Commission Structure of Insurance or Takaful agents
How much does an insurance agent really make?
I have a friend doing insurance and he looks like he is doing really well in his life
So you are thinking about starting a career in Insurance/Takaful? Great!
I’m sure you have that one friend doing very well in life, traveling around the world, wearing nice clothes and winning awards.
You checked his facebook or instagram account and find out that he is actually an insurance agent.
You think to yourself, “does an insurance agent really get that much money?”
You might find that hard to believe considering that you do not have to be super smart to become an insurance agent, you would just need a SPM certificate or equivalent.
So how much do insurance agent actually make?
As revealed by our Deputy Finance Minister, Datuk Ahmad Maslan, insurance agents on average, are making RM 91,000 per year (about RM 7583.33 per month).
A full time agent in the insurance agent would be expected to earn that much with just 2 years of joining the insurance industry as an agent.
In comparison, a fresh graduate would earn about RM 2500 – RM 3000 a month. After 2 years of working, if there is an increase in salary, he/she would only be making about RM 2700 – RM 3300.
The commission structure
- 1st year – 20%
- 2nd year – 20%
- 3rd year – 13.50%
- 4th year – 18.50%
- 5th year – 15%
- 6th year – 15%
An insurance agent would receive commission for as long as 6 years for every sale.
An average policy is about RM 250/month. A full time agent would typically sell about 100 cases per year.
RM 250 x 12 months x 100 cases = Total Production Count of 300,000.
1st year – 20% out of 300,000 = RM 60,000 commission earned in a year. That means after 1 year, that agent is earning RM 5000/month. This is before bonuses, incentives and other rewards.
2nd year – He/She repeats the same amount of business. Commission from 1st year + commission from 2nd year.
RM 5000+RM 5000 = RM 10,000 per month.
3rd year – 1st year commission becomes RM 3,375 (13.5% from 300,000). 2nd year commission is still RM 5000. 3rd year commission is another RM 5000.
RM 3375 + RM 5000 + RM 5000 = After 3 years of working as insurance agent, you can earn up to RM 13,375 per month.
Those are the basics of how the commission structure of insurance agents. Next article, we will go in depth into other bonuses of insurance agents such as :
- High Fringe Bonus
- Persistency Bonus
- Incentives and rewards
How do i become an insurance agent?
If you are earning that kind of money, would you have more money to give to charity? Would you be able to help your parents out financially? Would you be able to afford that dream car or your dream house? Would you finally be able to ‘pop’ the question to your significant other?
I am an Insurance/Takaful agent under the banner of MF Group. An agency contracted with the number one Takaful operator in Malaysia and Asia.
Contact me and we can arrange a meet to get you certified as a license Insurance/Takaful agent.