Critical Illness Insurance Agency Break-Even: $804K Monthly Revenue

Fixed costs $12.0K/mo Core overhead

Contribution margin 78% After variable costs

Break-even revenue $15.3K/mo Monthly target

Break-even timing Month 8 Model break-even

Break-even calculator

Test whether monthly revenue can cover direct policy costs and the fixed cost base.

Lean Base Full

Monthly revenue More revenue gives you more room after direct costs. $ Low volume Scaled book Variable expenses These rise with each policy sold, like verification, compliance, and onboarding. $ Light costs Heavy costs

Money available to cover fixed costs $52,100 $81,500 revenue - $29,400 variable expenses

Margin ratio

64%

Covers fixed costs

$5,833 short

Fixed monthly costs This is the monthly cost base your margin must cover. $ Lean setup Full team

Break-even chart Revenue Total costs

Which agency expenses are fixed, and which move with policy sales?

Cost classification

Break-even is only useful if fixed overhead stays separate from per-policy expenses. Here, Month 8 break-even depends on treating rent and core systems as overhead, while verification, medical data, and compliance move with sales volume.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Lease	Fixed	Include $6,500/month in monthly overhead before calculating required commission volume.	Treating rent as optional once sales are below plan.
Cloud CRM Subscription	Fixed	Include $1,200/month as baseline operating overhead for the full planning range.	Allocating the full subscription to each new policy.
Cybersecurity and Data Protection	Fixed	Include $2,500/month in overhead because protected client data is required from Month 1.	Modeling data protection as a discretionary scale-up item.
Lead Verification Services	Variable	Apply 5% of first-year revenue as a direct fulfillment expense tied to sales activity.	Putting verification in fixed overhead and overstating contribution margin.
Medical Data Retrieval Costs	Variable	Apply 4% of revenue in the first year as policy volume and underwriting support rise.	Ignoring retrieval work until claims or underwriting delays appear.
Licensing and Compliance Per Policy	Variable	Apply 3% of first-year revenue as a per-policy selling and compliance load.	Using one annual compliance line and missing per-policy drag.
Buyer Marketing Budget	Semi-variable	Use the $120,000 first-year budget as acquisition spend that can flex with growth targets.	Treating all marketing as fixed even when CAC controls volume.
Licensed Insurance Advisor Payroll	Semi-fixed	Add advisor payroll in capacity blocks as headcount rises from 2.0 FTE in the first year.	Modeling advisors as fully variable commission labor.

How does break-even shift from a lean launch to a staffed base case and full-scale agency?

Scenario table

Lean launch is close to break-even because fixed load is still low. As the agency adds advisors, support, and marketing, revenue rises, but the fixed bar rises too, so the cushion depends on hitting the higher mix.

Planning assumptions only; actual break-even will move with mix, CAC, and compliance costs.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean launch agency	$81.5k	$11.4k	$69.2k	86.0%	$0.9k	Revenue barely clears break-even, so one weak month can flip the result.
Base staffed agency	$492.2k	$51.7k	$155.4k	89.5%	$285.1k	Revenue sits well above break-even, so the cushion is real if sales keep pace.
Full scaled agency	$1.69m	$126.7k	$322.1k	92.5%	$1.24m	Scale gives the widest cushion, but the overhead base is now much larger.

What breaks the break-even plan for this critical illness insurance agency?

Stress test

The plan is thin at launch: a 10% sales dip or a 10% overhead jump wipes out most of the cushion. Watch slow policy placements, buyer CAC above $350, seller CAC above $1,500, and weak renewals.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change.	$80,465	$890 cushion	Small buffer; month 8 break-even leaves little room for delay.
Revenue shortfall	Monthly policy sales revenue falls 10% to $73,350.	$80,465	$6,059 gap	Slower placements turn the launch cushion into a gap fast.
Fixed-cost pressure	Monthly overhead rises 10% to $76,120.	$88,512	$6,030 gap	Fixed staff and systems costs bite early when revenue is still ramping.
Margin pressure	Lead verification and compliance push contribution margin down 1 point to 85%.	$81,412	$75 cushion	A 1-point margin slip almost erases the launch buffer.
Combined pressure	Sales fall 10%, overhead rises 10%, and margin slips 1 point.	$89,553	$13,772 gap	When sales slow and costs rise together, break-even moves out of reach quickly.

Before you sign the lease and spend on leads, is this critical illness insurance agency ready to break even?

Founder checklist

Check the hard gates before you commit to rent, salaries, tech, and paid lead spend. The plan only works if cash, licenses, and policy volume line up by Month 8.

1Cash runway$478K

Hold at least $478K through Month 7, because that is the cash low point before breakeven and the $317K build spend is runway pressure, not margin.

2Launch stackMonth 1

Verify licenses and carrier appointments are active before launch, and have CRM, data protection, telecom, accounting, and $1.8K monthly liability cover live so paid leads do not hit a dead funnel.

3Fixed load$57.9K/mo

Keep fixed commitments near $57.9K a month, including the lease, payroll, CRM, security, accounting, and core admin, until policy volume can absorb that base.

4Unit margin$548/order

Here’s the quick math: with 65% commission revenue and 14% direct costs, each policy leaves about $548 before fixed overhead, so weak margin pushes break-even out fast.

5Advisor load106/mo

Two licensed advisors need to place about 106 policies a month to clear breakeven, so delay support hiring until the book can sustain that pace.

6Buyer flow$120K

Do not spend the full Year 1 buyer budget until CAC stays near $350 and seller-side acquisition stays near $1,500; the budget only buys about 343 buyers, so weak conversion burns cash fast.