Insurance companies hire sales agents to generate new business and service current clients. According to the U.S. Bureau of Labor Statistics, the 2012 median pay for insurance agents was $48,150 a year. Agents generate a portion of their income through sales commissions. The amount of the commission varies based on policy type, employer and the amount of insurance sold.
Insurance agents earn commissions as a percentage of the premiums paid by their clients. Commissions on auto liability and physical damage insurance tend to be 15 percent to 20 percent of annual premiums, according to a 2012 Wall Street Journal story. However, some companies, such as the Chubb Group of Insurance Companies, pay higher commissions for some policies. On its website, the Chubb Group says it pays standard commissions of up to 30 percent for auto policies as of July 2014. Homeowners insurance commissions are typically 10 percent to 30 percent of premiums at the Chubb Group, but require more work. BankRate.com reports that life insurance commissions can be as low as 15 percent and as high as 80 percent for the first year and as much as 7.5 percent for renewal years. For health insurance policies, agents earn commissions as low as 4 percent, according to SFGate.com. On its website, UnitedHealthcare says base commission rates for premiums run between 4 percent and 7 percent for groups with 50 or fewer employees.
Some companies pay monthly, quarterly or annual bonuses to insurance agents who reach sales goals, according to the U.S. Bureau of Labor Statistics. At some companies, these bonuses are paid in addition to commissions. At other companies, the bonuses are paid in lieu of commissions.