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Insurance Agent Commission Rates in India

Insurance Agent Commission Rates in India

Insurance agents act as a mediator between insurance firms and the customers seeking insurance policies. Becoming an insurance agent is a beneficial option. A new agent can typically start earning decent commissions from the sale of the policies and their earnings can grow over a period of time. A knack for good communication skills and good sales skills increases the chance of higher earnings.

Insurance PoSP Agents may sell a single type of policy or a variety of insurance policies to their clients. The Insurance Agent Commission varies from company to company and broker to broker. We will learn about the structure of insurance agent commission rates in India.

Commission Under Different Insurance Policies

The Insurance Pos Agent Commission is determined by the policy's term and type (Endowment, Money Back, etc.). The agent's commission is also determined by the type of coverage accessible by the insurer.

The maximum commission an Insurance Agent can earn in the first year is approximately 25% for 15 years or more. After the 4th year, the commission is reduced to approximately 5%.

For Endowment Natured Policies with a term of 15 years or more, there is a first-year commission of 25% and a bonus commission of 10% on the first-year premium. If the Agent is eligible for a bonus, he or she can be paid up to 35%. Otherwise, the maximum Commission due on the First Year Premium will be 25%. Moreover, the sale of life insurance results in repeated commission payments for a single sale.

From April 1, 2017, the Insurance Agent Commission has been in effect as per IRDA rules:

Commission Under Different Types of Policies

Life Insurance

The following is the maximum Insurance Agent Commission rates in India for Life Insurance products:

Single-Premium

CATEGORY

1st MAXIMUM COMMISSION PAYABLE

All Life Insurance Products(except Term Plans)

2%

Term Plans

7.50%

Immediate/Deferred pension or Annuity Plans

2%

1-year renewable Group Term plan

5% of the premium paid or Rs. 10 lakhs(whichever is less).

Group Term plan

5%

Regular Premium

CATEGORY

1st-year

Renewal Commission

Individual Term Insurance

40%

10%

Individual Non-Term Insurance products


For 5 Year Policies

15%

40%

For 6 Year Policies

18%

8%

For 7 Year Policies

21%

8%

For 8 Year Policies

24%

8%

For 9 Year Policies

27%

8%

For 10 Year Policies

30%

8%

For 11 Year Policies

33%

8%

For 12 or more Year Policies

35%

8%

Individual Deferred Annuity/Pension

8%

2%

Health Insurance (General & Stand-Alone Health Insurers)

For health insurance products or stand-alone health insurers, the maximum Insurance Agent Commission rates in India are as follows:

CATEGORY

COMMISSION

Health Individual

15%

Health Group(Employer-Employee)

8%

Health Group(Non-Employer-Employee)

15%

Health Group(Credit linked up to 5 yrs)

15%

General Insurance (Other Than Motor)

For general insurance (other than Vehicle), the maximum Insurance Agent Commission rates in India are as follows:

CATEGORY

Commission to Agents

Commission to Intermediary

Fire-Retail

15%

17%

Fire-Corporate(Risk SI<=25ooCr)

10%

12%

Fire-Corporate(Risk SI>25ooCr)

5%

6%

Marine-Cargo

15%

17%

Marine-Hull

10%

12%

Miscellaneous-Retail

15%

17%

Miscellaneous-Corporate/Group

10%

13%

Motor Insurance

For general insurance (mobile), the maximum Insurance Agent Commission rates in India is as follows:

CATEGORY

COMMISSION

MOTOR(Comprehensive)

15%

MOTOR(Stand-alone TP)

3%

Factors Affecting Insurance POS Agent Commission

Various factors influence the Insurance PoS Agent Commission earned by a PoS Insurance Agent. A successful agent works on all these factors and various aspects of policy sales. Following are some major factors that affect the insurance PoS agent’s commission -

Client Base

It is expected from a PoS Insurance Agent to increase his/her client base to the maximum. A large client base ensures more opportunities for policy sales which indeed ensures a larger commission for the PoS Agent.

Categories

PoS Insurance Agents are allowed to sell a variety of insurance policies to their clients. If an agent sells insurance in more and more categories/varieties, he/she has a better chance to earn more commission.

Number of Companies

A PoS Insurance Agent is allowed to sell the Insurance Products of different insurance companies. Ideally, an agent should work for more than one insurance company for a greater chance to earn more commissions.

Acquired Knowledge

For a PoS Insurance Agent, “The best investment is the investment in the knowledge!” A PoS insurance agent must keep on updating with more and more knowledge about the current affairs and details of various insurance products, he/she will be more successful in increasing the earnings.

How Much Insurance POS Agent Can Earn in India

For an insurance agent, there is no such restriction or obstacle to earning. It is entirely dependent on the individual's potential. On each policy sold, the agent is paid an Insurance Agent Commission; and as an insurance agent sells more and more policies, he/she can earn more and more commission.

Conclusion

Being an insurance agent is a beneficial option because of the lucrative Insurance Agent Commission that an agent earns. IRDA has provided a crystal clear and transparent policy and guidelines based on the commission structure of an insurance agent. A PoS Insurance Agent can maximize his earnings by understanding and maximizing various resources which affect the commission, such as client base, categories of policies, number of companies, and acquired knowledge.

Based on an Insurance Agent’s hard efforts and hard work an insurance agent can as earn in proportion with the efforts he puts into his/her insurance business. Taking into consideration the profitable opportunities to earn more via commissions new entrepreneurs must consider becoming successful PoS Insurance Agents.

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