How to calculate insurance lead ROI

What is the formula for insurance lead ROI?

Insurance lead ROI is the commission you keep from a batch of leads or calls, minus the total cost of producing it, divided by that total cost. Written out: ROI = (commission kept minus total acquisition cost) / total acquisition cost, times 100. Commission kept means first-year commission on issued policies after chargebacks, not the advance that reaches your account at issue. Total acquisition cost means what you paid for the leads or calls after any credits, plus agent pay and the other costs of working them. A result of 0% means the batch paid for itself and nothing more; a negative result means it lost money. The same inputs give you three more numbers worth tracking: cost per sale, the break-even close rate, and the most you can afford to pay per lead or call. Work out all of them for each source and campaign separately, because a blended average can hide the one that is losing money.

Which inputs do you need?

You need seven inputs, all taken from the same batch of leads or calls and the same follow-up window. Mixing periods is the most common way to get a flattering number that is wrong.

Price per lead or billed call

What you were actually charged, after approved credits. For calls billed on connected time, count billed calls, not every call that rang.

Leads or billed calls

The count in the batch you are measuring.

Policies issued

Issued policies only. Declined and withdrawn applications earn nothing.

Average annual premium

Monthly premium times 12, averaged across the issued policies.

Commission rate

The NAIC glossary describes commission as a percentage of premium paid to agents by insurance companies. Use the first-year rate in your own contract.

Persistency

The share of issued policies still in force when your chargeback window closes.

Other acquisition costs

Agent pay for the hours spent on the batch, phone and CRM costs, counted once.

Define a close the same way every time. How to measure close rate explains why the denominator matters, and the real cost of a call shows how to fold in agent time.

Worked example: what is this call source's ROI?

Here is one batch worked through with round, hypothetical numbers. None of them is a benchmark or a quote from any vendor.

1. 01Add up the spend100 billed calls at $45 each cost $4,500.
2. 02Count issued policies12 policies were issued, a 12% close rate on billed calls. Cost per sale is $4,500 / 12 = $375.
3. 03Value one saleThe average premium is $60 a month, or $720 a year. At an assumed 90% first-year commission rate, each sale earns $648.
4. 04Calculate gross ROI12 x $648 = $7,776 in first-year commission. ROI before chargebacks is ($7,776 minus $4,500) / $4,500 = 72.8%.
5. 05Find the break-even close rate$45 / $648 = 6.94%. Below roughly 7 sales per 100 billed calls, this source does not cover its own call cost.

How do chargebacks change ROI?

Chargebacks shrink the commission you keep, so they lower ROI and raise the break-even close rate at the same time. Keep the batch above and assume 3 of the 12 policies lapse inside the chargeback window with their first-year commission fully recovered. Commission kept per sale becomes $648 x 75% = $486.

The same batch goes from a 72.8% return to a small loss once three lapses and agent pay are counted. That is why ROI should use commission kept, and why reducing chargebacks can matter as much as the price you pay. Free look returns belong in the lapse count too, since the premium goes back to the client (South Carolina's insurance department describes a full premium refund in that window).

How much can you afford to pay per call?

Your break-even price per call is the commission you keep per sale times your close rate. In the example, $486 x 12% = $58.32 per billed call covers commission only. Spread $1,500 of agent pay over 100 calls and labor adds $15 per call, so the ceiling for the call itself drops to $43.32. At $45 the source loses a little, which matches the ROI table.

Compare your ceiling with published prices for the same product and connected-time tier. Callmart's retail prices as of November 2, 2026 are $30 for 10 seconds, $40 for 30 seconds, $50 for 60 seconds, $60 for 90 seconds for Final Expense digital calls and $80 for a 120 second Final Expense live transfer, and bulk buyers can request lower wholesale rates. A longer buffer costs more per call because more short calls are excluded from billing, so recalculate your close rate per billed call at each tier instead of reusing one number. The call buffer guide and the retail price list explain the tiers.

Leave one-time credits out of steady-state ROI. Callmart's first deposit bonus ($50 on a first deposit of $250, $150 on a first deposit of $500, $300 on a first deposit of $1,000) is call credit with no cash value, so treat it as a discount on the batch it paid for, not as a lower ongoing price.

Should ROI use first-year commission or lifetime value?

Use first-year commission kept to decide whether to keep buying from a source, and track lifetime value as a separate, longer view. First-year results settle once the chargeback window closes, while renewals depend on years of persistency you have not seen yet. If you add renewals, base them on your own retention history rather than a hoped-for rate, and label which version you are reporting.

The cost per acquisition calculator takes a retained value per customer, so you can enter the first-year figure for one run and a lifetime figure for another and compare the two break-even prices it returns.

What mistakes skew insurance lead ROI?

• Counting advances as income before the chargeback window closes.
• Counting applications instead of issued policies.
• Dividing by every lead delivered in one report and by contacted leads in the next.
• Leaving out agent pay, which turned the example above from profit to loss.
• Blending sources, campaigns or buffer tiers into one average.
• Judging a batch before its sales have had a fair follow-up window.

ROI checklist

• Spend and sales come from the same batch and the same window.
• Lead or call spend is billed charges after credits.
• Sales are issued policies.
• Commission is what you keep after chargebacks.
• Agent pay and other acquisition costs are included once.
• Each source, campaign and tier gets its own calculation.

Common questions