Q & A - How much commission does an Insurance Agent earn?

Q - How much commission do Insurance Agents make? How do I start an agency?

A - First things first, you'll need to get licensed in your state and other states you want to do business in(not too hard) you'll need appointment with good companies that sell marketable policies (a little harder) then they'll require you to sign a producers agreement (better look both ways before crossing that street).

Life policies usually pay between 30 and 100% of first year premium, so let's say a policy is $40 / month = $480/year then first year commission = $144 to $480. Some companies pay renewal commission but it's usually a smaller %.

P&C pays around 15% for new and renewal business. Some more, some less, others have smaller renewals, whatever, but let’s use 15% for computations. Then how much you make depends on how much premium you write. Say you write a medium sized trucking company for $2M / year then 15% = $300K/ year - a soft living. If you sell personal lines, and say average HO in your state = $600/year and average auto = $1,800/year then to get to $300K you'll need 833 1/3 customers paying and renewing every year. Since either of these clients is going to work you to death, you'll need to hire some help, pay for an office, buy supplies, marketing E&O insurance and so on..

After a few years in the biz, companies can pay other bonuses: profitability (keep your claims down) retention (keep your customers) and growth (keep them coming to us!!) this can add maybe another 5-10% commission to your bottom line.

Needless to say, unless your dad owns an established insurance agency, this won't be easy. You’ll work years and your success is not entirely in your hands, you’re partners with your insurance companies.
My advice: if you want to work in sales, find a more lucrative profession