Selling Insurance Salary: Understanding the Numbers and Opportunities

Insurance agents play a critical role in protecting the financial interests of individuals, families, and businesses. As such, the insurance industry offers diverse career paths with different salary brackets. In this article, we’ll explore the selling insurance salary, including the factors that influence pay, the opportunities for advancement and growth, and frequently asked questions about insurance selling career.

Factors That Affect Selling Insurance Salary

The salary for insurance sales agents varies depending on several factors, including experience, location, education level, and the type of insurance product being sold. Here is a breakdown of each factor:

Experience

As with many other professions, experience is one of the most critical factors that determine an insurance agent’s salary. Entry-level agents typically earn less than seasoned agents with several years of experience under their belt.

According to the Bureau of Labor Statistics (BLS), the median annual wage for insurance sales agents was $50,940 as of May 2020. The lowest 10 percent of earners made less than $29,710, while the highest 10 percent earned more than $126,200.

So, where do entry-level agents fall in this range? According to Glassdoor, the average base salary for an entry-level insurance agent in the United States is $34,500 per year. However, this amount can vary depending on the company, location, and commission structure.

Location

Location is another critical factor that affects selling insurance salary. Some states and cities have a higher cost of living, which translates to higher salaries for insurance agents. According to the BLS, the top-paying states for insurance agents as of May 2020 were:

State	Annual Mean Wage
Massachusetts	$77,310
Alaska	$76,640
New York	$76,270
District of Columbia	$75,420
Minnesota	$74,370

On the other hand, the lowest-paying states for insurance agents were:

State	Annual Mean Wage
South Dakota	$39,820
Idaho	$41,590
Mississippi	$42,100
Arkansas	$43,060
Montana	$44,030

As you can see, the annual mean wage varies by over $30,000 between the top-paying and lowest-paying states.

Education Level

While a college degree isn’t a requirement for becoming an insurance agent, it can have a positive impact on your salary. According to the BLS, agents with a bachelor’s degree earned a median annual wage of $62,060, while those with a high school diploma or equivalent earned $44,440.

However, the same report notes that many successful insurance agents don’t have a college degree but have extensive experience and training in the field.

Type of Insurance Product

The type of insurance product you sell also affects your salary potential. For instance, selling life insurance may generate higher commissions than auto insurance. Additionally, some products require specialized knowledge or licensing, such as health insurance or annuities.

As such, it’s essential to choose an area of insurance sales that you’re passionate about and that matches your skills and experience.

Opportunities for Advancement and Growth

For insurance agents who are looking to grow and advance their careers, there are several opportunities to consider:

Becoming an Agency Owner

One of the most common paths for insurance agents to grow their careers and increase their earning potential is to become an agency owner. As an agency owner, you’ll be responsible for hiring and training other agents, creating sales strategies, and managing the agency’s finances.

According to Indeed, the average annual salary for an agency owner is $110,000, with top earners making over $200,000 per year.

Becoming a Sales Manager

If you’re passionate about teaching and mentoring other agents, becoming a sales manager may be the right path for you. As a sales manager, you’ll be responsible for training, coaching, and guiding your team of agents to success.

The average annual salary for a sales manager in the insurance industry is $80,000, according to Glassdoor. However, top earners can make upwards of $140,000 per year.

Obtaining Professional Certifications

Becoming certified in specialized areas of insurance can also boost your career and earning potential. For instance, obtaining a Certified Insurance Counselor (CIC) designation can help you stand out as an expert in insurance products and lines of business.

According to Investopedia, insurance agents who hold a CIC designation can earn up to 30% more in salary than non-certified agents.

FAQ About Selling Insurance Salary

What is the earning potential for an insurance agent?

The earning potential for an insurance agent varies depending on experience, location, education level, and the type of insurance product being sold. According to the BLS, the median annual wage for insurance sales agents was $50,940 as of May 2020. However, top earners can make over $126,200 per year.

What are the highest-paying states for insurance agents?

According to the BLS, the top-paying states for insurance agents as of May 2020 were Massachusetts, Alaska, New York, District of Columbia, and Minnesota.

Is a college degree necessary to become an insurance agent?

No, a college degree isn’t required to become an insurance agent. However, agents with a bachelor’s degree tend to earn higher salaries than those with a high school diploma or equivalent.

What are the opportunities for advancement in the insurance industry?

Insurance agents can advance their careers by becoming agency owners, sales managers, or obtaining professional certifications in specialized areas of insurance.

What is the average salary for an insurance agency owner?

According to Indeed, the average annual salary for an insurance agency owner is $110,000, with top earners making over $200,000 per year.

What is the difference between base salary and commission in insurance sales?

A base salary is a fixed amount of money an insurance agent receives from their employer, regardless of their sales volume. Commission, on the other hand, is a percentage of the premium or policy price that an agent earns for each sale they make.

Conclusion

Insurance selling is a fulfilling and rewarding career path that offers different opportunities for growth and advancement. When considering the selling insurance salary, it’s essential to factor in experience, location, education level, and the type of insurance product being sold. With the right skill set, training, and passion, insurance agents can earn a comfortable living and make a significant impact on people’s lives.