How Much Money Do Insurance Agents Make?

If you are considering starting your career as an insurance agent, there are probably several reasons why, salary being one of them. The potential income of an insurance agent is appealing, but the actual amount an insurance agent makes can vary quite a lot.

Average Earnings

The median salary for an insurance agent in 2020 was $52,180, according to the U.S. Bureau of Labor Statistics. In that year, the lowest 10 percent earned less than $29,000 while the highest 10 percent earned more than $127,000.

The salary and wages for insurance agent vary depending on experience, skill, and other contributing factors.

Factors that Determine Salary

Type of Insurance Agent

There are two main types of insurance agents: captive agent or independent agent.

Captive agents work directly for one insurance company as a full-time employee. They work on staff and sell only that company’s insurance products. The benefit of being a captive agent is that all the leads are generated for you so you don’t have to spend your own time and money on marketing. Most captive agents will earn a base salary from their company, while also having the ability to earn commissions based on their sales.

On the other hand, independent agents are basically small business owners. They work entirely for themselves, and there are positives and negatives to this. The negatives are they don’t have the support that an insurance company provides such as marketing, branding and lead generation. All of that must be done by the insurance agents themselves. The positive is whatever the independent agent sells is for them to keep — and they can take their business in whatever direction they want.

In general, captive agents make a more stable baseline salary, but independent agents have the ability to earn more in the end.

Type of Insurance Coverage

There are many different types of insurance that an agent can sell, and which ones you sell –and sell successfully– will contribute to how much you can earn.

Auto and home insurance, which are the two most common types of insurance, result in smaller earnings on a case-by-case basis. Agents will typically earn a percentage of the premium on these policies. They’ll also be entitled to a percentage of the total when the policies are renewed. The key with these policies is expanding your network of potential customers, since the largest commissions the insurance agent will make come when they sell new policies.

Insurance agents are paid slightly different for health and life insurance products. At the time the customers signs for a new policy, the insurance agent will make a rather large percentage of that initial sale. Going forward, the insurance agent will also get a cut when the policies are renewed, though that’s usually a much lower percentage than the initial commission. Further, agents may not earn any commissions at all after the third year of the policy renewal.

Structure of Commissions

How much you can earn as an insurance agent will also depend on the structure of your commissions. Independent agents have the ability to earn much more money, because they typically have the ability to earn larger percentages of every sale and renewal they make.

Captive agents receive a lower percentage for every sale they make. On average, captive agents earn a commission between 5% and 10% of the policies they sell. Independent agents, meanwhile, can earn roughly $15%.


Where you sell insurance is a huge determining factor in how much you can make. This isn’t unique to the insurance industry, but what is unique is that the salary potential isn’t necessarily tied to just the cost of living in the area.

For example, the top two locations where insurance agents earn the most money on an annual basis are the District of Columbia ($101,790) and the state of New York ($93,220).

At the same time, the next three states on the list are perhaps surprising: Alabama ($82,340), Wisconsin ($79,890) and Oregon ($79,130).

The five states with the lowest average annual salary for insurance agents are Alaska ($54,271), Louisiana ($53,185), Maryland ($53,059), New Mexico ($48,777) and Hawaii ($39,398).

There are many factors that determine how much you’ll make as an insurance agent, and it’s important to do research into the companies you want to work for and who you want to sell too. Feel free to contact us today and our experienced team will help you establish and grow your insurance business!