurance agent? Becoming an insurance agent is quite challenging if you are an introvert. But if you have strong communicating and convincing skills, then this profession is right for you. 

You should follow some steps to become an insurance agent. For your consideration, we discuss those -however, at the very first, you should research your state’s licensing requirements and fill up those, and take an insurance licensing preparation course to acquire insurance knowledge. 

Set for insurance agents license exam and must pass this exam. Now get appointed with an agency and maintain your license by legal practice. Follow those steps; you will prepare yourself as an insurance agent.

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Final Verdict

In the end, we say that an insurance agent is an excellent dealer who is licensed by their state and appointed by some insurance companies -or at least one insurance agency to sell insurance products to clients.

There are many ways that insurance agents make money, like getting a commission, a salary that provides insurance agencies, and incentives. There are two types of insurance agents such as captive agents and independent insurance agents.

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