This is a great question. The answer is simple. Brokers/agent's get paid a percentage of the premium you pay. That percentage varies depending on the type of life insurance and how that particular broker/agent is set up with an insurance company.
For term insurance, a 20-30 year term can pay a broker/agent upwards to 120% while a 10-15 will be lower. Permanent insurance such as Whole Life & Universal Life may pay the same as term or much lower, again depending on the company.
Keep in mind that insurance companies do not start making a profit until about the 14th month or so.
If you have more specific questions, do mot hesitate to ask.
When a Term policy is sold, the insurance company pays out from 50% to over 100% of the first year premium for commissions. With Term insurance, if there are any commissions paid after the first year, they are very small. Permanent insurance pays out a residual commission each year that the policy is in effect.
It should be noted that it is not just the agent who gets the commission paid by the carrier. If there is a general agency/brokerage involved (as there usually is), they get a cut. If the agent works for an agency or office, they will probably get a cut. So what the agent earns depends on whether he/she is independent and/or works directly with the carrier, or whether he/she is part of a team that places the policy and shares the commission.
That is a great question! Most insurance agents do not work on a salary, they are paid based upon what they sell. Each type of policy pays a different amount of commission, and different companies can pay the same agent a different amount for the same policy. The commission is a percentage of whatever your policy would cost for a year. So if the policy costs you $1000 for a year, and the agent receives their commission at say, 80%, then they would receive $800 for selling you that policy. There may, or may not be residual money paid to the agent after that, it again depends upon the company, and the policy sold. If you need more detail, please feel free to contact me, I'd be happy to help. Thanks for asking!
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For term insurance, a 20-30 year term can pay a broker/agent upwards to 120% while a 10-15 will be lower. Permanent insurance such as Whole Life & Universal Life may pay the same as term or much lower, again depending on the company.
Keep in mind that insurance companies do not start making a profit until about the 14th month or so.
If you have more specific questions, do mot hesitate to ask.
It should be noted that it is not just the agent who gets the commission paid by the carrier. If there is a general agency/brokerage involved (as there usually is), they get a cut. If the agent works for an agency or office, they will probably get a cut. So what the agent earns depends on whether he/she is independent and/or works directly with the carrier, or whether he/she is part of a team that places the policy and shares the commission.