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 PoS (Point of Sales) 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
The following is the maximum Insurance Agent Commission rates in India for Life Insurance products:
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:
General Insurance (Other Than Motor)
For general insurance (other than Vehicle), the maximum Insurance Agent Commission rates in India are as follows:
For general insurance (mobile), the maximum Insurance Agent Commission rates in India is as follows:
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 -
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.
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.
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.
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.
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.