How Much Does an Insurance Agent Make in Singapore?

Being an insurance agent in Singapore might look pretty straightforward, right? It feels like there are insurance agents everywhere you turn. It’s no wonder you might think that just about everyone you know has some connection to this line of work. Even a casual coffee invitation from an ex-colleague might trigger a thought about a career switch.

The term “insurance agent” carries a certain stigma, leading many to adopt more politically correct titles like “financial advisors,” “life planners,” or “life consultants.”

There are many myths and assumptions about being an insurance agent – unstable and risky income, no basic salary, stressful job environment, and a heavy focus on traditional face-to-face sales. In this article, we are going to look at how much an insurance agent earns and discuss and debunk some of the risks involved.

Financial planning in Singapore is largely a commission-based business, although there are few fee-based advisors. This means it is a results-based business where individuals are paid based on their ability to deliver value and results. There is no hourly pay, so if an advisor can produce results in the marketplace, they will receive compensation. On the other hand, those who fail to deliver value and results will not perform well. On the revenue side, different advisors may have multiple sources, such as life insurance commissions, investment commissions, and general insurance commissions.

Successful advisors tend to focus on one or two segments. In my case, I focus on life insurance for young families and investments, which I work on a fee basis. This industry pays regularly, providing stable commissions. However, these figures may seem high or low depending on where you are in life. Compared to other professions, financial planning commissions are quite stable, but this may change over the years.

Be an Insurance Agent

Myth 1: Need to have a background in insurance or sales to succeed

Mid-career switches are never easy and venturing into the insurance industry with no background knowledge of the field is no small feat. For many of us, it would be outside our comfort zone.

The truth is, most of our agents don’t have a background in insurance sales. They possess other innate, transferable qualities that make them quick learners and successful leaders. While many of our standout agents come in with backgrounds in sales, business, or marketing, it’s not just about where you’ve worked before. It’s about who you are. Traits like a go-getter attitude, self-drive, and strong communication skills are often the real keys to thriving in this field.

From there, we take things up a notch. We offer specialized training to dive deep into the insurance world. We also provide continuous learning opportunities and pair each agent with a mentor for personalized guidance. This support system helps our agents master the nuances of being an effective insurance advisor, ensuring they have all the tools to succeed.

Myth 2: Unstable Income

As with any other job, it can be challenging, especially in a role without basic salary. However, you can find ithis manageable with an understanding and experienced supervisor who is always around providing guidance. Coupled with good colleagues, he is able to build a strong support system to overcome challenges.

A casual search online will not reveal any official statistics on how much financial advisors really earn. This is normal as the amount that financial advisors make varies according to how many clients they can get.

However, if you were to read on Reddit or other forums, we can see some advisors in their 20s making $30,000 to $100,000 per year. These advisors may still be schooling and are bringing home $2,500 to $8,000 monthly, which is pretty impressive.

I also manage to get this figure from Indeed on a particular insurance company in Singapore. The average pay for financial consultants aka financial advisors is around $4,366 per month.

That’s not all.

As financial advisers advance in their careers and begin to expand their teams, they could earn between $200,000 and $500,000 annually, which is about $16,ooo to $40,000 monthly.

On top of that, we should also consider the bonuses that agents may receive in addition to their commission, which will boost their earnings.

Of course, none of the figures above covers business expenses such as transportation, telephone, and gifts. Furthermore, unlike office workers, most financial advisors do not have a CPF contribution or medical coverage.

Still, we can confidently assert that it is a profitable industry.

Average Insurance Agent Salary in Singapore

In Singapore, the earnings of insurance agents and financial advisors depend on experience, qualifications, and their agency.

Entry-level financial advisors usually earn between $3,000 and $5,000 per month with base pay and commission, while experienced advisors make $5,000 to $10,000. Top performers can exceed $15,000 monthly. Earnings often vary since much of it is commission-based and linked to sales. Advisors who go into management can also earn overrides from their agents, focusing on training and mentoring.

Additionally, many companies offer new advisors support packages from $1,000 to $6,000, separate from commissions, to help them start in the industry.

Insurance Commission Structure

We managed to get some commission data from one of Singapore’s biggest insurance firms. Of course, different companies have different commissions rate, and some companies offer a basic salary with a reduced commission structure, however we can take into assumption some generalities.

Insurance Commission Breakdown

Here’s the breakdown of commission rates for participating policies lasting 20 years or more:

Let’s break down the commission rates for participating policies of 20 years or more:

• First Year Premium: 35% – 50%
• Second-Year Premium: 10% – 20%
• Third Year Premium: 5%
• Fourth Year Premium: 3% – 5%
• Fifth Year Premium: 3% – 5%

Now, let’s consider an example scenario: Suppose you opt for a 15-year endowment plan requiring a $300 monthly deposit ($3,600 annually). Your financial advisor would earn 30% of your first-year premium, approximately $1,080. In the second year, their commission drops to 15%, and subsequently decreases to 6%, 3%, and so forth.

Are you surprised to learn that up to 50% of the premium you pay could be going to the agent? Indeed, for certain products, this is the case. It’s no wonder the appeal of becoming an insurance agent is strong. Just imagine selling a product with $2,000 annual premiums – at a 50% commission rate, in the first year alone, that’s $1,000 per product sold. Sell a hundred of these, and you could potentially earn a substantial $100,000 in commissions. Of course, this doesn’t necessarily mean that investment-linked insurance policies (ILPs) or whole-life plans are inherently bad – it’s crucial to consider individual circumstances and needs.

Given the significant earning potential, one might humorously suggest that individuals would “sell their soul” for such commissions. Are these numbers surprising to you?

Now let’s break down to individual products and see how much my financial advisor could be earning from selling me insurance products.

Example Situation

For the calculation of the premiums, I would be using data collected by ValueChampion, a website I highly recommend for comparing different insurance policies.

Hospitalisation Insurance

First up is hospitalisation insurance. This, in my opinion, is the most essential insurance, and everyone who can afford it should get it.

As Singaporeans, we are covered by MediShield Life, a national insurance plan. Under this policy, part of our medical bills is covered by it. However, the remaining which are not covered has to be paid in cash or with our MediSave.

This is where hospitalisation insurance covers the gap. With hospitalisation insurance (Integrated shield plan), the amount of cash required to fork out our medical bill would significantly decrease.

A recommended benchmark is to get a Private Hospital (or at least a public A ward). The reason is that there are differences in treatment from both private and public hospitals, and it’s quite a world of difference in terms of waiting time and services.

For a 25-year-old policyholder (with no pre-existing conditions), the average yearly cost of Integrated Shield Plans for A Ward and Private Hospital Coverage is $90 and $300, respectively.

The average cost for someone 45 years old is roughly $233 and $1061, respectively.

Critical illness

Next is Critical illness coverage. Critical illness insurance offers a lump sum payment when you are diagnosed with an illness covered in the plan. This money can then be used to pay for your medical treatment or cover day-to-day expenses.

There are two types of critical illness insurance. One is a standalone plan which you can purchase independently from other policies while the other is an add-on to a life insurance plan.

The recommended benchmark would be 5x your yearly income, which is around $316,000.

The average monthly cost of adding a critical illness rider to life insurance with CI coverage of $400,000 is $52 for a 25-year-old and $145 for a 45-year-old. On an annual basis, it would cost $624 for a 25-year-old and $1740 for a 45-year-old.

Life Insurance

The final plan which I would add is life insurance. Life insurance will provide a payout of the sum assured when you die or are diagnosed with a terminal illness. In general, there are three types of life insurance policy, namely term plan, whole life and investment-linked policy.

The difference is this. Term insurance has no investment in it, whole life invests in an insurance company participating fund while ILP invests in unit trusts of your choice.

The recommended benchmark is 10 x your yearly income (up till retirement or no more dependents)

I am a ‘buy term invest rest’ type of person as I believe we should not mix insurance and investment. As such, I prefer term insurance to ILP or whole life. From the two charts below, you can also see why I like a term plan over whole life or ILP.

So, with a term life plan, a 25-year-old is expected to spend around $23.77 to $32.69 monthly. While a 45-year-old is expected to pay approximately $54.24 to $76.78.

Others

Other plans that I will not discuss in this article are disability income, accident plans, and annuity plans. These are policies that you can consider depending on your life circumstances.

For guys, you can also take a look at Mindef Aviva Insurance which is an excellent supplement to your insurance at a meager cost.

Total cost of my insurance

To sum up the three insurance plans, here is how much I have to pay if I were to get the plan when I am 25 years old.

• Hospitalisation (Private) – $300 annually
• Critical illness ($400,000) – $624 annually
• Life Insurance (1 million*) – $982 annually
• Total = $1906.5

Total Commission Earned

Disclosing insurance agent commission rates? Isn’t that classified information? Well, while specifics regarding individual companies’ payouts remain undisclosed, the general market range for commissions is no secret, especially considering the abundance of agents in Singapore.

So, let’s delve into the breakdown of commission rates of these insurance products:

Total commission my agent could earn for the first year = ($300 X 0.30) + ($624 X 0.55 ) + ($983 X 0.55 ) = $973.85

You should notice that insurance cost increases exponentially as we thus let us consider how much I have to pay when I am 45 years old

• Hospitalisation (Private) – $1061 annually
• Critical illness ($400,000) – $1740 annually
• Life Insurance (1 million*) – $2303 annually
• Total = $5104

Total commission my agent could earn for the first year = ($1061 X 0.30) + ($1740 X 0.55 ) + ($2303 X 0.55 ) = $2541.95.

Myth 3: It is all about traditional face-to-face sales

We spoke to another agent that is a daughter, wife, mother to a 3-year-old, and a successful insurance agent, and she shared how she expertly balances these roles with ease.

Her answer to juggling all her duties: Leveraging technology by e-meeting clients through video calls such as Teams and Zoom. Income’s Remote Customer Engagement (RCE) platform allows Income advisers to communicate and engage customers anywhere, anytime as they can now virtually meet up with customers to review financial needs securely and complete insurance purchases.

Traditionally, advisers would need to rush from one location to the next to meet their clients. Now, with the use of technology, advisers like Jasmuri can simply e-meet with their customers. With the time saved, many advisers are seeing a boost in their productivity as they can meet and service more customers a day than they used to.

Jasmuri said, “I’m so glad that here at Income, we have leveraged technology in all that we do. This saves time and makes work more efficient. I am now able to connect with more clients remotely. Also, there is flexibility to manage my time and that extra time has allowed me to spend more time with my child and family.”

Myth 4: Tough to get or generate your own leads

Understanding that generating leads could be a pain point for new joiners, Income lends a hand with its Leads Management System (LMS).

In fact, we have a Financial Services Associate Director whose customer base is 80% sourced through the LM. “We assist to review policies for customers who no longer have servicing agents, to make sure this group of customers are not underserved,” she said.

For most customers, their financial needs change across their life stages. And having new advisers reach out to them proves to be helpful as many of these customers have feedback their appreciation for the assistance provided.

Over time, these new advisers will build up their own clientele base through referrals and word of mouth. “When clients feel that we genuinely want to help them equip themselves with proper protection to cater for different milestones, they will naturally introduce their friends and families to us.”

She added, “Without this lead-generating system that Income provides for new joiners, I think I will face more struggles to kickstart this career. I am grateful for the opportunity Income provides. It allows me to touch base with more people and help them with their financial planning.”

There’s a lot of misinformation being thrown around to make this myth sound even more true. You might hear people saying, “Organic leads are the best,” or “If you’re good at what you do, you shouldn’t need to buy leads.” Sure, leads that come naturally through your own efforts are fantastic. But don’t dismiss purchased leads just because you didn’t generate them yourself.

Think about it this way: the cost and effort of generating your own leads can be pretty high. When you buy leads from a trusted source, you’re essentially paying for the marketing muscle you’d otherwise have to build yourself. A reputable insurance tech company can provide leads that were organically generated, just not by you. And that’s something worth considering.

There’s no way around it: At some point, you’ll have to make a decision. Will you invest in blogging, social media, and paying influencers or will you just pay someone who’s already doing it to generate leads? Do you want to spend hours staking out new territory to shake each prospect’s hand or will you just try to make an authentic connection over the phone? The choices are simple enough but you’re shelling out money in whichever direction you choose to go.

Also, don’t forget that leads generated by the right ads do work too. With that said, if you buy insurance leads from a company with a strong advertising campaign, you don’t need to worry that their leads are not “organically generated.”

Selling insurance is largely a numbers game, and you’ll want to reach out to as many people as you can.

When it comes down to it, it doesn’t really matter how how you get the lead if you’re closing more business than ever. Selling insurance is all about numbers, and you’ll want to reach out to as many people as you as you possibly can without going over your marketing budget. If that budget is heavily reliant on purchased leads and this strategy works for you, there’s no shame in your game.

At InsuranceJobs, we selectively partner with financial advisory firms that demonstrate a competitive edge. This edge is reflected in a proven track record of supporting their agents with effective lead generation strategies, including partnerships with hospitals, gyms, and businesses, or by hosting regular seminars and events. Over the years, these firms have shown their commitment to empowering agents for success. If you’re interested in exploring opportunities with us, please feel free to reach out.

Myth 5: Insurance is all about sales

Jumping into the role of an insurance agent isn’t like taking on a typical sales gig. It’s about stepping into a position where you genuinely help people safeguard what they cherish the most. Many agents find deep satisfaction in their work, knowing they’re providing a critical service that protects families and their future.

Being an insurance agent goes beyond just pushing policies. It’s more about building and nurturing relationships with your clients and community. You’re not just dealing with products; you’re engaging with people and trying to make an actual impact on their lives. This line of work lets you play a vital part in making your community stronger, safer, and more secure.

Your journey as an agent starts with finding prospects. Whether you’re guiding someone through a personal insurance decision or advising on a commercial policy, the process begins with connecting with people and understanding their needs. It’s a career where the focus is always on human connection and making a positive difference. From there, you get to know the potential client/member, discover their needs and determine their long-term goals. This will help you develop a policy recommendation that makes the most sense for them.

The financial planning industry is results-based, and advisors are paid based on their ability to deliver value and results to their clients. Successful advisors tend to focus on one or two segments, and the industry pays on a recurring basis. As for building wealth, focus on assets, not income.

In the Views of an Insurance Agent

Understanding why I recommend certain insurance policies is crucial for both you and me. While I aim to present policies as beneficial for your needs, it’s essential to consider if they align with my interests as well. Interestingly, policies that offer greater benefits to you often result in lower commissions for me, as they require less effort to sell. Additionally, I may earn more from policies with longer terms, but it’s important to ensure they suit your needs and don’t lead to financial strain, especially if early cancellation penalties apply.

It’s vital to acknowledge that purchasing insurance solely to support me may not be in your best interest. While our personal connections may influence your decision, most policies generate decreasing returns for me after the initial years. Continuing to pay high premiums may not benefit either of us in the long run. Instead, focus on policies that provide mutual benefits and genuine protection, rather than solely serving my commission earnings.

Being in the world of insurance can be tricky, but it’s its necessary for keeping you and your loved ones safe. As your financial advisor, I put your well-being first, providing custom guidance that aligns with your unique needs. I take transparency seriously by thoroughly explaining all policy options without pushing for higher-commission products. If for whatever reason you feel uncomfortable with our current arrangement, do not hesitate to look elsewhere for options until you find something that you trust and that is transparent. This is what is best for everyone.