How Much Does a Life Insurance Agent Pocket?

Disclosing commissions means absolutely nothing anyhow. I may be on a 105% contract where another has a 120% for the same product...no difference in the cost to the consumer.

Direct to the carrier products are not always cheaper since the commissions are removed but the marketing expense is increased as the company has to get the word out where the agents are typically tasked with that.

Got to love reporters that get all the info before they run their mouths to the masses!
 
There is a cost for distribution.
At least with a commission system your costs are skewed to those that sell more of your products.
Sell a three hundred dollar term policy.
Meet the client, get him through underwriting take a few calls a year give him an annual review.
What's the difference that the agent made 85-100 percent?
Years ago, I met with someone and sold him term.
I suggested he put a policy on his wife. which he did.
A year later I delivered a death claim.......Self shopping and the internet does not do this.
 
https://davidkinderfinancial.wixsit...sell-cash-value-policies-for-the-commissions”

What are the commissions for selling life insurance contracts based on?
Commissions on life insurance policies are based on the amount of death benefit secured as well as the length of time that policy is expected to be in force.

1) If I sell a $100,000 10-year term contract, I earn a certain amount.

2) If I sell a $1,000,000 20-year term contract, I earn a certain amount – which would understandably be higher than #1.

3) If I sell a $500,000 cash value contract, I earn a certain amount (that’s probably higher than #1 & #2 combined because it will be securing a death benefit for a longer period and requires a higher premium).

That makes logical sense. How about some real numbers?
Okay, let's compare two different scenarios. Let's compare the following:

1) $10,000 a year permanent life insurance policy premium for 20 years
2) $200,000 into an investment portfolio.

Let's remember that life insurance is a multi-year contract.

I now explain my compensation is generally: 5% of the total anticipated premiums to be paid to the insurance company for 20 years. (For a 10-year term policy, it's probably closer to 10%, while a 10-year permanent plan is probably closer to 3%.) The math works out to be 5% of $10,000 x 20 years = $10,000.

Yes, there is an ongoing renewal compensation that is generally negligible and varies by company and contract for each agent. This is built into the contract and not a separate "line charge" or anything like that.

But what about a $200,000 investment portfolio?
Assuming a total 2% annual charge ($4,000 per year) over 20 years = $80,000 and that's with no long-term growth (or enough growth to "break even" for your charges). Your advisor may only see about half of that compensation for themselves (the other half may go to the actual costs of portfolio management), but I'm looking at the total cost to the portfolio.

While this isn't a true "apples-to-apples" comparison (one is building an asset while one is managing an asset), it can give some additional context for comparing agent/advisor compensation.
 
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