Lucrative Insurance Types for Agents
When you decided on a career in the insurance industry, what was your primary motive? Sure, you enjoy talking with people and want to help them make an important decision that could one day affect their lives, but the decision likely had more to do with the potential for good compensation.
For those are willing to work hard, and are good at nurturing relationships with people, there is the potential to make a lot of money in the insurance industry. So, what types of policies offer the highest profit margin?
According to the Independent Insurance Agents & Brokers of America, a national alliance of 300,000 business owners and their employees who offer all types of insurance and financial services products, there are several strong areas to consider. But it seems life insurance, home insurance and automotive policies pay the largest commissions by far.
The commission earned on life insurance policies can be anywhere from 40 to 100 percent of the premium customers pay the first year the policy is in effect. Homeowner’s and automotive insurance policies will earn you between 10 and 15 percent of the premium paid by the client. The percentage paid for the different types of policies varies from company to company, but the commissions listed above are fairly typical.
After the successful sale of an insurance product, regardless of the specific type of policy, the agent who is responsible for acquiring the new client and closing the deal will be paid an immediate commission. The type of policy sold will determine how much commission is earned.
For example, if a client purchases a life insurance policy that costs them $1,000 per year, and your commission is 50 percent, you will receive $500. An automotive policy costing the client $1,200 per year with a 15 percent commission will earn you $180; and a home owner’s policy that costs $1,400 a year with a commission of 10 percent will earn you $140.
The great thing about the industry is that if you work hard and nurture your relationship with your clients – and they renew their policies – you will be eligible for residual or renewal income as well. Typically that ranges from an additional two to five percent of the premium paid.
High-quality leads can also lead to more cross-sales, which will help keep your income steady. After all, the more policies a client buys from you, the more money you make.