Agent commission on insurance policy sale

[code31]

Maryland
Is there any legal way or some process to find out how much commission an agent makes on the policy sale? I mean how much is the insurance and how much is the commission the agent gets?
Or is that data stored somewhere or is it not really public information?

[adjusterjack]

Re: Agent commission on insurance policy sale

You can ask your agent. Maybe he'll tell you. It's not a big secret and you can probably google it and get information off the internet.

I'll give you a few basics.

Home and auto insurance - 10% to 15% on new policies and renewals.

Various forms of whole life insurance (cash value kind) - 75% to 125% of the first year premium, 5% to 15% on renewal, decreasing in ensuing years.

Term life insurance - 20% to 25% of the first year premium, 5% to 10% on renewal, decreasing in ensuing years.

Health and disability - Maybe 20%.

Many variations on the above depending on the insurance company, the product, the agency.

[Lexus]

Re: Agent commission on insurance policy sale

There are two types of insurance agents: Captive and Independent. Captive agents work for a specific insurance company, like State Farm. Independent agents work, as their name implies, on their own. There are differences between the way these agents work, and differences in the way they're paid.

Insurance agents who sell auto and home insurance typically get paid based on the written premium of the policy. Typically, the percentage earned as commission ranges between 5-20%. When a policy gets renewed, the agent earns commission again, although sometimes at a lower rate. Agents that put in the effort to build a solid book of business can draw a considerable yearly salary simply from renewals and consistently adding to your book of business can lead to exponential income growth.
Eg: A $1,000 auto insurance policy with a 10% commission provides the agent with $100.
Agents who sell life and health insurance policies are often on a different commission structure than P&C agents. In most cases, agents will earn high up front commissions with much lower rates on renewals. Commissions for life and health insurance brokers tend to be between 40-100% of the first year premium, then 1-2% for renewals, and after 3 years often go away entirely.
Example: A whole life insurance policy with premiums of $5,000 and commission of 70% provides the agent with $3,500.

How Captive Agents Get Paid:

Insurance agents make their living off of commissions, but may also get paid a salary to help the agent as they build their book of business. Captive agents generally receive an initial commission of somewhere between 5% and 10% of the value of home and auto policies that they sell. Then they receive recurring commissions each time their client renews the policy. Renewal commissions for captive insurance agents tend to drop from their initial commission. In addition to commissions, captive agents receive regular opportunities for performance bonuses. Sometimes bonuses can make up 20% or more of a captive agent's income.

How Independent Agents Get Paid:

Independent agents are paid primarily on commission. The more clients they serve, the more money they make. And as those clients renew each year, independent agents continue to make commissions of those policies. In general, however, independent agents receive larger commissions than captive agents. A captive agent at Allstate might make 10% off of an initial sale of a homeowner's policy. An independent agent who sells that same Allstate policy might make 15%. This may not sound like a big difference, but if you write $500,000 in premiums in a year, it's a difference of $25,000 to your salary. Going forward, independent agents' renewal commission percentage normally stays the same. A captive agent's commission percentage structure might be 10-8-6 for the first 3 years of a policy which further decreases overall compensation. An independent agent's commission percentage structure might be 15-15-15. Independent agents typically earn the same as non-salaried captive agents off of health and life insurance policies, and independent agents have no opportunities for performance-based bonuses.