Are Life Insurance Commissions Healthy for the Industry?

Life insurance agents make their money through the life insurance commission and premiums. The commissions are there to attract quality agents who will work to find new policy holders. These life insurance commissions can be very good for the industry, but also present some challenges because the prices can be high.

Drive Up Prices

Life insurance agents can receive anywhere from 30% to 50% commission from the different policies that they sell. Some whole life insurance policies have a 90% to 95% commission rate. Because of this, there is a propensity to drive up the costs so the parent company will make some money.

Give Insurance Agents Incentive

The industry of selling insurance is not one of the most accepted. Because of necessity people will go to an insurance agent. However, many do not have life insurance because of the cost. Having a life insurance commission available gives the agent an incentive to sell the life insurance policy and even work with the customer to get them into a new policy.

One of the Benefits

Life insurance commission will allow the agent to deliver to the customer the ability to better customize the policy. It doesn't matter if it is a term life insurance, or cash-value life insurance, the commission process helps out the policy holder.

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