Is Goosehead Insurance a pyramid scheme? It’s not a pyramid scheme, but you will be surprised to learn how much money people make from this insurance company.
According to my findings, the insurance giant can’t be called a pyramid scheme. It’s not even a multi-level marketing scheme since it’s not based on continuous recruitment of agents whose income is dependent on how many people they recruit and so forth.
Goosehead Insurance has been active within the United States since 2003 and deals in all sorts of general insurance plans, including automobile insurance, homeowner’s insurance, renter’s insurance, farm insurance, etc.
The company does have several agents all around the country, but their income is fixed, and they earn by selling insurance policies in plans to immediate customers.
This defines the structure of a pyramid scheme or an MLM and thus, Goosehead Insurance is not either of those things.
In this guide, I will discuss Goosehead Insurance’s business model and how much you can earn as one of their insurance agents or any of their other employees. I will also dive into the various pros and cons of working for this insurance company and offer personal insight based on my experience with the company.
My goal is to tell you all you need to know about Goosehead Insurance so that you can make an informed decision about signing up for this income idea.
This article is written by our Editorial Team at Incomepedia with the help of a former Goosehead Insurance consultant.
Goosehead Insurance follows a ranking system that resembles a pyramid. Source: Twitter
Table of Contents
My Personal Experience
I had known about Goosehead Insurance for many years before becoming one of their insurance agents in 2021.
Most people reading this have heard about the brand, either through word of mouth, or through their various insurance products. My first exposure to the brand occurred in the late mid-2010s when I began looking for automobile insurance.
A friend pointed out that Goosehead insurance shops around for the best deals for their customers.
I looked up the Goosehead Insurance YouTube channel and found several videos discussing the work culture and its franchise owners. One of them is Erin Lewis, who talked about how her move to Goosehead allowed her to grow her income exponentially.
She also briefly discussed the various departments, including customer service and analysis. It’s how Goosehead recommends the best insurance deals to their customers.
I visited the main website for the first time and searched for auto insurance options. While browsing, I also noticed the “Work With Us” section at the bottom of the homepage. It included a Careers section as well as a Franchise Owner section which got me interested.
The Franchise Owner section included testimonial videos from other owners, including Erin Lewis. Going through them made me realize what a great opportunity this could be to grow my own income as well as start a career that was based on interactions with customers.
I then visited Goosehead Insurance’s main website and learned more about its business model. The company talked about financial freedom and exponentially increasing your monthly income, but thankfully there was no emphasis on hiring or recruiting more insurance agents under you.
Instead, the company talked about a fully operational infrastructure that would help transfer leads, handle administrative tasks, and service customers. This would help me, the franchise owner, focus on selling insurance policies and continue to prosper.
I was also pleased to see that the company had over 600 franchise owners and more insurance agents all over the US. This wasn’t a pyramid scheme. It was a good old-fashioned American company that would give the customers the best deals at the best prices.
I’d recently lost my job as a sales executive at an E-Commerce company and these benefits sounded extremely enticing. So, I quickly applied to the Goosehead Insurance company as a franchise owner.
My experience began with two weeks of real-world training working with other experienced agents.
The company’s standard training program took me through the ups and downs of the insurance industry. These training sessions included training with the support of the extensive customer service network and administrative system in place to help all insurance agents.
Not only that, but I also learned about the various partnerships that Goosehead Insurance had with the largest insurance agency clients. For example, they had partnerships with AIG, Allrisks, Allied, Adirondack, ASI, Atic, etc.
Following the training, I was immediately set up with my own account so I could begin selling.
I spent many hours every day selling insurance policies to leads that were sent my way. As promised on their website, the company handled all the administrative and service tasks and left me to be an insurance agent.
I sold everything from auto insurance policies to homeowner’s insurance and even flood insurance.
While my salary was dependent on commission, the company’s training process the infrastructure allowed me to learn and sell as much as I possibly could quickly.
The extensive network that Goosehead established included vendors for homeowners insurance, auto insurance, every major mortgage company for home loans, etc. I have a list of most insurance companies with a large presence in the United States at my disposal.
I could make it – I told myself.
What is Goosehead Insurance?
Goosehead Insurance is a well-known insurance company built on the franchise business model. It was founded in 2003 by Robyn Jones and her husband Mark Jones. The latter was an ex-member of Bain & Co., a prestigious management consulting and private equity brand, whose alumni include people like Mitt Romney.
The company is headquartered in Westlake, TX, but has offices in Las Vegas, Dallas, and Chicago as well. The company has partnerships with over 80 insurance providers across various domains within the United States.
The company has thus made a name for itself for providing its customers the best deal on insurance policies for any purpose. These include everything from auto insurance, homeowner’s insurance, and life insurance, to health insurance, motorcycle insurance, and even flood insurance.
The company has over 600 franchisees and has a net worth of over $2.23 Billion.
Goosehead Insurance’s founder Mark E. Jones has been the Chief Executive Officer of the company since its inception. He, along with his wife, Robyn Jones have run the company together as co-founders since 2003.
Robyn Jones has retired since 2018 from all management roles, but she still serves as the Director and Vice Chairman of the Board of Directors.
The husband and wife duo were ensconced in their careers as a Senior Partner at Bain & Co. and a real estate investor, respectively.
However, they decided to take the plunge into the world of the insurance business in 2003. This was partly because they had become frustrated and bored with their old jobs. Robyn Jones was stuck at home with 6 kids and Mark was frustrated because he was always away on business trips.
The two had always been a team since they got married barely out of high school. However, with Mark’s time away from home, Robyn became a stay-at-home mom. She tried flipping houses for a while, but she only sold 3 deals. Her main stopping block was mediocre insurance agents who couldn’t answer the proper questions.
And voila, the idea for Goosehead Insurance was born. While the 2 didn’t take salaries for the first 2 years of the company’s existence, they hired their first customer service rep in 2006.
Goosehead uses customer services representatives to answer questions. Instead of salespeople using confusing terms to convince customers, they only have to concentrate on hard facts and numbers. This takes care of customer inhibition and focuses attention on the policies themselves.
This way of doing business, and shopping around for insurance policies to give customers the best deals has allowed the company to prosper.
By 2019, the company was worth over $1.8 Billion and Forbes did an article on the success story.
You can learn more about Goosehead Insurance’s history in the following Youtube video:
CEO and Staff
Goosehead Insurance’s current CEO is Mark Jones. He has remained CEO since 2003. Though he was not the original founder, that being his wife Robyn, he joined in 2004 after quitting Bain and Co. He has played a vital role in the company’s growth and expansion throughout the country.
Goosehead Insurance’s President and Chief Operating Officer is Mark Miller. He has been with the company for 15 years and has handled its initial public offering as well as its $5 billion privatization transaction.
Goosehead Insurance officially has approximately 2900 employees at its corporate offices. This figure includes all the 600 franchise owners as well as the insurance agents, executives, and analysts that the company employs.
Is Goosehead Insurance a Pyramid Scheme?
So is Goosehead Insurance a pyramid scheme? Well, NOT according to the United States Securities and Exchange Commission.
A pyramid scheme is “an investment fraud in which new participants’ fees are typically used to pay money to existing participants for recruiting new members.”
The SEC goes on to state that pyramid schemes have the following traits:
- No genuine products or services are sold;
- Members are promised high returns in a short period of time
- Members are told the business model allows them to make easy money or passive income
- There is no demonstrable revenue generated from retail sales
- Members must make a purchase to sign-up
- The business has a complex commission structure
- The business model places a high emphasis on recruiting
While certainly some of these apply to Goosehead Insurance, there is no dependence on recruitment to earn commission and there is demonstrable income from retail sales.
Why Goosehead Insurance Isn’t a Pyramid Scheme?
Goosehead Insurance doesn’t count as a pyramid scheme because it doesn’t meet each of the criteria mentioned above. It differs in these areas because:
#1. The Company Sells Insurance, Plain and Simple
Goosehead Insurance has been selling insurance policies by partnering with some of the largest providers of insurance in America for nearly 2 decades. They don’t have a structure that pushes their employees to buy their products and then sell to others.
Instead, their infrastructure facilitates sales and allows their employees to earn simple commissions depending on their sales.
#2. Franchise Owners Can Take Advantage of Generated Leads
Goosehead Insurance generates leads for its employees and franchise owners through a network of customer service representatives and administrative executives. Hence, their employees or insurance agents can focus on selling rather than finding people to sell to.
#3. There is Demonstrable Revenue Generated from Retail Sales.
The company has grown from nothing into a $2.23 billion dollar company in 20 years. This is demonstrable revenue that is generated from selling insurance as well as the pain point solution that Goosehead provides.
Why Do People Think Goosehead Insurance is a Pyramid Scheme?
People believe Goosehead Insurance is a pyramid scheme for numerous reasons. This includes:
#1. You May Have to Cold-Call Strangers or Sell to Family and Friends at the Beginning
Goosehead Insurance offers many ways to get started as an insurance agent. While they do provide fair compensation and commission for sales, they count on you to generate leads yourself in the beginning. In exchange for high performance, they will also share generated leads with you.
#2. The Business Commission Structure
You are paid by Goosehead Insurance according to your sales commissions, and your performance figures have to be high. However, this doesn’t automatically mean that you are expected to hire recruiters like in MLMs or pyramid schemes.
How Much Money Can You Earn from Goosehead Insurance?
Goosehead Insurance doesn’t disclose how much its insurance agents make, but this is a standard practice among insurance companies. However, a quick glance through Glassdoor reveals that the salaries at Goosehead insurance can range anywhere from $50,000 to $166,000 as an insurance agent.
So, how much do they really earn? Well, Glassdoor shows that their insurance agents can make an average of $83,924 a year. This is far above the average pay for an American employee. However, since these salaries are dependent on commissions and performance, they’re not guaranteed.
However, the base pay for any employee at Goosehead is mentioned as $55,971. Additional pay, which includes bonuses and tips, is around $27,953 per year.
How to Earn Income Through Goosehead Insurance?
Goosehead Insurance offers you an opportunity to make money in three ways. These are:
- Earnings from selling insurance as Franchise owners
- Earnings as a Referral Partner
- Earnings as one of several employees of the company not involved in selling insurance (analysts, engineers, auditors)
Method #1. Earnings from selling insurance as Franchise Owners
You’ll make the bulk of your money by selling insurance directly to customers. However, you can be sure that you’ll be helped along with the infrastructure of the company including administrative executives and other insurance agents.
Method #2. Earnings as a Referral Partner
You can also earn referral bonuses if you can bring in people as a referral partner.
Method #3. Earnings as one of several employees of the company not involved in selling insurance (analysts, engineers, auditors)
You can earn money at Goosehead Insurance as any of the several employee positions at the company. These include auditors, full-stack developers, data analysts, and engineers.
These positions offer guaranteed pay and their salaries range from tens of thousands to hundreds of thousands a year.
The average salaries are summarized below:
|Senior Account Executive||$78k-206k|
|Franchise Sales Coordinator||$56k-148k|
|Customer Service Agent||$40k-126k|
While these are wide ranges of salaries, they aren’t abnormal in that they are dependent on performance. Even the President of the company makes a maximum of $433,000 according to Glassdoor. This pay structure makes sense and doesn’t give the impression of a pyramid scheme or an MLM at all.
You can learn more about Goosehead Insurance’s Franchise program in the following Youtube video:
3 Great Advantages of Becoming a Goosehead Insurance Franchise Owner.
Pro #1. You Can Earn Money at a $2 Billion Company
Goosehead Insurance has been built from the ground up in the last 2 decades using legitimate business practices. As a franchise owner, you can earn as much as you bring in selling legitimate insurance through a network of the best insurance companies in the United States.
Pro #2. You Can Take Advantage of the Great Customer Service System
Goosehead Insurance stands out from other insurance providers since it a) handles most of the questions through service reps, and b) answers customer questions and calls in less than 30 seconds.
That leaves you to simply share the best deals with the customers when they’re done. This makes your job a whole lot easier and you don’t have to waste time chasing down leads all the time.
Pro #3. Getting Started Quickly
You can get started as a Goosehead Insurance franchise owner very easily. All you have to do is fill out a form and an agent from the company will get in touch with you.
Key Disadvantages of Becoming a Goosehead Insurance Member.
Con #1. You’re on Your Own at the Beginning
As mentioned above when you start out with Goosehead Insurance you’ll have to chase down leads. If you sell enough insurance to warrant a performance bonus, then you’ll get more leads sent your way.
This puts someone without sales experience at a disadvantage.
Major Goosehead Insurance Controversy.
Goosehead Insurance has had a mostly clean record since its inception. However, in the recent past there have been certain incidents that have shone a less than favorable light on the company:
Goosehead Insurance Employee Fired After Participating in January 6 Capitol Riots
The January 6 Capitol Riots shook the United States. Among those involved was one Paul Davis, who just happened to be Associate General Counsel for Goosehead.
Paul Davis broadcast his involvement during the January 6 riots on his Instagram feed. Hence, it was well known that he was at the riots and involved in the vandalism and intimidation of police and various members of Congress.
His Instagram story mentioned that he had been tear gassed at the Capitol. As soon as this was revealed to the management at Goosehead, they terminated his employment.
They announced this on their Twitter account.
An internal email from the company also shed light on the firing with CEO Mark Jones saying:
“While we support our employees’ right to vote and express themselves politically, we do not condone violent or illegal acts. This one former employee’s actions are not reflective of our company culture or values, and we are disappointed with his behavior…”
Jones also identified himself as a political conservative and Canadian immigrant in the email. He says that he prefers a more conservative government than the one elected, but he recognizes the majority’s vote.
Goosehead Insurance Sued for Improper Termination of Franchise Ownership Contract
In December of 2021, Goosehead Insurance was sued by Williams Insurance & Consulting Inc. The suit was filed due to the latter’s claim that its franchise agreement was terminated unlawfully.
The suit was originally filed in the Oakland County Circuit Court, but Goosehead removed it to the Eastern District of Michigan. Then Goosehead moved to dismiss.
Ultimately, the case was won by Goosehead due to provisions in their franchise agreement that rendered null and void any “arbitration or litigation be conducted outside [of Michigan].”
In summary, Goosehead Insurance does provide a good income source for people looking for flexible hours and exponential growth in a new sector.
The insurer’s operating model allows Goosehead Insurance agents to focus on selling to high-quality leads via a network of insurance companies.
Who Would Goosehead Insurance Be a Good Fit For?
I think Goosehead Insurance would help those looking to start a career in insurance. It’s one of the most innovative companies working in insurance today and is partnered with hundreds of insurance providers across all sectors.
This is a great place to start for people who are interested in increasing their income but also learning the lay of the land in the insurance business. The initial investment of time and training, while not guaranteed to pay off with high returns, is at least not a pyramid scheme.
You are paid according to the commission, plain and simple. You aren’t pushed to recruit more and more people to earn higher commissions. Also, you are afforded bonuses and additional pay if you are a high performer.
That being said, there are reports on Glassdoor that the company’s work culture can be very demanding and that it is a grind. Hence, you better be prepared to work hard and for more hours than a 9 to 5.
Frequently Asked Questions
How Many Goosehead Insurance Locations Are There?
Goosehead Insurance currently has 9 corporate offices as well as 1400 operated and contracted franchises. The company represents over 140 insurance companies and divisions.
How Does Goosehead Make Money?
Goosehead makes money by taking 20% of the sales commissions from its employee’s sales. For renewals, however, Goosehead gets 50% of the commissions. Hence, new sales are the bread and butter of the company’s employees while repeated business is the bread and butter for the company.
- Goosehead Insurance History: Goosehead Insurance About Page
- Goosehead Insurance Company Profile: Forbes Profile on Goosehead Insurance
- Goosehead Insurance is not an MLM: Goosehead Insurance Review
- Goosehead Insurance Net Worth: Goosehead Insurance Portfolio Evaluation
- Goosehead Insurance Employees: Goosehead Insurance Global LinkedIn
- Securities and Exchanges Commission Pyramid Scheme Definition: Pyramid Schemes
- Goosehead Fires Employee: Goosehead Fires Associate General Counsel
- Goosehead Sued: Goosehead Case for Improper Termination