Insurance Sales Agent Career Path

People skills are important for insurance sales agents.
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Among the career paths in insurance, insurance agents (also called insurance sales agents) sell one or more lines of insurance products and policies. Additionally, some insurance agents may act as financial planners and may be licensed to sell a range of investment products similar to financial advisors. Agents who are employees of a given insurance company are sometimes referred to as "captive agents." Independent agents who sell the products of multiple insurance companies are often called "insurance brokers."

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A Bachelor's Degree is expected. Coursework in finance, accounting and/or economics is helpful, though not required. Strong quantitative and analytic skills are vital. An MBA can give you a leg up in the hiring process, depending on the firm.


Licensing is complicated. Each state has its licensing requirements, which vary by the types of insurance that the insurance sales agent will handle. The industry has been pressing for uniform national licensing standards, to simplify the certification process. Insurance agents who also handle securities products will require FINRA certification, passing either the Series 6 or Series 7 exam. Those who act as financial planners may need the Certified Financial Planner (CFP) designation.

Duties and Responsibilities

Insurance agents advise clients about using insurance products to protect against risk. The job has a large amount of inherent financial planning work, even if the agent does not explicitly engage in a financial planning sideline. Thus, while success is highly dependent on sales ability, strong analytic skills are also vital.

Typical Schedule

The time commitment is variable, depending on the specific insurance agent position and the individual's desire to excel. 40-60 hours per week is a typical range. As in other sales fields, those starting out tend to need a larger investment of time to launch their practices.

What's to Like

Insurance agents often have a high degree of professional autonomy. Those paid largely by commission enjoy a close correlation between performance and reward, with significant earnings potential. The job offers a chance to make a clear, positive impact on your clients' lives.

What's Not to Like

Insurance agents must balance possible conflicts of interest, since compensation is based on sales, without respect to how appropriate the products sold are to the client’s situation. Insurance companies are held not in generally high esteem, so there can be hurdles of distrust to overcome, which can come to a head in disputes over paying out claims.

Salary Range

Per the Bureau of Labor Statistics, median annual compensation was $48,150 as of May 2012, with 90% earning between $26,120 and $116,940. Compensation schemes vary by employer, but a commission-based pay is typical.

According to a study by life insurance industry research firm Limra (as reported in the 3/19/10 Wall Street Journal article "A Hot Job for Hard Times: The Life-Insurance Agent"); a life insurance agent typically must expect to spend at least 5 years before they have a good chance of earning over $100,000 per year. The same report gives this distribution of annual earnings for agents affiliated with a single company who are in their second year:

  • Under $15,000: 28%
  • $15,000 to $34,999: 42%
  • $35,000 to $49,999: 13%
  • $50,000 to $74,999: 9%
  • $75,000 to $99,999: 4%
  • $100,000 to $124,999: 2%
  • $125,000 and up: 2%

Health Insurance Sales Agent Compensation

Health insurance companies are shifting compensation for independent agents from a commission model (in which 4-6% of premiums, and possibly as much as 30% in the first year, is the norm) to a flat fee per policyholder (where $15 per person is typical). This shift is being hastened by the 2010 federal health care bill, which mandates that health insurance companies reduce their ratios of administrative costs (including sales commissions) and profit to premium revenue. The mandated ratios are 20% or less for individual and small group plans, and 15% or less for large group plans. In response, industry observers are predicting that independent agents will start charging clients directly for advice in selecting among plans and insurers. Source: "Health Overhaul Hits Sales Commissions," The Wall Street Journal, 5/18/2010.