Are Insurance MLMs a Good Business Model?

Short Answer: No, for most people, insurance MLMs (Multi-Level Marketing) are a bad business model. While they technically allow you to sell insurance, the focus is often more on recruiting than actual financial advising. Here’s why:

🚩 1. The Focus is on Recruitment, Not Insurance Sales

Unlike legitimate independent brokerages, MLM-based insurance companies push hard for recruiting because that’s how the upline makes money.

✅ Legitimate insurance advisors = Earn commissions by selling policies to real clients.
❌ Insurance MLMs = Make money by recruiting people who then sell policies under them.

If you’re constantly being told, "You don’t need to be an expert! Just recruit people and build a team!"—you’re in an MLM, not a real advisory business.

💰 2. Commission Splits Are Often Unfair

In an MLM structure, your commissions get divided between you and everyone above you (your "upline").

🔹 Traditional independent brokers = 80%-100% commission on a sale.
🔹 MLM insurance reps = Often start at 30%-50% because your upline takes a cut.

You do the work, but they make money off your efforts.

📉 3. Low-Quality Training & High Turnover

Insurance MLMs often recruit anyone—even if they have zero financial background. The training is often basic sales scripts, rather than deep financial knowledge.

🔹 Real insurance professionals study risk assessment, financial planning, and compliance.
🔹 MLM recruits are told to "sell to friends and family first!"

This leads to high failure rates, and most people quit within a year.

🔄 4. They Push Expensive & Overpriced Policies

Most MLMs only sell one insurance company’s products, which are often overpriced compared to what independent brokers can offer.

🔹 Independent brokers → Compare multiple insurers to find the best deal.
🔹 MLM reps → Forced to push one company’s product, even if it’s not the best for the client.

This leads to bad client outcomes and lost credibility.

⏳ 5. "Passive Income" is a Lie

Many MLMs promise: "If you build a team, you’ll make passive income for life!" But reality is different:

• Your downline has to keep producing for you to make money.
• Most recruits quit within a year, meaning you’re constantly replacing them.
• If your team collapses, your income disappears overnight.

Instead of building a lasting business, you’re on a never-ending recruiting treadmill.

🚀 The Better Alternative: Become an Independent Broker

✅ Higher commissions → No upline taking a cut.
✅ More product options → Can sell from multiple insurers, not just one.
✅ Real career growth → Build a legitimate business, not a recruitment chain.

If you’re serious about selling insurance, skip the MLMs and get contracted directly with real insurance carriers.

Final Verdict: MLM Insurance is a Trap for Most People

❌ Bad commissions – You make less than independent brokers.
❌ Forced recruiting – You earn more by signing people up than selling policies.
❌ Overpriced products – You can’t offer the best rates to clients.
❌ No real career growth – It’s not about financial advising, it’s about building someone else’s pyramid.

If you’re considering insurance as a career, avoid MLMs and go the independent route. 💯