Insurance Leads Cost

Insurance Leads Cost – Are Leads for Insurance Worth It?

We surveyed 20 unique insurance leads providers across various types of insurance leads and insurance products. The results show that the average insurance lead cost is $28.81 per lead. The truth is that insurance leads are not necessary to grow your insurance business. However, they are a valid way to acquire leads and new insurance sales at cost. In the short term insurance leads may be worth it for your insurance business, depending on your chosen provider. In the long term, once you have an established insurance business, the costs of buying insurance leads may not be worth the return on investment. 

 

 

Insurance agencies have the lowest profit margins of any business industry, from 2% to 3% on average. Insurance companies may even lose money to acquire a new client in the first year or two years of the policy. However, the average customer stays with the same insurance provider for five years before changing, so you make money back over time. The issue with purchasing insurance leads over the long term is that the cost of insurance leads only goes up over time. Insurance leads go up in cost over time due to rising marketing and advertising costs and increasing competition within the insurance industry. This article explains exactly how to evaluate if buying leads delivers a return on investment (ROI) for you, no matter the situation. We cover the average pricing for leads depending on the financial advisor services you provide.

 

 

How Much Does Buying Insurance Leads Cost on a Monthly Basis?

Successful insurance agents close about 8% to 12% of leads they purchase on average. On the low end, you need to purchase 12 leads at a closing rate of 8% to acquire one new client. Your total costs in leads to acquire one new client on the low end is $345.72 based on the average cost per lead of $28.81. On the high end, you must purchase eight leads at a closing rate of 12% to acquire one new client. Your total costs in leads to acquire one new client on the high end is $230.48 based on the average cost per lead of $28.81. 

According to the Insurance Information Institute, personal lines of insurance make up 49.8% of the net premiums written in the insurance industry. Commercial lines of insurance make up 50.2% of the net premiums written in the insurance industry. The most common types of personal insurance sold are life, health, homeowners, and auto insurance. The most common types of commercial insurance sold are general liability, commercial property, professional liability, and workers’ compensation. Let’s break this down based on the types of insurance sold and the average commissions made from selling each insurance:

Personal Lines of Insurance

Personal Lines of Insurance

How Much are Auto Insurance Leads

How Much are Auto Insurance Leads?

Based on our survey data, the average cost per lead of auto insurance leads is $16.33 per lead. The average cost of auto insurance is $1,771 per year for full coverage or $148 per month. On average auto insurance agents make 5% to 15% commission on the premiums they sell. On the low end, this commission is $7.40, and on the high end, it is $22.20 based on the average monthly car insurance premium of $148 per month. 

 

To acquire one car insurance client on the low end of the close rate (8%), you would need to buy 12 insurance internet leads at a fee of $195.96 in total. On the low end, it would take you approximately 26.5 months to break even on purchasing 12 leads, and every month afterward is profit. On the high end of the close rate (12%) and commission (15%), you would need to purchase eight internet leads worth $130.64 in total. You would have to wait 5.9 months before breaking even on your leads cost expenses. 

 

The average person stays with the same auto insurance company for five years before switching. The average car insurance agent makes $46,796 a year. To make $46,796 as a car insurance agent purchasing leads you would need to purchase 2,265 leads and expend total fees of $36,987.45 on the low end.

How Much Do Life Insurance Leads Cost

How Much Do Life Insurance Leads Cost?

Based on our survey data, the average rates for life insurance leads is $25.44 per lead. According to NerdWallet, the average cost of life insurance is $26 a month or $312 a year. The typical life insurance agent receives 30% to 90% (an average of 60%) of the policy for the first year, and every year after that, 3% to 10% (an average of 6.5%) of the annual policy. The average commission for the first year of life insurance is $15.60 per month or $187.20; every year after that, it is $1.69 a month or $20.28 a year. 

 

To acquire one life insurance client on the low end of the close rate (8%), you would need to buy 12 leads for $305.28 in total. It would take approximately 6.8 years to break even on acquiring one new customer on the low end. On the high end of the close rate (12%), you would need to purchase eight leads worth $203.52 in total. You would have to wait 21.6 months before breaking even on the costly leads. 

Most people keep life insurance for 20 to 30 years on average (an average of 25 years). Average life insurance agents make $65,059 a year before taxes. To make $65,059 a year before taxes as a life insurance agent purchasing leads, you must purchase 176.26 leads for $4,484.05 on the low end and wait 16.8 years. To make $65,059 a year before taxes on the high-end purchasing leads, you must purchase 138.27 leads for $3,517.77 and wait 23.2 years.

How Much are Homeowners Insurance Leads
How Much are Homeowners Insurance Leads?
Based on our survey data, the average rates for homeowners insurance leads is $75 per lead. According to ValuePenguin, the average monthly premium of homeowners insurance is $140 per month or $1,680 per year. The average homeowners’ insurance agents commission is 10% which is $14 per month or $168 a year per policy. To acquire one homeowner’s insurance client on the low end of the close rate (8%), you would need to buy 12 leads for $900 in total. On the low end, it would you approximately 5.4 years to break even on acquiring one new customer from purchasing leads. On the high end of the close rate (12%), you would need to purchase eight leads worth $600 in total. You would have to wait 3.57 years before breaking even on purchasing the leads. 

 

The average homeowner stays with the same home insurance company for three years before switching. Based on the data above, you would lose $400 per policy on the low-end purchasing leads, and on the high end, you would lose $96 per policy by purchasing leads. 

How Much are Health Insurance Leads
How Much are Health Insurance Leads?
Based on our survey data, the average rates for health insurance leads is $16.91 per lead. According to ValuePenguin, the average monthly premium of health insurance is $541 per month or $6,492 per year. The average health insurance agents commission is 70% of the first-year policy and 1.5% of renewals. The first-year commission per client for health insurance agents is $378.70 a month or $4,544.40 per client a year. The renewal years commissions per client for health insurance agents is $97.38 per client a year. 

 

To acquire one health insurance client on the low end of the close rate (8%), you would need to buy 12 leads for $202.92 in total. On the low-end health, insurance agents are making a positive return on investment (ROI) of $175.78 per client from purchasing leads. To acquire one health insurance client on the high end of the close rate (12%), you would need to buy eight leads for $135.28 in total. On the high end, health insurance agents make a positive return on investment (ROI) of $243.42 per client from purchasing leads. 

Commercial Lines of Insurance

Commercial Lines of Insurance

How Much are General Liability Leads?
Unfortunately, we were unable to obtain general liability leads prices survey data. However, check back in the future because we will update this article when we obtain the data. 
How Much are Commercial Property Leads?
Unfortunately, we were unable to obtain general liability leads prices survey data. However, check back in the future because we will update this article when we obtain the data.
How Much are Professional Liability Leads?
Unfortunately, we were unable to obtain general liability leads prices survey data. However, check back in the future because we will update this article when we obtain the data.
How Much are Workers’ Compensation Leads?
Our research shows that the average cost of workers’ compensation insurance leads is $162.50 per lead. According to AdvisorSmith, the average monthly premium of workers’ compensation insurance is $78 per month per employee or $936 per employee a year. The average workers’ compensation insurance agents commission is 10% per premium. The average number of employees in a small business is 10, which is $9,360 per year for all ten employees to have workers’ compensation insurance. The average commission for workers’ compensation agents is $936 per client

 

To acquire one workers’ compensation client on the low end of the close rate (8%) you would need to buy 12 leads for $1,950 total. Compensation agents would need to wait 25 months for low-end workers to break even. To acquire one workers’ compensation insurance client on the high end of the close rate (12%), you would need to buy eight leads for $1,300 in total. For high-end workers, compensation agents would need to wait 16.6 months to break even. 

Where to Buy Life Insurance Leads

Where to Buy Life Insurance Leads?

The best place to buy life insurance leads is a lead provider that provides exclusive inbound leads generated from organic marketing. These leads have the highest conversion rates but are expensive to purchase because they are more challenging to acquire.

What Makes an Insurance Lead Worth Buying?

Ultimately, it comes down to the return on investment of the lead based on the total customer lifetime value revenue you generate per client. Knowing your numbers lets you determine if purchasing leads is worth it for your business. 

Is Insurance Lead Generation Better Than Purchasing Insurance Leads?

The best way to generate new sales is by using insurance lead generation. The best lead generation tactic which delivers the best ROI is Insurance SEO or Search Engine Optimization. If you were to invest $42,500 in SEO content over 12 months and generate 2,400 clicks a month at an average conversion rate of 5.10%, you would spend a measly $0.05 per click compared to $20.12 per click from PPC content. Even more, since you earned those 2,400 clicks a month, you could expect them to continue for your agency even if you stop investing in SEO content. This means your cost per click and cost per lead will go down to free within the next couple of months to a year. At an average conversion of 5.10%, you can generate 122 insurance leads each month from 2,400 clicks, and over a year, this comes out to 1,464 leads. 

 

Suppose you invest $42,500 a year in SEO. Over the next year, you generate 1,464 leads without investing another dime in SEO. In that case, your cost per lead is $29 compared to $402.40 per lead from PPC. The year after, your cost per lead is $14.51 per lead, and in the third year, your cost per lead is only $9.67. This is because your business’s revenue and traffic generated from SEO continue even after you stop investing in SEO. Unlike PPC, where the moment you stop spending money on PPC is the moment all revenue and traffic for your website grinds to a halt. 

organic seo advantage line graph
Since SEO is an organic marketing channel, the average close rate is much higher than purchasing leads. For SEO, you could expect an average closing rate of 25%. This means you could expect to acquire 366 new clients from 1,464 leads which put your customer acquisition costs at $116 per client compared to $1,609.60 to acquire a new client from PPC.

 

Average Customer Acquisitions Cost of SEO for Auto Insurance Leads
The average customer acquisition costs for a new auto insurance client is $116 per client with SEO versus an average cost of $195.96 per client from purchasing leads on the low end and $130.64 on the high end. Keep in mind that the average customer acquisition costs after two years of SEO go down to only $58 per client and after the third year only $38.70.
Average Customer Acquisitions Cost of SEO for Life Insurance Leads
The average customer acquisition costs for a new life insurance client is $116 per client with SEO versus an average cost of $305.28 per client from purchasing leads on the low end and $203.52 on the high end. Keep in mind that the average customer acquisition costs after two years of SEO go down to only $58 per client and after the third year only $38.70. 
Average Customer Acquisitions Cost of SEO for Homeowners Insurance Leads
The average customer acquisition costs for a new homeowners insurance client is $116 per client with SEO versus an average cost of $900 per client from purchasing leads on the low end and $600 on the high end. Keep in mind that the average customer acquisition costs after two years of SEO go down to only $58 per client and, after the third year, only $38.70.
Average Customer Acquisitions Cost of SEO for Health Insurance Leads
The average customer acquisition costs for a new health insurance client is $116 per client with SEO versus an average cost of $202.90 per client from purchasing leads on the low end and $135.28 per client on the high end. Keep in mind that the average customer acquisition costs after two years of SEO go down to only $58 per client and, after the third year, only $38.70.
Average Customer Acquisitions Cost of SEO for Workers Compensation Leads
The average customer acquisition costs for a new workers’ compensation client is $116 per client with SEO versus an average cost of $1,950 per client from purchasing leads on the low end and $1,300 per client on the high end. Keep in mind that the average customer acquisition costs after two years of SEO go down to only $58 per client and, after the third year, only $38.70.