How much commission would an insurance agent make on a $250,000 life insurance policy?(preferably in Florida)?

Question

Generally speaking about a whole life policy. What would be an average commission. Can you give an example of a calculated 1st year comm. What is an average/general annual premium? Thanks.

Answer 1

There are way too many insurance products (whole life, universal, term) with too many commission rates to give you a correct answer. Straight term insurance may be 5% of the first year's annual premium. Whole life can have a commission rate up to 40% of the first year's annual premium. Other insurance products will be in between those two rates.

Answer 2

The average commission is 95% of the first year premium.  First year premium can be anywhere from $100, for a one year term on a 20 year old, to tens of thosands of dollars, depending on the age, health, and type of policy.

So it's impossible to give you a dollar answer - because there's no "average" premium.  

Kinda like asking, what is the average sock color in 5th grade at a particular school, for the girls.

Answer 3

On a basic term product they will usually get around 100% of the first year premium.  

On a universal life product it gets a lot more complicated and they may only get 20% of the first year premium up to a certain target premium but then get renewals on all of your future premiums and a small percentage of the value you build up in the product (maybe 0.25% to 0.50%).  

That's both ends of the spectrum.  The more complicated the product, then the more complicated the commissions get.

Answer 4

The premiums will be based on the age, s*x, and health of the individual being insured. Their are also riders and options to consider. The company may pay the agent different rates depending on his tenue as well. Many agents get between 20 and 40% of the first year premium but their are too many variables to even consider.

Answer 5

It really depends on the agent's contract with the insurance company and the type of insurance policy it is.

A general rule of thumb is that an independent agent will get paid a higher commission rate than an agent who is a captive agent or an employee of the insurance company or an agency.  

Another thing to consider too is that a captive agent or an employee of a company is probably also earning bonus's in addition to commission, where an independent agent typically won't.

I can't really give you a solid answer as there can be so many variables, as an example say it were a 10 year term policy for $250,000.00 the average commissions could fall anywhere from 40% to 70% of the first year premium.  If it were some type of  Whole Life plan it could be anywhere from 50% to 120%. And if it were a Universal Life it could be as low as 10% up to maybe 100%

But like I said there are so many variables here, it all comes down to the agent contract and the type of policy.

As far as the premiums for this, there are just as many variables, maybe more, as each case is underwritten individually.  Somthing to consider here would be the older you are the more you will pay when you take the policy out, and as different health condidtions are present will also effect someones insurablity when buying a new policy. Because of this, its even harder to give you an answer here.