An independent insurance agent may represent a number of insurance companies, unlike an exclusive insurance agent who works primarily with one insurance company. Because independent insurance agents can represent more than one insurance company, they can search for a variety of insurance policies with different companies for their clients. Additionally, independent insurance agents spend a considerable amount of time traveling to meet clients, closing sales and investigating insurance claims.
Insurance agents serve as intermediaries between insurance companies and those who seek to purchase insurance policies. Insurance agents may focus on servicing their clients in regard to one specific type of insurance, or they may sell a variety of insurance policies. Various types of insurance include life, property, health and disability insurance. According to the Bureau of Labor Statistics, in 2008, insurance agents earned a median annual salary of $45,430. Also, the Bureau of Labor Statistics reports that insurance sales agents occupied 434,800 jobs in 2008. The bureau says that insurance agents are expected to occupy 486,400 spots by 2018 — a 12 percent expected increase in employment for insurance agents over the course of a decade.
Insurance agents are required to maintain a license in each state. The specific requirements to obtain an insurance agent’s license vary by state. Applicants for an insurance agent’s license typically must complete a certain number of hours of prelicensing courses and pass state-administered examinations. States usually require licensed insurance agents to complete continuing-education courses to maintain their license.
The independent insurance agent’s commission is based upon a percentage of the annual premium for the insurance policy. Certain insurance companies pay a flat fee to the independent insurance agent for servicing an insured’s policy.
The actual commission rate paid to an independent insurance agent depends on the insurance company. Other factors that determine the commission for an independent insurance agent include the type of policy and whether the policy is new or a renewal. In general, independent insurance agents earn between 10 percent to 25 percent commission on an insurance policy.
Independent insurance agents aren't employees of the insurance companies. The insurance companies authorize the independent insurance agents to sell their insurance policies. However, independent insurance agents work as independent contractors for the companies they represent and therefore don't earn ongoing salaries or wages with the insurance companies.
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