Long-Term Care Insurance Agency Break-Even Analysis: $646K/Month

Fixed costs $15.7K/mo Monthly base load

Contribution margin 70% After variable costs

Break-even revenue $22.4K/mo Revenue needed

Break-even timing Month 7 First positive month

Break-even calculator

Use this calculator to test how monthly revenue, variable expenses, and fixed costs shape break-even for a long-term care insurance agency.

Lean Base Full

Monthly revenue Higher revenue gives you more room to cover fixed overhead each month. $ Early month Mature month Variable expenses These are direct costs that rise as policies and service work increase. $ Low costs High costs

Money available to cover fixed costs $60,317 $160,417 revenue - $100,100 variable expenses

Margin ratio

38%

Covers fixed costs

$15,333 short

Fixed monthly costs This is the monthly overhead your contribution margin has to cover. $ Lean setup Expanded setup

Break-even chart Revenue Total costs

Which expenses are fixed and which move with sales in a long-term care insurance agency?

Cost classification

Break-even is only reliable when each expense follows its real behavior: fixed bills stay flat, variable items rise with revenue, and staffing steps up as capacity grows. Misclassifying lead spend or producer overrides like rent can distort the Month 7 break-even view.

Expense	Cost	Break-Even Treatment	Common Mistake
Office Rent	Fixed	Include $6,500 per month as fixed overhead from Month 1 through Month 60.	Spreading rent by policy count and making it look variable.
Professional Liability Insurance	Fixed	Include $2,000 per month before calculating required contribution margin.	Leaving it out because it does not attach to one sale.
Software Subscriptions & CRM	Fixed	Model $1,500 per month as recurring operating overhead in the planning range.	Treating core software as a one-time setup item.
Insurance Carrier Processing Fees	Variable	Apply 8.0% of revenue in the first year, falling to 6.0% by Year 5.	Using a flat dollar amount instead of a revenue percentage.
Third-Party Underwriting Costs	Variable	Apply 5.0% of revenue in the first year, falling to 3.0% by Year 5.	Forgetting that underwriting load rises with placed business.
Marketing & Lead Generation	Variable	Apply 12.0% of revenue in the first year, then step down to 8.0% by Year 5.	Treating lead spend like fixed rent instead of sales-linked spend.
Annual Marketing Budget	Semi-variable	Plan $120,000 in the first year, rising to $360,000 by Year 5; track CAC from $2,400 to $1,800.	Using one CAC forever and missing funnel efficiency gains.
Salaried Team Expansion	Semi-fixed	Model staffing in steps, from the founder plus one licensed agent in the first year to a larger team later.	Assuming payroll moves smoothly with each new client.

How does break-even shift across lean, base, and full setups for this long-term care insurance agency?

Scenario table

Break-even moves mostly with fixed payroll and marketing, not just revenue. Lean is the lightest path to break-even, base sits just above it, and full only works once placed policy volume can support a much larger monthly cost load.

Planning assumptions only; results depend on placed policy volume and staffing ramp.

Scenario	Monthly Revenue	Variable Costs	Fixed Costs	CM Ratio	Operating Profit	Break-Even Signal
Lean founder-led setup	$72,700	$21,810	$38,700	70%	$12,190	Lower fixed cost gives the widest cushion at the same volume.
Base Year 1 agency model	$72,700	$21,810	$45,200	70%	$5,690	Slight cushion; Month 7 break-even needs volume to hold.
Full Year 3 expanded team	$255,000	$63,750	$98,000	75%	$93,250	Wide cushion, but only after staffing matches policy volume.

What breaks the break-even plan if revenue slips or costs rise?

Stress test

With $72,700 average monthly revenue, $45,200 fixed cash load, and 70% contribution margin, the plan clears break-even by about $8,100. A 15% revenue dip or a 10% cost step-up cuts that cushion fast, and both together push the model into a gap.

Stress Case	Changed Assumption	Break-Even Revenue	Revenue Gap	Risk Signal
Current plan	No change; average monthly revenue stays about $72,700 and variable expenses stay at 30%.	$64,600	$8,100 cushion	The plan clears break-even, but the cushion is modest.
Revenue shortfall	Monthly revenue falls 15% to about $61,800.	$64,600	$2,800 gap	CAC above $2,400 or delayed placements can flip this negative.
Fixed-cost increase	Fixed cash load rises 10% to about $49,700.	$71,100	$1,600 cushion	Hiring before pipeline proof eats the headroom fast.
Margin pressure	Variable expenses rise from 30% to 35%, cutting contribution margin to 65%.	$69,600	$3,100 cushion	Higher carrier and underwriting costs shrink the spread.
Combined pressure	Revenue falls 15%, fixed costs rise 10%, and variable expenses rise to 35%.	$76,500	$14,700 gap	This is the case that breaks the plan before steady commissions build.

What should you verify before signing the lease and scaling paid leads?

Founder checklist

Don’t sign the lease or turn up paid spend until licensing, carrier access, CAC, and cash all hold in the model. Break-even only works if you can quote cleanly, keep variable load near 30%, and carry the $663,000 cash trough in Month 6.

1Launch stackGo-live

Verify producer licensing, carrier appointments, CRM, and quoting tools before paid traffic starts, or your first leads will leak.

2CAC proof$2,400

Prove lead sources can hold the Year 1 CAC before you scale spend beyond the $120,000 marketing budget.

3Fixed load$15.7K/mo

Keep the monthly fixed base inside the listed rent, insurance, software, legal, licensing, supplies, training, and internet costs.

4Variable load30%

Track carrier processing, underwriting, marketing, and agent overrides so total variable costs stay near the 30% load plan.

5Cash reserve$663K

Hold enough cash to survive the Month 6 trough and still reach the Month 7 break-even point.

6Staffing ramp$64.6K/mo

Stay with founder plus one licensed agent until revenue trends toward $64,600, and delay the $6,500 rent if home-office work can carry demand.