How Do Life Insurance Agents Get Paid?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

How Do Life Insurance Agents Get Paid?

Captive Agents vs. Independent Agents

Captive Agents

Captive agents are insurance agents who work exclusively for one insurance company. They can only sell policies from that company.

Here are some examples of capitve agencies.

  1. State Farm Insurance
  2. Allstate Insurance
  3. Farmers Insurance Group
  4. Nationwide Mutual Insurance Company
  5. American Family Insurance
  6. Liberty Mutual Insurance
  7. USAA

How They Get Paid: Captive agents typically receive a salary from the insurance company they work for. Additionally, they might earn commissions based on the policies they sell. The commission is usually a percentage of the premium of the policies sold. For example, if a captive agent sells a policy with a premium of $1,000, and their commission rate is 10%, they would earn $100.

Independent Agents

Independent agents, on the other hand, are not tied to any one insurance company. They can sell policies from multiple companies. This gives them the flexibility to offer a wider range of products to their clients.

How They Get Paid: Independent agents like The Annuity Expert get paid directly by the insurance companies whose products they sell. They earn commissions on the sales they make. However, unlike captive agents, they don’t usually receive a salary from these companies.

The key point here is that the commissions are paid by the insurance companies, not the consumers. This means there are no direct fees for the consumer when purchasing a policy through an independent agent. For instance, if you buy a life insurance policy through an independent agent, you will pay the premium for the policy, but you will not pay any additional fees to the agent.

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Life Insurance Commission


Understanding how life insurance agents get paid helps in making informed decisions when purchasing a policy. Captive agents are salaried and may earn commissions, but are limited to products from one company. Independent agents like The Annuity Expert, earn commissions from multiple insurance companies without charging the consumer. This insight ensures you can approach life insurance with confidence.

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Frequently Asked Questions

How much do life insurance agents make?

Life insurance agents make a commission on the policies they sell, so their income can vary greatly depending on how many policies they sell and the commission rate. The average life insurance agent makes $47,860 per year, but the top 10% of agents make over $100,000 per year.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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