Not all life insurance agents are paid the same. But as a general rule 100% of the first year premiums go to commissions.
If an agent works for a company that supplies him with an office and advertising, he will usually make 50% of the first year commission and the company or agency makes the other 50% to recoup their overhead.
If the agent is an independent broker, he will be paid the entire 100% but must pay all his own business expenses.
It depends on the company and type of policies. I have seen commissions as low as 35% an as high as 110%. Commissions are paid out of a fund from the insurance company, not directly by the consumer. Out of those commissions the agent has to pay for marketing, phone, gas for his automobile, and other business expenses. Most agents do not receive a salary or expense reimbursement.
Agent Owner, Gilmore Insurance Services, Marysville, Washington State
How much commission does a life insruance agent make? Commissions vary by type of product sold and by state sold in. There is a wide range of payouts from 0% (yes, there are products that don't pay a commission) to upwards of 120% for the first year. After the first year, in many cases no further commission is earned.
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If an agent works for a company that supplies him with an office and advertising, he will usually make 50% of the first year commission and the company or agency makes the other 50% to recoup their overhead.
If the agent is an independent broker, he will be paid the entire 100% but must pay all his own business expenses.