How Insurance Agents Make Money?

Insurance Agents are professional and licensed individuals that sell financial products related to insurance coverage. They receive commissions on the policies they sell and serve as advisors for their clients.

Roles of an Insurance Agent

Insurance agents are responsible for understanding and identifying the needs of their clients and recommending the type of insurance coverage or service to meet their needs best. They use their knowledge of insurance products and services to customize the plan for their client. Agents also work to maintain relationships with clients by assisting with claims, providing annual reviews of insurance policies, and providing updates on changes to products, policies, and services. By meeting these roles, insurance agents can make money from insurance products.

Base Pay Plus Commission or Commission-Based Pay

Insurance agents can make money mainly through base pay and commissions on the policies they sell. The base pay is the minimum pay the agent will receive. In addition, agents can receive commissions. The commission rate will vary depending on the type of insurance policy, the amount of coverage, the insurer, and other factors. Commissions are not always a set percentage and can vary based on the individual situation. For example, a policy with a higher amount of coverage will usually result in a higher commission for the agent. Agents typically receive the commission amount at the time of sale of the policy, and most insurance companies will also pay the agent a renewal commission each year when the policy is renewed.

Bonus and Incentives

In addition to the commission they receive, insurance agents can also make money from bonuses and incentives. Bonuses are incentives given to agents for performance and can be based on the number of policies sold, specific goals achieved, and other criteria. Incentives can include additional commissions, trips, prizes, and special recognition.

Other Ways Agents Can Make Money

Insurance agents can also make money by:

  • Providing Advice and Consulting: Agents can make additional money by providing advice and consulting services to clients, such as recommending particular types of coverage and helping to structure policies.
  • Referrals: Insurance agents can often earn referral fees for referring potential customers to other agents or for referring businesses for services such as tax preparation or investment advice.
  • Fees: Agents can also charge fees for services such as disability review, policy design, and policy review.


Insurance agents make money primarily through commissions on the policies they sell, but they can also make money through bonuses and incentives, providing advice and consulting services, referrals, and fees. By understanding their role and working hard to meet the needs of their clients, insurance agents can make money.




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