How Much Do Insurance Agents Make

Written by: Nik Ventouris

How Much Do Insurance Agents Make

If you are currently considering a career as an insurance agent, you will likely want to know how much you can expect to earn once you’re licensed.

In this How Much Do Insurance Agents Make article, we’ll break down the average insurance agent salary in all 50 states + Washington DC and offer a step-by-step breakdown of the many factors that can affect industry earnings.

Recommended: If you’re interested in becoming an insurance agent, you can have a look at our state-specific insurance licensing guide.

Insurance Agent Salary

The average insurance agent’s salary in the US is $64,919, with the highest percentile averaging around $128,874 and the lowest percentile averaging just $32,702.

Having said that, it’s important to note that salaries in this field tend to vary significantly and are dependent on a number of factors:

  • Location
  • Experience
  • Type of Insurance Agent
  • Type of Insurance Policy
  • Commission structure

Location

The geographical area where you operate as an insurance agent can significantly impact your potential earnings.

Generally speaking, metropolitan areas with higher costs of living and more substantial insurance needs typically offer greater income opportunities compared to rural alternatives.

This is due to the increased demand for insurance products, the higher value of insured assets, and the broader client base available in urban centers. Having said that, you should keep in mind that these areas are also much more competitive.

Below we’ve included a table of the average insurance agent salaries in each state as of February 2024:

StateSalary 
Alabama$54,208
Alaska$67,869
Arizona$66,894
Arkansas$63,418
California$76,832
Colorado$70,325
Connecticut$73,527
Delaware$63,010
Florida$65,192
Georgia$59,215
Hawaii$60,001
Idaho$71,992
Illinois$63,009
Indiana$64,395
Iowa$62,471
Kansas$68,450
Kentucky$62,920
Louisiana$52,297
Maine$72,946
Maryland$64,966
Massachusetts$79,104
Michigan$63,402
Minnesota$69,051
Mississippi$61,281
Missouri$64,966
Montana$60,438
Nebraska$62,648
Nevada$67,304
New Hampshire$69,399
New Jersey$66,382
New Mexico$69,875
New York$66,520
North Carolina$65,602
North Dakota$68,373
Ohio$63,184
Oklahoma$64,591
Oregon$64,892
Pennsylvania$63,371
Rhode Island$71,888
South Carolina$62,173
South Dakota$64,867
Tennessee$62,957
Texas$64,402
Utah$78,338
Vermont$75,626
Virginia$65,544
Washington State$68,848
Washington DC$70,823
West Virginia$67,944
Wisconsin$61,610
Wyoming$61,701

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Experience

Experience in the insurance industry is a valuable asset, and can generally directly correlate with an agent’s earning capabilities.

Let’s look at some data for context:

  • Less than 1 year of experience: $61,804 per annum on average
  • 1 to 2 years of experience: $61,704 per annum on average
  • 6 to 9 years of experience: $73,766 per annum on average
  • Over 10 years of experience: $80,047 per annum on average

Naturally, as your experience increases, so will your earnings. This is generally because more experienced agents are able to secure larger accounts, negotiate better commission rates, and foster repeat business.

It should be noted, however, that this increase is generally quite small at first, with significant income advancements only occurring post year 6.

Having said that, you should keep in mind that this data represents the average insurance agent across the US — you may find that you’re personally able to increase your earning potential much faster than this depending on your qualifications, initiative, and location.

Type of Insurance Agent

Your potential earnings in the insurance industry can also vary depending on whether you’re a captive agent (i.e., an agent that’s working exclusively for one insurance company) or an independent agent (i.e., an agent offering policies from multiple insurers).

While captive agents often benefit from company support, such as training and a steady stream of leads, they can also experience more limited income growth due to the fixed commission rates they’re subject to.

On the other hand, independent agents represent and sell a broader product range and can thus earn potentially higher commissions, but will generally face greater responsibility in relation to generating leads and managing their business operations.

Type of Insurance Policy

Another key factor that can influence your average salary as an insurance agent is the kind of insurance policy you specialize in.

Life and health insurance policies, for example, often provide higher commissions than auto or home insurance (i.e., property and casualty insurance) due to the complexity and larger premiums they involve.

Outside of this general trend, specializing in niche markets with high-value policies and catering to specific demographics are good rules of thumb to follow in order to grow your earnings.

Commission Structure

Insurance agents’ salaries are also greatly influenced by the commission structure they work with. This is because insurance agents can earn through various models, including upfront commissions based on policy sales, renewal commissions for keeping clients on board, a combination of a salary and a commission, or bonus schemes for meeting or exceeding sales targets.

Each commission structure offers different incentives and income streams, which can shape an agent’s potential earnings based on their sales performance and the structure of their compensation package.

Ultimately, determining the most profitable commission structure for you will depend on a number of factors, including your personal financial goals, sales skills, risk tolerance, and the policies of the company you work for.

How to Become an Insurance Agent

If you are interested in becoming an insurance agent, it’s important to be aware that this process is specific to each state.

Having said that, the general process in most states is quite similar, typically including the following steps:

  1. Deciding Which Insurance You Need
  2. Completing a Pre-Licensing Education Course
  3. Sitting and Passing Your State’s Insurance License Exam (line-specific)
  4. Completing a Fingerprinting and Background Check
  5. File an Application with Your State’s Department of Insurance (includes a processing fee)

We’ve broken down each of these steps for you in more detail below.

1. Deciding Which Insurance You Need

The first step you’ll need to complete is to decide which type of insurance you’ll be selling (e.g., life, property & casualty, personal lines, etc.).

Even though there is nothing stopping you from tackling multiple lines at once, we recommend focusing on one at a time. This way, you can allocate a sufficient amount of time towards your preparation and make sure you pass your state’s exam on your first attempt.

Deciding which insurance line you’ll specialize in is important as it affects which exam(s) you’ll need to sit, and as such, which pre-licensing education course and study materials you’ll need to use.

2. Completing a Pre-License Education Course

After deciding which line to specialize in, the next step is to purchase the relevant pre-licensing education course.

This is a mandatory requirement in all 50 states + Washington DC, and can be a massive help when preparing for your state’s insurance licensing exam.

If you need help finding a pre-license course, you can have a look at our in-depth overview of the five best insurance courses.

3. Sitting and Passing Your State’s Insurance Exam

After you’ve completed the mandatory pre-exam education and feel comfortable enough in your preparation, you will be able to take (and hopefully pass) your state’s insurance license exam for the line in which you’re planning to operate.

Even though the structure of these exams can vary from state to state, they generally all follow a multiple-choice question format, and — in most states — are administered via PSI, Prometric, or Pearson VUE.

For more information, we recommend having a look at our state-specific Insurance License Exam article.

4. Completing a Fingerprinting and Background Check

Depending on your state, you may also be required to complete a fingerprinting and/or background check before you can file your application with the state’s Department of Insurance.

This step is meant to ensure that all prospective insurance agents meet the ethical and professional standards expected in the industry; as such, certain history — particularly in relation to fraud or other felonies — can be disqualifying depending on the state in question.

5. File an Application with Your State

The final step to becoming a licensed insurance agent is generally to file an application with your state’s insurance department. This application should include your personal information, proof of completed pre-license education, passing exam scores, and the results of your background check.

Keep in mind that you will also need to pay a processing fee at this stage, which varies depending on your state.

How Much Do Insurance Agents Make FAQ

Is it hard to make money as an insurance agent?

Due to the nature of working as an insurance broker, earning a significant amount of money can be challenging initially due to the need for building a client base, as well as for understanding a diverse number of insurance products. Having said that, significant making money can definitely be made through insurance sales with the right mindset, personal traits, and qualifications.

What type of insurance agent gets paid the most?

Typically, health and life insurance agents tend to have higher earning potential due to larger premiums and more complex products, which often lead to higher commissions. However, insurance brokers that sell insurance in niche markets with high-value policies can also see substantial earnings. For more information, we recommend having a look at our Insurance Licensing guide.

How do insurance agents make money?

Many insurance agents primarily earn through commissions from selling insurance policies. This can include upfront commissions for new policies, renewal commissions for maintaining clients, and sometimes bonuses for exceeding sales targets. Keep in mind that commission structures can vary widely depending on the company and insurance line in question (e.g., health insurance or auto insurance).

How can I become an insurance agent?

In order to become an insurance agent, you will need to complete a mandatory pre-licensing education course, pass your state’s insurance licensing exam (in your chosen insurance line), complete a background and/or fingerprinting background check, and file an application with your state’s Department of Insurance.

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