When it comes to shopping around for life insurance, you will find countless insurance brokers willing to lend a helping hand. Even if you go straight to a life insurance company to negotiate your policy, you may find an insurance broker wanting to guide you through the process and many more advertising online and in print media as if they were the insurance company that they represent. This makes us wonder how much could insurance brokers make, bearing in mind they seem to be everywhere.
Buying Life Insurance
When you are ready to take out a life insurance policy, or about to renew you term life insurance, chances are that you will find an insurance broker in your way. It is not wrong if such thing happens, but since they work on the premise of a commission, you may save money by avoiding them, but you may save time going with them.
Myths on Life Insurance Brokers
It is not true that they earn loads of money if you consider that their based payment is on a commission that varies depending on many factors, including their employment status. Insurance broker’s whose work is based solely on commissions, may not exceed an average salary that any other employee in the insurance industry may earn. However, those brokers who have an assigned salary and still receive a commission can easily duplicate their annual income based on this factor.
The Highest Paid Professionals
Certainly, insurance brokers are listed as the highest paid professionals in the United States, according to the Bureau of Labor Statistics. However, this rank includes not just salary and commissions, but also life insurance, employee’s benefits, commodities and securities, averaging $62,970 a year in 2011, although half of them did not reach $48,000 per year.
Variable Income is a Constant
Money that insurance brokers make has been reportedly inconsistent. Some sources cite that life insurance brokers make on average between $50,000 and $120,000 a year, but these same sources says that nearly half of them are not making $30,000 per year, while just a few of them have reported income that rose to 1 million dollars a year. Even though, many of those millionaire agents combine their earning with side-activities even if related to insurance industry.
Commission Rates Make Also a Difference
While the industry has base wages for insurance brokers, what makes a difference in their annual income are commissions and other variable benefits. Every insurance company has different commission rates, and these rates increase in proportion with the number of life insurance policies sold.
In this matter, each company may pay higher commission to those that work devotedly only for them. However, many insurance brokers work for more than one insurance company, which does not only allow them to make more money.
It does provide them with the ability to offer quotes to prospective clients, so they can decide what is the best option to get life insurance and, obviously, whatever is the choice of the client, the insurance broker will always win a commission this way. This is the main reason that insurance brokers work with several insurance companies to ensure they do not lose a customer to another broker or insurance company.
If your in the market for life insurance it is important to know what is in the interest of the other end of the insurer.
