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How much salary can an insurance agent really make in Singapore?

There are many assumptions about being a financial planner – Unstable and risky income, stressful job environment, and a heavy focus on traditional face-to-face sales this list goes on. However, in this article, we are going to show prove them wrong by discussing and debunking these myths.

1. You don’t have a background in insurance or sales to succeed

Many financial planners join the industry after unsuccessful runs at other careers or simply because they want to try something new. The skills that they pick up from their previous jobs continue to be useful and relevant in their insurance careers. For example, someone who has a background in customer service can easily utilize communication and problem-solving skills in financial planning.

Deciding to switch careers is never easy and entering the insurance industry without any background knowledge or experience in the field can seem daunting. For many of us, it would be outside our comfort zone. But for some, they have managed to adapt quickly with support from their management team and mentors. The insurance industry is full of people who are very eager to help and guide people who are new to the industry to learn and improve their skills at their own pace.

Many or most financial planners do not start with a background in insurance. They usually already have other inherent, adaptable qualities that enable them to be fast learners. Though many successful financial planners do have some background in sales, business, or marketing, certain personality traits, such as having an entrepreneurial spirit, self-motivation, and the ability to communicate effectively. These are the common traits or skills to have that can lay the right foundation for success in becoming a financial planner. But even if you do not have these innate abilities or knowledge, most agencies are dedicated to providing their agents with all the necessary tools and resources to help them become successful and competent financial planners.

2. Your income grows over time

This is one of the most common and further from the truth about being a financial planner. Today, many of those who are new in this line of work can expect to receive a monthly package (From $500 to $4,000/m for up to a year excluding commission!), some even during the process of acquiring the required certifications to ease you into the role. They can learn while they earn which provides assurance and safety through the journey of becoming a financial planner. Some trainees go through personal mentorships guided by experienced superiors, which provides an even greater sense of security. Just like any other job, this job can be challenging. However, it is manageable with an understanding supervisor guiding you along the way.

The amount that a financial planner makes varies according to how many clients they can get. The typical salary range of a financial planner in their 20s can be between $30,000 to $100,000 annually. These people may even still be receiving an education and can earn $2,500 to $8,000 monthly. According to Indeed, the average pay for financial planners is around $4,366 per month. Furthermore, as financial planners continue to advance in their careers and begin to expand their teams, they can earn up to $500,000 annually (We know of agents that earn over the $1m mark with less than 5 years in the industry). This is not including the bonuses that they may receive in addition to their commissions. It is safe to assume that this is a profitable industry.

But how exactly are financial planners able to earn this much? Let us take a look at a breakdown of how much customers are paying for insurance and the earnings of the financial planner.

Insurance Commission Structure

The following commission data was collected from one of Singapore’s biggest insurance firms. Keep in mind that different companies have different commissions rate. Therefore this is only a rough estimate and should be taken as such.

Let’s say, you purchase a 15-year endowment plan that required a $300 monthly deposit ($3600 annually). Your financial planner would earn 30% of your first-year premium, around $1080. In the following year, they would receive 15% and subsequently 6%, 3%, and so on. Now let’s break down individual products and see how much a financial planner could be earning from selling these insurance products.

Hospitalisation Insurance

The first product is hospitalization insurance. This is arguably the most essential insurance that every person should have if they can afford it. Singaporeans are covered by MediShield Life, a national insurance plan. However, this plan only covers a part of your medical bills and the remaining uncovered amount has to be paid out of pocket. This is where hospitalization insurance fills in the gaps. If you possess hospitalization insurance, the amount payable for your medical bill would be significantly less. 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. While the average cost for someone 45 years old is roughly $233 and $1061, respectively.

Critical illness

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 any daily expenses that you may need. 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 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

Life insurance will provide a pay-out of the sum assured when you pass away or are diagnosed with a terminal illness. There are three types of life insurance policy, term plan, whole life, and investment-linked policy (ILP). The difference is that term insurance has no investment in it, whole life invests in insurance company participating fund while ILP invests in unit trusts of your choice. For this calculation, we will use the term life plan. So, with a term life plan, a 25-year-old is expected to spend around $23.77 to $32.69 each month. While a 45-year-old is expected to pay approximately $54.24 to $76.78.

Others

Other plans that are not discussed in this article are disability income, accident plans, and annuity plans. These are policies that can be considered depending on your life circumstances.

The total cost of insurance
To sum up the three insurance plans, here is roughly how much a 25-year-old adult would have to pay.

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

Total = $1906.50

You are looking at a total commission the insurance agent could potentially earn from one individual in the first year
($300 X 0.30) + ($624 X 0.55 ) + ($983 X 0.55 ) = $973.85

Taking into account that insurance cost increases exponentially as we age, so let us consider how much a 45-year-old would have to pay.

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

Total = $5104

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

Furthermore, They often also receive so-called “renewal” commissions from one single life policy for up to the next five years! After looking at these numbers, it isn’t surprising to know that while it might be challenging for those just joining the industry if we do not take into account many agencies out there offering a basic salary ranging from $3k – $6k /monthly for the first year in addition to the commission, veteran financial planners can have a very profitable and successful career.

 

3. It’s not just face-to-face sales anymore

Many financial planners are utilizing and taking advantage of our current tech-savvy world. Insurance sales can now be done through e-meetings on platforms such as Zoom. These new methods allow financial planners to communicate and engage with customers anywhere, anytime as they can now virtually meet up with customers to review financial needs securely and complete insurance purchases.

In the past, agents would have to rush from one location to the next to meet their clients. Now, with the use of technology, agents can simply virtually meet with their customers. With the time saved, many agents are seeing a boost in their productivity as they can meet and service more customers. This saves time and makes the work of the agents more efficient as they can connect with more clients remotely. Also, there is flexibility to manage their time and that extra time allows them to spend more time with friends and family.

 

4. Generate your own leads based on your lifestyle

The financial needs of people change over the course of their lives. Therefore, having agents reach out and help advise any adjustments to your current plan is extremely helpful and well received by customers. Over time, this would allow financial planners to build up their own clientele base through referrals or word of mouth. When clients feel that you genuinely want to help them equip themselves with the proper protection to cater to different milestones, they will naturally encourage their friends and family to do the same.

There’s a lot of misinformation around this that makes it sound even more true. For example, you may hear that organic leads are superior or that a successful agent should not need to buy leads. Organic leads are great, but that doesn’t mean that the leads bought were not organically generated, only that they were not organically generated by you. When the marketing costs associated with generating your own leads are taken into consideration, it is easier to appreciate the leads bought from a reputable insurance technology company.

At some point, a financial planner might have to decide to either invest in blogging, social media, and paying influencers or to just pay someone who’s already doing it to generate leads. Leads generated by the right advertisements work perfectly well too. The quality of these leads does depend on the quality of the advertisements and the process used to convert these users into leads. That being said, if you buy insurance leads from a company with a strong advertising campaign, there should not be a worry that their leads are not “organically generated.”

Being a financial planner and selling insurance is largely a numbers game, and the reach of an agent should be as large as possible for as little money as possible. In the end, it does not matter how the leads are gained as long as you are closing more business than ever. However, some financial advisories even provide leads to their agents on a consistent basis. If the people you work for are doing this for you, it might not be necessary to touch your warm market in order to make it in the industry, so it is pretty important to choose the right agency from the get-go.

 

5. Insurance is not just about sales

Insurance is not only about sales, but it is also a business of taking care of people and protecting them. It is a mission to take on these responsibilities with the right mindset. The needs of the client should always be put first. Many financial planners find a sense of gratification when they help process claims and savings plan maturity proceeds for their clients.

Becoming an insurance agent is not another sales job; it’s an opportunity designed to help people protect who and what matters most to them. Some agents find their profession to be fulfilling and rewarding as they help individuals and families within their community protect their livelihoods and futures. They understand that their business is not just about insurance products – it’s about people, relationships, and making entire communities healthier, safer, and more secure. The financial planning process begins with identifying an opportunity. From there, the financial planner familiarises themselves with the potential client, discovering their needs and determining their long-term goals. This helps them develop the most appropriate policy recommendation.

An insurance career is not just about money, it is about growing together with your clients. For some agents, clients have grown to become friends over the years. They treat each other like family and are invited to family dinners and celebrations. At the end of the day, just the satisfaction of knowing that your client is properly protected makes it all worth it.

If you’re thinking about a career in Insurance, an insurance agent is an excellent option for a part-time job that can span a lifelong career. The requirements are pretty straightforward. First, one must be able to come in by at least 21 years old. Next, you need to have at least:

  • GCE ‘A’ Level certificate with three H2 passes and two H1 passes;
  • Or an International Bacclaureate (IB) diploma;
  • Or a polytechnic diploma; or equivalent academic qualifications.

Finally, you must have sat for and passed modules 5 to 9A from the CMFAS Exam, namely:

  • Rules and Regulations for Financial Advisory Services (M5),
  • Securities Products and Analysis (M6)
  • Collective Investment Schemes (M8)
  • Life Insurance and Investment-Linked Policies (M9)
  • Life Insurance and Investment-Linked Policies II (M9A)

If you’re keen on embarking on a career in insurance and financial planning, here at InsuranceJobs.sg, we have partnered with financial advisories that can provide free training and cover the cost of your exams so feel free to contact us today for a career preptalk!

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