A Look at the Average Licensed Insurance Agent Salary

Written by Matthew King, time it takes to read this article is  minute(s).

Are you thinking of becoming a licensed insurance agent?

If so, you’re probably wondering if an insurance career can pay the bills. As inflation skyrockets to a 40-year record high, many Americans are feeling the pinch.

The last thing you want to do is branch out into a new career that doesn’t pay well at a time like this. Fortunately, we have some good news.

Working as an insurance agent can be very lucrative. In fact, it is one of the most financially rewarding jobs that don’t require a degree. 

Curious to get a specific idea of how much you can earn as a licensed insurance agent? Keep reading.

Breakdown of a Licensed Insurance Agent’s Salary

Before we get into specifics on average salary amounts, let’s first take a look at the different ways insurance agents earn. This can vary according to whether you’re a captive or an independent agent, and what types of insurance products you sell.


The primary way insurance agents earn is through commissions. Every time a licensed insurance agent makes a sale, they receive a certain percentage of the commission.

Commission percentages depend on the type of insurance, and the specific commission offered by the carrier.

For instance, auto and home insurance typically pays between 5% and 15% commission. Selling life insurance products, on the other hand, generally pays agents 30% to 90% of the policy price within the first year of the sale.

After this, agents still receive commissions from policy renewals, but these will be a lot less, usually somewhere between 3% to 10%.

Agents that sell final expense insurance also receive high commission percentages during the first year, followed by lower commissions on renewal.


Captive agents that work for a carrier may earn a small salary or retainer alongside their commission. These salaries aren’t usually very high, and most captive agents still earn the bulk of their money from commissions.


In addition to a small salary, captive agents may receive certain employee benefits. Some carriers also offer captive agents discounts on insurance products.

Performance Bonuses

Another way insurance agents can earn is through performance bonuses. A lot of carriers offer what’s known as contingent or supplemental commissions. These commissions reward brokers and agents when they achieve certain sales volumes, profitability levels, retention, or growth goals.

Renewal Commissions

Renewal commissions are another income stream that captive and independent agents can enjoy. As we said above, a lot of carriers pay out renewal commissions every year a policy is renewed. 

For products that pay out high commission levels in the first year (like life insurance), renewable commissions are usually a lot less than the initial commission. For example, the commission in the first year might be up to 120% of the premium, but then drop to 7.5% for renewals.

Insurance products that pay agents lower commission levels in the initial year of the policy tend to pay similar renewals.

For instance, if you sell auto insurance, your commission on the first year of the policy will probably be between 5%-15% of the value. After the first year, you will then receive less in renewal commissions, but still closer to the initial commission percentage.

Over time, renewable commissions can build up into an attractive source of passive income for an insurance agent. Renewals don’t require much active work from you. If you want to take a vacation, sabbatical, or cut back your hours, renewal income can make this possible. 

How Much the Average Insurance Agent Earns

Now that we’ve taken a look at the different earning streams, how much does the average insurance agent earn exactly?

The answer to this depends very much on whether you’re a captive agent or an independent agent. Although captive agents that work for carriers may earn a small salary, their commissions and total earnings are usually substantially lower than the average earnings for independent agents. 

Here’s the latest data on the average insurance advisor salary in the US, for both captive and independent agents.

Average Annual Earnings

Data reveals that the national average salary for an independent insurance agent is $89,730. This is a decent salary. Especially for a professional that doesn’t require a degree. 

The average salary for high-school diploma-level education is $38,792 annually.

What’s more, you’re in no way capped at earning $80k a year as an independent agent. The top 10% of independent agents bring in a whopping $202K annually, which is a fantastic salary potential. 

The average salary for captive agents is a little different. Estimates show that the average salary for captive insurance agents is $50,654 per year. Top-performing agents can push their annual earnings up substantially, but not to the degree that independent agents can.

The captive agents in the uppermost earnings tier bring in around $101,500. This is just over half that of the top-earning independent agents.

Average Hourly Earnings

If you’re thinking of pursuing a new career in insurance sales on the side, it can be helpful to know what hourly earnings you can expect.

The national average for independent agents is currently $43 per hour. For captive agents, the national average is $24 per hour. 

The Insurance Agent Job Outlook

Before you branch off into a new career, it’s always a good idea to do some research on the projected job outlook. Are insurance agents in demand? Yes.

According to the BLS, the demand for insurance agents is predicted to grow by 6% from 2021 to 2023. This is roughly as fast as the average for all occupations.

According to this prediction, you definitely won’t be out of work any time soon.

The Looming Insurance Talent Shortage

What’s more, the insurance industry is heading towards a massive talent shortage. Currently, insurance is one of the most aged workforces in the industry. Currently, one-quarter of the insurance workforce is 55 or older. 

The effects of the aging insurance workforce haven’t fully hit yet, but they are looming large. What’s more, there’s already a lack of young agents, and study results show this isn’t about to change. Currently, a mere 4% of people born between 1981 and 1997 would consider a career in insurance.

So what does this mean for you? Opportunity. No matter your age, a new career as an insurance advisor could be a great choice. 

The less competition there is, the more business for you.

What’s more, if you are young-to-middle-aged, you will also be uniquely positioned to sell to under-served demographics. Insurance agents typically sell within five years of their own age. 

When it comes to things like insurance, most people have more innate trust in advisors that are closer to themselves in age. For instance, a couple in their 30s with a young family will most likely quickly establish rapport with an advisor who’s in a similar stage of life.

A couple nearing retirement who need Medicare insurance? They might have more trust in an agent who’s in their 50s or 60s.

Given that most insurance agents are over 40, this leaves millennials and Gen X with a lot less advice, assistance, and education about insurance than older generations. If you’re in your 20s or 30s, you’ll be able to serve these demographics with more ease.

Factors That Influence Your Salary Potential as an Insurance Agent

As you can see, a new career in insurance sales could have great salary potential. But, the average salary amounts we listed above are just that, averages.

There are a variety of factors that can influence exactly how much you take home at the end of the day as an insurance agent.

Whether You’re an Independent or Captive Agent

Average salary numbers clearly show the difference in earning power between captive and independent insurance agents. Although captive agents may earn a base salary from carriers, this is usually quite low. Captive agents also typically earn substantially lower commissions. 

At the same time, it’s also important to note that while independent agents usually earn more, they may also have more expenses. As an independent agent, you need to market yourself and cover all operational costs. What you earn from commissions isn’t necessarily your take-home pay.

Independent Insurance Agents Can Build Equity

However, independent agents still tend to come out on top financially, especially if they invest in the right training.

If you stick with it, the money you put into marketing yourself doesn’t just evaporate. If you dedicate yourself to growing your book of businesses, you’ll be building equity. Instead of working for someone else, you’ll have the opportunity to build a brand and business that generates profits far into the future. 

Independent Agents Have Ownership Over Their Renewals

Speaking of generating profits, independent agents also have more potential for growing their passive income streams from renewals. As we said above, renewal commissions can be a valuable source of passive income for both independent and captive agents.

However, while captive agents can receive renewals, they don’t own them. When a captive agent leaves their carrier, they have to forfeit their renewals. Over time, this can constitute a large loss. 

Seasoned agents who work directly for carriers can become trapped by this non-ownership of renewals. If leaving a position with a carrier will mean losing $20K in renewal income each year, you might feel forced to stay, even if you’re yearning for more independence and freedom.

Independent Agents Have More Freedom

Speaking of freedom, this is another strong draw to becoming an independent agent. Survey results show that an unprecedented amount of traditionally employed professionals (40%) are considering self-employment. 

If you want to be in the driver’s seat, call the shots, manage your own time, and gain freedom from a boss, becoming a licensed insurance agent could be the way to go. 


Another influencing factor on how much you can earn as a licensed insurance agent is your experience level. As a brand-new agent, you will need to devote time to learning the ropes, getting ultra-familiar with all the products you sell, and honing your selling techniques.

During this initial stage, it’s unlikely that you’ll close as many sales as you will after a year or two in the business. But, you can fast-track this learning curve by investing in comprehensive training. 

Sales and Marketing Training

The amount of training you have is probably the biggest influencing factor on your earnings potential. To become a licensed insurance agent you will need to sit a licensing exam.

Most states require some level of coursework prior to the insurance licensing exam. This coursework will teach you the fundamentals of how certain insurance products work, and the state laws around selling insurance.

What it will not teach you is how to actually sell insurance. If you want to become a top-performing agent, you need to hone your selling techniques. You also need to know how to market yourself, generate high-quality leads, and grow your business as a whole.

This is where we come in.

Have you been looking for comprehensive insurance agent training? Have you been met with a bunch of dead ends?

Insurance sales doesn’t have a lot of barriers to entry, but great training can be hard to find. Many training providers will nickel-and-dime new insurance agents at every turn, charging recurring fees, monthly memberships, or commission cuts. 

Providers might also limit training access by sales numbers. In other words, instead of being able to access the training products you need, you have to struggle along with a bare minimum of training until you meet a certain production number.

Even if you find a program that’s fairly priced and available to all agents, you might still find that it’s administered via in-person sessions that are costly and inconvenient to travel to.

Ready for some good news?

Here at InsuranceSales101, we know how pivotal comprehensive, accessible, and affordable training is for agents. This is why we set out to create an agent training program that anyone can access for a once-off price, with no recurring costs or production limitations. 

Our programs also include access to one-on-one coaching and mentorship. We currently offer training for selling annuity insurance, final expense, life insurance, and Medicare. 

Are You Looking To Become a Licensed Insurance Agent?

Starting a new career as a licensed insurance agent can be a successful, rewarding, and financially lucrative choice. If you decide to become an independent agent, you can also enjoy freedom from a boss, and the opportunity to build your own business and create passive streams of commission income.

But, if you want to become a top-earning insurance agent, it’s critical that you invest in the right training.

Here at InsuranceSales101, we pride ourselves on providing some of the best training in the industry. For a once-off, affordable cost you get on-demand access to comprehensive, effective training that will equip you with the strategies you need for success, as well as discounts and free access to tools and resources for growing your business.

Check out our Insurance Advisor Elite Training Program to enjoy an all-in-one pass to all our current and future training programs, tools, and resources.

Join Insurance Advisor Elite

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