How Do Life Insurance Agents Make Money? 
Life insurance agents make money through commissions on the products they sell . If Term insurance , these commissions are usually paid for the first year , then sometimes there is a very small residual commission earned annually after that . If the policy is dropped in the first 6-12 months , commissions are often withdrawn back from the agent . Permanent policies usually have a small recurring commission annually , which is how many life insurance agents are able to supplement Social Security income during retirement . 