Life Insurance

Frequently Asked Questions (FAQ)

• Do I need a licence to sell life insurance in Canada?

  Yes. Each province and territory has its own insurance licenses, captured under the Life License Qualification Program (LLQP) courses and exams. Please note that Quebec has its own LLQP licence.

• What is the LLQP?

  The Life License Qualification Program (LLQP) is Canada’s nation-wide life insurance licensing program — including courses and an exam — and must be completed by anyone looking to work in the life insurance field. You can find out more about the LLQP under ‘Licensing’.

• How do I become a life insurance agent in Canada?

  Those who wish to work in life insurance typically must hold a high school diploma. Once they have met the basic requirements — which also include being over the age of 18, and having a legal Canadian residency status — prospective life insurance agents must complete the LLQP course and exam.

• How much do life insurance workers make in Canada?

  Earnings can vary depending on a life insurance professional’s level of experience, the pay structure of their employer, and their location. According to Talent.com, Glassdoor, Indeed and Canada’s Job Bank, average salaries for insurance professionals are around $60,000 per year, but take home earnings including commission and profit-sharing can be upwards of $125,000 per year, with more experienced agents and brokers earning well-above that.

  According to Insurance Business Magazine, life insurance is one of the highest-paying insurance fields in Canada.

• What is the commission for life insurance?

  Life insurance professionals can earn money through a base salary, through profit-sharing with the agency they work with, or most commonly through a commission, where a percentage of the cost of the purchased policy goes towards the insurance agent.

  The commission structure for life insurance agents generally includes a higher initial commission followed by lower renewal commissions in subsequent years. Agents receive a significant percentage of the policy’s first-year premium (also known as first year commission or FYC). For term life insurance, this can range from 30 percent to 70 percent, while for whole life insurance, it often falls between 90 percent and 105 percent. After the first year, agents earn smaller commissions on the policy’s annual premiums, typically ranging from 2 percent to 5 percent. These renewal commissions provide ongoing income as long as the policy remains active.

  According to Insurance Business Magazine, independent insurance agents tend to have higher commission rates, whereas insurance agents working within a company typically earn less (anywhere from 5 percent to 10 percent).