Insurance Agent Salary, is this stressful job worth it?
By: Mahmuda Afreen / Read more about us.
Being an agent in an insurance company is a hard job with a good pay rate in the United States. However, one will have to make their place in this industry to earn well which is hard. Planning from the beginning they need to complete the requirements and be a part of any company. Moreover, different types of insurance agents will have different requirements, demands, and annual income ranges.
Specifically, an entry-level insurance agent’s salary will be $29970 annually. If they continue their job and get more than five years of experience, the median range of the state average is for them. The maximum pay rate is not fixed, but the national estimated amount is $126,510.
If they can sell more policies, they can earn more in this industry. This will require popularity and a strong building of trust among them and the clients. For more information, one can have a look below.
Insurance Agent Salary
If we analyze the jobs and salaries in the United States, the insurance agent is one of the positions after the real estate agent who get the minimum wage. However, the agents in the insurance field will get more wages than the real estate.
Specifically, we know that real estate agents are those who sell the property or help their clients to buy houses or properties. Similar to this, the insurance agents are an important part of a company specifically any insurance company, they help the company to sell its policies to different clients. Those people find individuals who need any specific policies.
Sometimes their annual salary is 3% to 5% below compare to the national average. To have a healthy living style they have to work so hard compare to the other profession. They may have an office to work from but most of the time they have to travel to different areas to meet clients. So, we can say it is a medium-paying yet extremely tiring job. Let’s know more about the topic from the discussion below.
As per the record, these occupations in the USA have at least 422,600 active employment. This number is huge compared to other occupations. It is because almost every organization or institution needs an insurance agent. For example, almost every company offers health insurance to their permanent employees full-time, so they will need more agents to deal with the case.
In the case of the earnings in this job title, most organizations or companies offer commission-based income. They can only earn once they sell something otherwise not. In the United States of America, the common percentage of commission is 5% to 10% each. However, we will focus on fixed income rather than commission in this article.
According to the Bureau of labor statistics, the wage range of this profession, in general, will be,
The highest government average for this position will be $126,510 per Year. However, with the maximum of skills and experience, an individual can earn or get more than this. On the other hand, the entry-level employee of the insurance company should get a minimum of $29,970 according to the national low. This is the lowest amount an employer can offer for this profession.
Is there a different type of insurance agent?
An insurance agent is the common name of the profession. There are many types in it that require different expertise and can have different pay scales. Before going any further we should know the type and analyze the profession to justify the wage. The most common types of insurance agents in the USA are,
1. Health Insurance Agent
This type of agent specifically sells health insurance to people. Getting health insurance in the United States is one of the mandatory things to do. Whether one is a permanent citizen, a foreigner working here, or an international student, every single person will have to have health insurance.
For that, the organization both public and private are always in demand. Also, the agents who specialized in health insurance get the most benefits compared to other agents. Moreover, they need to learn and know all the ethics, rules, and policies related to health.
They will have to interact with not only an individual but also a whole family or a business organization. He or she will have to discuss and provide solid information on every term of the insurance policy. Explaining all the health benefits the client will get from the company and whatnot is the crucial part.
They have to convince the clients that their insurance is the best in the market and they will be always beside the clients in need, and so on. At the starting point, a health insurance agent will get at least $23000. However, the annual average will be around $50000 and it will increase with time and experience.
2. Life Insurance agent
As with health insurance, here the agents will sell life insurance policies of a company. In this job, they will have to explain the policies and benefits the company will provide to their clients. The audience for this job will be a specific age block. For example, they cannot convince a teenager to get life insurance. Rather they will have to target a particular profession group and age group.
The average annual salary of a life insurance agent will be as like that of health insurance. The responsibilities are almost similar for both types so does the pay scale. Which will be $50000 per Year.
3. Automotive insurance agent
The responsibilities of an automotive insurance agent are tricky. Because the interested people are not fixed but random. However, one can get connected with the seller and dealers of different automobiles. But, here the most effective work, as well as responsibility, is promoting insurance. They will have to promote their policies and the benefits to the clients so that they taker search for the giver.
Moreover, they will have to analyze and realize the situation and need against it of the individual customer. The scenario will be mostly different with a different person, so they will have to find out and suggest the best possible offer. The average base salary will be $39,933 to $53,854 from starting to mid. If one wants to increase the salary range they will have to gain experience in the field.
These are the most common type among other types of insurance agents. Moreover, their responsibility of theirs will be almost similar. In short, they will have to have vast knowledge in that specific area so that they can explain every point to the clients and sell the policies.
Responsibilities of Insurance agents of all types
We have already discussed the type and the basic responsibilities of a particular job title. If one wants to know the overall responsibilities of whatever type of job they are holding as an agent, they need to know the things below,
- They will have to call and get connected with potential customers.
- After the positive response, the agents will have to take an interview to get an idea about their financial conditions and all.
- Explaining every single feature and how those will be benefited them is one of the most important.
- If the client is currently under any insurance then analyzing it and comparing it with the offering is another most important responsibility.
- Customizing the policies to offer the best benefit for both customer and the company.
- Handling the maintenance or renewing of the insurance as well as every paperwork.
This is one of the most challenging jobs one can have with some tricky responsibilities. The agent will have to always be up to date with the technologies and laws of the country. Also, they will need to provide place solutions to different issues of the customers finding new leads.
Does it sound stressful? Well, it is one of the most stressful jobs. According to an intense study, most agents feel moderate to a high level of stress during their work as well as after work. So, it will not be easy to cope with the responsibilities easily.
In case of the arising question of the worthiness of this job after seeing the information above, we will say it is subjective. Some of the hardworking agents who have made a strong foundation in the market can earn well. So, to make that place one will have to work their best at the beginning of their career. Once they get the popularity and trust of the people, earning is not difficult here.
Specific requirements to become an insurance agent
One may think that anyone can be in that profession but it is not. It may be easy but they will have to have certain education and skills and fulfill an organizational-specific requirement to get the job and earn enough to survive. Here I will demonstrate the criteria and provide a minimum range of the requirements to have a career in this field.
The minimum education requirement is a high school diploma. If one wants to get into professional life after high school, one can choose this. However, a diploma in communication and psychology will push the career towards getting the best use of the time one spends in this job. Moreover, some companies prefer a candidate with a bachelor’s degree in the relevant field. A person with business and marketing knowledge will be extremely helpful to increase the sale
The training process will start as an intern in the field. The newcomer will have to learn and take training from the old and existing agents. They will teach in the field by giving a real-time experience rather than any bookish knowledge. The entry-level insurance agent can learn the way the agents deal with clients, the communication skills, and how to connect with individuals.
In the USA, every type of agent will have to get a license if they want to work with official recognition. Moreover, the different types of agents will have to get a separate license. For example, a person with a health insurance agent license cannot work as an automotive insurance agent. To get that, they will have to take specific courses and pass the exams.
Specifically, they will have to complete either series 6 or series 7 license exams to get it which is administrated by FINRA. Along with that, one can have different certifications to prove their skills and expertise however, they need to get into any official institutions.
Rather than the discussed point, one will have expertise in some other criteria. If a person is an introvert and has difficulties making communication, this field is a big NO for them. Because this is all about connecting with people emotionally and psychologically.
So that they can understand what the clients want and need even if they cannot express it. Also, this skill will help them make their point valid and convince the customers of any specific policies. Moreover, this will boost the analytical skills to analyze the past, present, and future of the clients regarding different insurance.
On everything, self-confidence and enthusiasm for learning new things, and meeting with new people are necessary. To be the best at this work they will have to enjoy the job. An unpunctual, anger issues, and not having perseverance will be extremely negative.
Annual salary according to experience
We have already given a brief on the difference in salary on experience level. It is a common logic in the job market that a person with maximum experience will get a high level of salary. On the other hand, an entry-level experienced person will get the minimum range of wage. This concept is true for this profession too. The illustrated table below will help understand the difference in salary against experience.
|Years of Experience||Wage|
|Less than one Year||$29,970|
As we said, the entry-level insurance agent will get $29,970which is the lowest range to offer. However, with increasing experience or years of work, their salary will increase proportionally. Once one spends more than ten years of their life in this particular area, they will get the maximum which will be $78,840 or more with other benefits.
The states that offer maximum wage to the insurance agent
As we know the USA has many states and all of them have independent laws for employment under national law. According to the living cost and other facts, the wage range of the same position with the same level will have a different salary in the different states.
Some of the states offer high and some of them offer low. Mainly, the small cities in the not so popular state with less population offer a low range of salary. However, here we will be talking about the highest paying areas for this particular job.
|State||Hourly mean wage||Annual mean wage|
|District of Columbia||$48.10||$100,050|
Here, the District of Columbia which is the capital of this country offers the maximum. Since, the population is high and there is no income tax, like Insurance agents other professions have quite a good income. So, the average wage for agents working in the different insurance companies will be $100000 in the District of Columbia.
Moreover, New York and Massachusetts also offer pretty handsome wage which is close to each other. One with proper education, skills, and other requirements can earn well. Also, in Georgia and New Jersey, they can have a good life with a good pay scale.
Insurance agent wage Vs similar job salaries
America is one of the biggest countries with huge opportunities for variation of work. There are many professions for lowly skilled to highly skilled people. As for the agent type job as we are comparing with an insurance agent, this country has a huge number. Let’s compare some of the similar jobs and the salary range with this one that requires almost similar requirements. So that one can decide on the right profession with a maximum salary.
|Job Title||Entry level requirement||Average pay||The difference|
|Advertising sales Agent||High school diploma or equivalent||$52,340||5.9%|
|Relators||High school diploma or equivalent||$48,770||-2.9%|
|Financial Service sales agent||Bachelor’s degree||$62,910||23.8%|
|Manufacturing sales representative||High school diploma or equivalent||$62,890||23.2%|
We can see from the differential table above, with a similar minimum requirement of education, one can get more salaries in the different job titles. For example, with a high school diploma, one can be a manufacturing service agent but the salary is $62890 annually which is 23.2% higher than the insurance agent position. Yes, it is true that they need to undergo some other requirements such as passing a licensing exam and which can be a little difficult.
One of the closest examples can be the Advertising sales agent with minimum requirements same as this profession. However, the pay scale for advertising agents is 5.9% more than other facilities. One of the lowest rates compare to this is the realtor’s sales agent with a 2.9% downward rate.
However, the saddest part is being a relator a person will not have any fixed salary. They will have to survive on commission at the beginning of their career. Some of them even do not earn a penny as a beginner in this industry as an agent for selling properties.
Sadly, most of the similar professions offer high salaries than this. That is the reason that many of them are quiet. Because some of them cannot sell enough insurance to get their money based on commission. It is not like they are not working hard, they are but the situation is not sometimes in their favor.
Even if this job requires less degree and less skill but it is not something so easy. Communicating with people, and selling something to them which is extremely available in the market is hard. That is why many insurance agents left their job and change their career paths to something else.
The bottom line is before choosing any profession with the minimum requirement, they should look for the other profession requiring the same expertise. This little digging will secure the future with better wages and a better lifestyle.
Companies that offer maximum benefits to their insurance agents
After reading all those information, one may have thought that which company will be highly preferable. Specifically, this country has hundreds of insurance companies offering a different types of insurance. However, all of them do not offer the same pay and benefits to their employees. So, here are some of the names one can choose to work with.
|Family First Life||$118000|
|World Financial Group||$105000|
We have chosen these companies according to thousands of customer reviews online. As we can see, four of these company offers more than the national average. So, the annual average of Family first Life insurance Company will be around $118000. Moreover, the agent with a maximum year of experience will have more.
Besides, the other three also offer a handsome wage. This is the base salary, one can earn more than this with commission and bonus from the company.
Do the insurance agents need to pay any income tax?
The income tax issue of the insurance agents is tricky because they normally earn on commission. If they have a fixed salary range then it becomes easier. According to the state, the income tax policy for this profession will have some deductions. They will fall under self-employment and they can deduct the income tax on some fixed basis of their job costs like traveling costs, and more.
For that, we will suggest saving all the invoices of the monthly cost related to their job. These papers will be needed to present the income tax file and file the deduction application. Also, they can hire any income tax lawyer if the process seems hard in the first place. It is a sensitive issue so they must not show any dilemma here.
These are all to discuss the topic and all to know as a reader or interested person in this job. If the person reading this is planning to pursue a career as an insurance agent will suggest thinking about the challenges they will face. It is important they match their way of thinking, lifestyle, and capabilities with the circumstances in this profession.