A Beginner’s Guide to Becoming a Life Insurance Agent

Written by Matthew King, time it takes to read this article is  minute(s).

With annual revenue of more than 1.2 trillion dollars, the United States insurance industry is the largest in the world. And it’s only going to grow.

Because the insurance market isn’t fully saturated, there’s room for people like you to enter the field.

If you’re looking for a career with endless growth potential that is both financially and personally rewarding, you should consider becoming an insurance agent. It’s easy to get started when you know what steps to take.

Are you thinking of starting a career as a life insurance agent?

Selling life insurance can be a lucrative career choice. Estimates state that the average insurance agent’s salary is $106,428 per year. Broken into hourly rates, this equates to an average of $51 per hour.

What’s more, if you can crack the code of being a highly successful life insurance sales agent, you can earn up to $142,000 per year and build a sizable source of passive income.

However, insurance sales is a competitive arena. The BLS estimates that there were 409,950 life insurance agents in the United States in 2020.

That said, it is possible to create a successful insurance agent career for yourself.

The key is understanding what it takes and how to start.

Keep reading for our ultimate guide to jumpstarting your career as an insurance agent.

What Does an Insurance Agent Do?

If you’re interested in becoming an insurance agent but aren’t quite sure what the job entails, don’t worry. To put it simply, insurance agents sell insurance policies to customers on behalf of an insurance carrier or brokerage.

The insurance industry is huge, and there are a number of different types of insurance you can sell that each come with its own insurance agent duties, including:

  • Home insurance
  • Car insurance
  • Life insurance
  • Health insurance
  • Final expense insurance

The most lucrative types of insurance are health and long-term care insurance. If you want to boost your income, even more, consider selling financial planning services in addition to insurance policies.

The Traits You Need for Becoming a Successful Life Insurance Agent

Before we get into the steps involved in becoming a life insurance agent, let’s first look at some of the traits you need to become successful.

Having the right personality, approach, skills, and attitude are essential for any sales job. However, it’s even more critical if you’re thinking of starting a life insurance career.

Insurance Agents vs Insurance Brokers

While you may hear the terms insurance agent and insurance broker used interchangeably, the truth is that they aren’t the same. The difference boils down to whether or not the insurance salesperson is appointed by an insurance company.

Insurance agents are appointed by insurers, and they sell policies on behalf of these insurers.

On the other hand, insurance brokers are not appointed by insurers. They submit applications for insurance policies on behalf of buyers. Insurers then respond with quotes for policies that are sold to buyers.

Captive agents work for only a single insurer. Independent agents represent a number of insurers. 

How do you know which type of insurance seller is right for you? It depends on your level of ambition and how you want to start your career.

In general, insurance brokers need to have a more in-depth understanding of a number of different insurance products. While there is a greater learning curve, brokers can charge more in fees and premiums.

Whether you choose to become an agent or a broker, you’ll need to learn a lot about insurance policies. If you’re willing to go the extra mile to learn even more about insurance products and services, becoming a broker might be right for you. 

Life as an Insurance Agent

When considering a career change, it’s important to take some time to picture what your new life would look like and make sure the job is a good fit.

Life as an insurance agent is no walk in the park. One of the job’s biggest selling points is also one of its biggest challenges – flexibility.

While you don’t necessarily have to work a set schedule or report to an office every day, you’ll probably spend even more time working, especially when you’re first starting out. 

Life Insurance Can Be a Tough Sell

Even though it’s an important product, life insurance can be a tough sell. Consumers are faced with a plethora of ways to spend their money, and the long-term benefits of life insurance can pale against the short-term attraction of tempting purchases.

For instance, compare selling life insurance to selling cars. Owning a new car has a host of emotional ramifications. Being able to buy and drive a new car not only feels great, but it’s also a status symbol.

Life insurance, on the other hand, is totally different. Although it doesn’t bring immediate pleasure, it can win your client’s peace of mind and security. 

What Does it Take to Succeed?

Before taking the leap into the world of insurance sales, you should take into consideration whether you have what it takes to succeed.

The insurance agent career is unique in that it doesn’t require any specific degrees or educational requirements. Anyone who is willing to learn how to sell insurance can get into this field. But it’s a career that requires a lot of drive and some specific soft skills.

Skills that aren’t easily qualified on paper but will serve you well in this field include:

  • Verbal and nonverbal communication skills
  • The ability to build rapport
  • Emotional intelligence
  • High amounts of energy
  • The ability to handle rejection

While you can become very successful as an insurance agent, that success isn’t going to happen overnight. You have to be ready to hear the word “no” more often than not, especially when you are just starting out.

But if you’re willing to continue to refine your skills and build your portfolio, your hard work will pay off.

Becoming your own boss is totally worth the work, but it does take some getting used to. When you’re working from home, it can be challenging to separate your personal and professional life. Finding that perfect work-life balance may take some trial and error.

Finally, be prepared for money to be tight when you first start out. It takes time to build up a client base.

Getting Into Your Clients’ Shoes

Life insurance isn’t something that’s going to impress, and taking out a policy doesn’t have the same satisfaction as pulling up somewhere in a smart new vehicle or going on a luxury holiday.

If you want to be successful, you need to know how to sell life insurance to your clients in a way that makes them feel like it’s a must-have. To do so, you have to be adept at tailoring your pitches to each client and their unique pain points.

You need to step into their shoes and figure out what selling points will make your product attractive enough for them to feel they can’t do without it. For this, you will need to be empathetic, a good listener, and a good judge of character. 

Not Giving Up

Any type of sales work is filled with no’s. This is especially true for a life insurance agent. One of the most important insurance agent skills to have is persistence and the tenacity not to give up to carve a successful career.

There will always be nos and clients that don’t buy, even when you are a successful and prosperous life insurance agent. Mentally prepare yourself for this, and remember that it is a numbers game. The more nos you get, the closer you might be to the next sale.

Cultivating an Always-on Mindset

Because competition is fierce in insurance sales, you need to cultivate an always-on mind. As a life insurance agent, you may often have to meet with clients after hours or on weekends.

You will also need to always be actively thinking about life insurance and looking out for potential new leads.

All of this requires a lot of energy. However, if you are a high-energy personality, this can help you sustain the drive needed for continued sales.

What Training You Need

To start selling and gain life insurance experience, the first thing you’ll need to do is get licensed.

You don’t need to go to college to become qualified as a life insurance agent. Instead, you’ll need to complete a required amount of coursework, after which you can apply for your license exam.

Different states have different requirements for life insurance licenses. Therefore, make sure to check what your specific state’s requirements are before you pick a course.

While this is all the training you must have to become licensed; it’s not all you need to build a life insurance agent career. The required courses for becoming a life insurance agent teach you the basics of how life insurance works and your role as the agent.

However, they don’t hone your insurance agent skills, teach you how to deal with clients, generate leads, promote yourself, gain referrals, etc.

These areas are all crucial to having a successful life insurance experience. Therefore, it’s also a smart move to invest in further training.

Here at IS101, we are committed to giving every life insurance agent who signs up with us access to the best, most streamlined, and impactful training in the industry.

Besides sharing advanced sales and prospecting techniques that attract your ideal clients, we also teach advanced case design and underwriting and offer full support and mentorship.

How Much Does an Insurance Agent Make?

One of the most important things to know about becoming an insurance agent is how much you can expect to make.

According to Indeed, insurance agents make an average of $56,854 per year. This estimate was derived from data including current and past job advertisements, users, and employees that shared insurance agent salaries.

Of course, pay will be influenced by a number of factors, including location, experience, number of hours worked, etc.

Becoming an insurance agent requires some initial investment. You’ll have to pay for the cost of training. This is usually around $300-$500. 

Becoming an Insurance Agent

The steps you must take to become an insurance agent will differ depending on the state you live in. The following is our general guide to becoming an insurance agent in the United States.

Completing Your Training

Even the most basic insurance agent requirements usually include a training course. This will most likely be your first step. This course may take from a few days to a week to complete.

During this training, you will learn about the different types of insurance, applicable state laws, and insurance industry ethics. You should take notes because you will be tested on this material in order to obtain your state license.

If you are hired by an insurance agency, you’ll also receive on-the-job training. This training will include how to sell insurance and insurance agent duties specific to your new role.

Getting Your State License

Most states require a license to sell insurance. The exam you will need to pass depends on where you live and which type of insurance you want to sell.

Be sure to stay up to date on the latest industry trends, as you’ll have to periodically renew your license over the course of your career.

Passing a Background Check

Most states also require you to pass a background check. You may have to submit documents to your state during this step.

Applying for Jobs

Once you obtain your license, you can start applying for insurance agent jobs. It can take from a few months to a year to start working in the industry, depending on how quickly you get hired.

Getting your license and completing your training is a relatively quick process. Finding the right job can take much longer.

Applying for a job with an insurance agency is the same process as with any other industry. If you don’t want to work for someone else, you can jumpstart your career by becoming an independent insurance agent. 

If you don’t hear back from any of the companies you applied to, be sure to make a follow-up call. We’ll let you in on an industry secret. Some insurance companies don’t interview candidates who don’t call them to follow up on their applications.

If you’re lucky enough to receive multiple offers, choose the best fit who also has the best reputation within the community. Check out insurance rating platforms like Standard & Poor’s, Moody’s, and A.M. Best to learn more about potential employers.

Understanding Contracts and Releases

If you are taking the route of an independent agent, the next step is to get contracts with an upline to sell products. When doing this, it’s essential that you also understand how releases work. 

How Contracts With Carriers Work

Most insurance carriers do not work directly with independent agents. Instead, they outsource the job of working with agents to IMOs (Insurance Marketing Organizations).

IMOs then have several General Agents (GAs) that act as recruiters. These GAs then work with you and other independent agents, issuing contracts to sell specific products.

When you make a sale, your IMO and GA will typically both receive a percentage commission. For instance, if you make a sale with a 100% first-year commission, your GA might earn 120% (minus your portion), and the IMO may get 140% (minus the GA’s and your commission).

Because of this, some IMOs and GAs are reluctant to release their agents from being contracted. After all, with every sale you make, they earn a percentage, and they have invested the time to recruit and contract you. 

However, you must make sure you will be released from a contract if you so wish. 

The Importance of Release Policies

If you wish to discontinue a contract with an IMO, they will need to release you from it in writing through a form or letter. 

If they refuse to do this, the only way to get out of the contract is to cease writing business with the carrier for six months. At this point, the carrier will automatically cancel your contract when requesting a new contract with a new upline.

If you have a few main carriers and wish to cancel your contracts with your current IMO and switch to a different up-line, this means you’ll have a six-month dry period where you can’t make sales. Alternatively, it will force you into a different market for that time.

Therefore, when signing with IMOs, make sure they show you their release policy. If they do not have one, you will do well to move on to a different IMO.

Deciding Whether or Not to Be an Independent Agent

Once you are licensed and have the training you need, you will also need to decide whether or not you want to be an independent agent.

If you want to look for a job with an insurance carrier or broker, you will need to start job hunting and putting a resume together. Take note, however, that most insurance agents don’t earn a salary and instead work solely on commissions. In rare cases, a broker or carrier might offer you a small retainer.

In many people’s life insurance experience, they find they can earn more working as an independent agent. Along with higher earnings, you’ll also be able to enjoy more freedom if you work as an independent life insurance agent.

The flexibility and freedom of an insurance agent career attract most people to it in the first place. As an independent agent, you can work the hours you choose, devote as much or as little time as you want, and fit your life insurance agent work around pre-existing responsibilities.

Becoming an Independent Insurance Agent

If you have the drive, becoming an independent insurance agent can be much more lucrative than working for someone else.

The downside? You miss out on the on-the-job training.

But don’t worry! You can get all the training you need from resources like the InsuranceSales101 (IS101).

You can even start your own insurance agency. If you don’t plan to hire employees, you would be considered a sole proprietorship, and your own license is all you need to get started.

Most insurance agents start out as captive agents working for an agency. This is a much easier and less risky route. You can always work towards starting your own company down the road once you have an established client base.

If you want to jump right into working for yourself, make sure you have enough savings to cover your expenses during your start-up period before you leave your current position.

Are You Ready for a New Career?

There’s never been a better time to make a career switch to the insurance industry.

As the economy ebbs and flows, the insurance industry remains strong, and it’s only getting stronger. Becoming an insurance agent is a great way to take control of your career and your life.

Getting started is easy with the right resources.

We offer a host of tools and resources for new and experienced insurance agents here at InsuranceSales101. Click here to learn more about how to succeed in this industry.

Launch Your Life Insurance Agent Career With the Right Support

Although life insurance is a competitive market, if you can break into it, you can build up a beautiful stream of revenue for yourself and generate passive income for years to come. What’s more, reports are showing that increasing numbers of consumers are planning to buy insurance.

If you have been contemplating a life insurance agent career, the time to start is now, and we can help.

With InsuranceSales101, you gain access to industry-leading education and training. We show you how to ramp up leads, close more sales, and sell products like a seasoned pro. We also provide ongoing support and mentorship.

Insurance can feel like a complicated field if you’re entering it. Are you ready to take away the uncertainty and supercharge your life insurance career? If so, check out our training program today.

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