How do life insurance agents get paid?

Life insurance agents are paid mainly through commissions on the policies they sell. First-year commissions vary by product: term life typically pays roughly 30% to 80% of the first-year premium, while whole and other permanent policies commonly pay around 100% or more. Renewal commissions in later years are much smaller, typically 1% to 10% of the annual premium. Some agents also earn a base salary, and independent agents may be paid by commission only.

Life insurance agents are typically paid by commission on the policies they sell. Captive agents work for one company and receive a salary plus bonuses, while independent agents contract with multiple insurers and earn commissions on the business they place. Across all insurance sales agents, the median annual wage was $62,280 in May 2025, according to the U.S. Bureau of Labor Statistics.

Life insurance agents are paid commissions by the insurers they represent. In Delaware, a producer who sells an insurer's products as its agent must be appointed by that insurer, and state law bars insurers from paying commissions to anyone without a license. Delaware also does not permit a producer to charge fees to customers in addition to the premium.

Life insurance agents are typically paid by commission. Independent agents may be paid by commission only, while employees of agencies or insurers may be paid salary only, salary plus commission, or salary plus bonus, according to the U.S. Bureau of Labor Statistics. In New Hampshire, carriers appoint producers they do business with within 15 days, and appointments stay active until the carrier terminates them.

Life insurance agents typically earn a first-year commission of 40% to 120% of the policy's first-year premium. Renewal commissions in later years are much lower, commonly 2-15% and averaging 2-5%. Captive agents may also receive a base salary or bonuses from the company they work for, while independent agents cover their own business costs.

Commissions are the most common form of pay for insurance agents, especially for experienced agents. Captive agents work exclusively for one company and may also receive a salary and bonuses, while independent agents sell for several companies and earn commissions. Agents who sell securities or variable products must also obtain Financial Industry Regulatory Authority (FINRA) registration, such as a Series 6 or Series 7.

Life insurance agents are paid by commission from the insurers whose products they sell. First-year commissions on life policies commonly run from 40% up to 120% of the first-year premium, while renewal commissions are much smaller. Both captive agents, who work for one company, and independent agents, who represent several companies, follow this commission structure.