How Much Do Agents Make? Comparing Insurance Broker Salaries

Insurance Broker Salary

Comparing Salary For Insurance Brokers (Updated for 2022)

If you’re a recent college graduate, are nearing graduation, or you’re unhappy with your current job (and income), you may be considering a move into sales. One often-touted field is insurance sales. When people are just starting off in the insurance sales industry two common questions often emerge:

  1.  How much do insurance brokers make?
  2. What kind of insurance should I sell?


We’ll discuss both below.

One reason why insurance sales is attractive is because it offers you a lot of flexibility. Another reason to consider the field is the potential for significant income, since you can drive your own success and, usually, earn a commission on each sale.

Insurance sales is also attractive because it’s something a lot of people need. If your focus is property and casualty (P&C) insurance, there’s a built-in market with more than 253 million cars and trucks on the roads in the U.S. (That’s one-quarter billion – with a b – vehicles.) And there are also 126 million households in the U.S., in homes, condos, and apartments, many of which annually purchase homeowner’s or renter’s P&C coverage.

Health insurance is also something a lot of people need – and most don’t really understand. Right now, under the federal Affordable Care Act (ACA), health insurance is something everyone is required to have – or pay a fine.

Last year, more than half of the country had group or individual health coverage, while a third of Americans received health care through public health programs like Medicare and Medicaid. That means there’s a built-in market for individual and family health insurance – and for group medical for those businesses employing more than 50 full-time employees (that are required to offer insurance) and the thousands of small businesses that voluntarily offer health insurance coverage to employees.

Life insurance is also a market niche with significant potential. According to 2017 research released in June by LIMRA, a life insurance research, learning, and development organization, more than half (57 percent) of employees at companies of all sizes ranked life insurance as a must-have benefit. It followed health insurance, prescription drug coverage, a retirement plan, auto insurance, dental insurance, and homeowner’s coverage.


Earnings Comparison – How Much Do Insurance Brokers Make?

Using salary data from Zip Recruiter,  we break down the the base salaries for insurance agents by insurance type in the chart below. It’s important to note that commissions are a large part of insurance agent compensation structure and can add on an additional $10,000 – $100,000 or more in total earnings depending on performance. With that being said here is a look at base (non commission included) salaries for insurance agents:

Insurance Type National  California  Nevada

Property & Casualty (P&C):

$45,753 $44,674 $49,320
Health & Life: $56,858 $63,076 $53,335


P&C agents who sell auto and homeowners insurance typically earn a commission based on the policy premium. The commission ranges from five to 20 percent on the first year premium with a reduced amount often paid for renewals. If you develop a solid book of business, you could earn a robust income for many years selling P&C.

Brokers who sell life and health insurance often earn a high first-year commission and lower commissions on individual health and life renewals. Compensation varies by product and, typically, life policy commissions are in the 40-100 percent range of the first year’s premium, with one to two percent for renewals. Sometimes, after a few years, life commissions end all together.

Health insurance policy commissions have come down in recent years on many individual and family policies, but the latest Kaiser Family Foundation data says the national compensation average in 2020 was $10.86 per member per month (pmpm) for individual coverage. For brokers in the small group market, broker compensation was $20.25 pmpm. For large group health business, comp averaged $7.23 pmpm. This is notable because since the latest published data from our story in 2019 the only coverage line to increase was Small Group by just over a full $1.

If you focus on selling group health insurance, you’ll be working with employers to help them find coverage for their business, employees, and, frequently, eligible family members. In this group consultant role, as the commission show above you have the potential to earn more than you might with individual and family sales, since you’re earning commission on every member in a group.


The Difference Between Captive vs. Independent Agents?

If you work as a captive agent for a carrier or an independent marketing organization (IMO), you may earn a base salary and a commission on your sales. If your work as an independent agent, your income is most likely to be exclusively commissions.

You may enjoy additional support from your IMO or general agency, including presentation, enrollment, or other assistance. For example, a captive agent could earn 10 percent commission on the sale of a P&C policy, while an independent agent could earn 15 percent on a comparable policy. That may seem like an insignificant difference; however, if you write a half-million dollars in premiums during the year, the difference is $25,000.

An independent agent’s commission agreement could offer the same commission for the first three years coverage is in force (for example, 15 percent in all three years). In contrast, a captive agent could have a declining commission agreement, earning 10 percent in the first year, followed by a reduced amount (say eight or six percent in years two and three). Some companies may offer bonus opportunities on first-year group health business when sold in combination with ancillary coverage like dental, vision, or life insurance.


Geographic Differences For Insurance Agent Salary

Because premiums for health insurance vary from region to region, and because commissions are typically based on premiums, the commissions you could earn will be influenced by the area in which you live and do business.

In the most recent 2021 Kaiser Family Foundation compensation analysis cited above, California brokers earned more than the national average — $15.15 pmpm in the individual marketplace, $33.85 pmpm for small groups, and $15.89 pmpm for larger groups. In Nevada, the numbers were $14.13, $26.24, and $7.14 pmpm, respectively.


So What Type Of Insurance Sales Should You Get Into?

While there’s talk about the ACA being replaced, there’s no consensus on timing or the likely replacement. Whatever happens, individual consumers, families, and business owners and managers will continue to need help sorting out all of their insurance options: P&C, health, ancillary, long term care, accident, life, AD&D, and others. That presents ongoing opportunities for you. Pick your niche, get your license, and start down the path to a new career.


How Much Can You Earn as an Insurance Broker?

Find out what you can be earning as an insurance agent in our handy, up-to-date salary guide. Produced by our in-house experts, this resource is bound to help you in advancing your career.

Word & Brown Salary Guide