Insurance in India is sold both through bank employees (bancassurance channel) and independent agents (IRDAI-licensed advisors). While both can distribute policies from companies like HDFC Life, LIC, and SBI Life, their commission structures are very different.
In 2025, independent agents continue to enjoy higher commissions and renewals, while bank employees often get fixed salaries with performance incentives. Let’s compare the two.
Bank Employees (Bancassurance Channel)
- Income Type: Salary + incentives.
- Commission Rights: Bank employees do not earn IRDAI agent commissions directly. Instead, banks get a bulk payout from insurers.
- Incentives: Employees may earn quarterly/annual bonuses linked to policy targets.
- Stability: Fixed salary ensures security, but income growth is capped.
Example: An SBI bank RM sells ₹50 lakh premium. Bank gets commission (say 5–10%), but the employee only receives a fixed bonus, not the actual commission percentage.
Independent Agents
- Income Type: Direct IRDAI-regulated commissions.
- Commission Slabs (2025):
- Term: 30–35%
- Savings/Endowment: 30–40%
- ULIPs: 2–7%
- Renewals: 5–7.5%
- Growth Potential: Unlimited — agents can also upgrade to General Agency (GA) and earn overrides from team business.
- Independence: Agents own their client relationships.
Example: An independent agent selling ₹50 lakh premium across term/savings can directly earn ₹12–15 lakh+ in commissions + renewals.
Key Differences: Bank Employees vs Independent Agents
| Factor | Bank | Agent |
|---|---|---|
| Income Model | Salary + Incentives | Direct Commission |
| 1st-Year Comm | ❌ (Bank keeps) | ✅ 25–40% |
| Renewal Income | ❌ None | ✅ 5–7.5%/yr |
| Client Ownership | Bank owns client | Agent owns client |
| Growth | Limited | Unlimited (GA, MDRT) |
Which Is Better in 2025?
- Bank Employees: Safer, steady salary + small bonuses. Great for stability but no commission wealth.
- Independent Agents: Higher commission slabs, renewal income, and freedom to build GA. Best for entrepreneurial agents.
In terms of pure income potential, independent agents clearly earn more than bank employees.
Conclusion
While bank employees selling insurance benefit from steady paychecks, they don’t enjoy commission income. Independent agents, on the other hand, can earn ₹50,000 to ₹2 lakh+/month with renewals and GA overrides.
In 2025, for anyone serious about long-term financial growth, the independent agent path wins over bancassurance.
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