Insurance agents need to make a living

Dear Mr. Tan,
If life insurance agents sell only term insurance, how can they make a living? The commission is very small.

REPLY
Many insurance agents make a living by earning a earning a commission of $30 to $50 by selling a general insurance policy. They are able to earn an adequate income by selling a few policies a day. In their case, the customers buy from their office. They earn commission on the renewal of the policy.

It is possible for life insurance agents to make a living by selling low cost insurance, such as term, medical and accident insurance. They have to change their business model, to be similar to general insurance.

When a life insurance agent sells term insurance, the customer is likely to ask for a large protection, e.g. $300,000 and pay a premium of $300 a year. The commission can be quite adequate.