You were born to sell. The question remains, how will you apply your natural sales talents? Becoming an insurance sales professional is one path to consider for establishing a successful career in sales. Insurance sales can pay well, offer security, and great flexibility, especially in later years. But as you browse for insurance jobs, you’re probably wondering how to find the best insurance agent job.
This article outlines the many aspects to look at as you consider different employers that hire for insurance sales jobs. They all look for a set of qualifications like education, experience, and trainability.
It’s hard to find another industry where the potential for comparatively inexperienced applicants can make a significant income in the first year. And even within the financial services industry, few career options offer newcomers an opportunity to earn so much right away as life insurance agents.
But success comes with a cost. Most new agents burn out quickly. Hearing “no” far more than hearing “yes,” along with a mixture of obscenities sometimes is disheartening. Additionally, some people don’t hold insurance agents in very high regard. But, if you can stomach the rejection, the flexibility and paycheck are well worth the effort.
Prepare Yourself to Become an Insurance Agent
Usually, a high school diploma is all you need. Still, many employers prefer candidates with a degree, especially in business or finance.
Then, you need to get a license in your state to sell insurance based on your specialty or what is called your “line of authority.” You can enroll in pre-licensing courses as you complete your education to help get your foot in the door.
A sales background could get you hired, but you still have to take the 25 to 50-hour course and pass the state-administered insurance licensing exam. Most insurance carriers have internal company training programs, so their salespeople learn about the products they sell.
Here are some factors to consider as you work to find the best insurance agent job.
Researching Companies
As you are putting together your resume, start taking the initiative to research different insurance companies. While many of them are financially sound and well established, it is essential that you get a sense of their corporate culture. It is that culture that determines if you will fit in the long term and be happy there. Working for the wrong insurance company can contribute to burning you out, which could haunt you for your entire career. Ideally, you’ll want to look for a well-known company with a good reputation with customers and other agents and high ratings with insurance rating agencies.
The very best place to start is to visit the rating websites for A.M. Best, Moody’s, and Standard & Poor’s. From there, you can build a list of insurance companies with ratings of “A” or better in your state. Those companies typically offer secure products with reasonable prices and emphasize solid compensation packages to keep quality agents happy.
Once you create the list, start looking carefully at each of the companies. Because of high turnover rates, most companies post job listings prominently on the website, by area. So, you can easily search through them. When you encounter a company with an opening in your area that could be a good cultural fit for your personality, use the website to apply for the position.
Follow up regularly until you get a final answer. Don’t worry about being pushy! Many recruiters don’t even interview potential agents who don’t make a follow-up call! It’s part of the interview process because follow-up is a huge requirement for the job. Once you have an interview, continually communicate your entrepreneurial personality because this will get you hired over all other factors combined.
Your First Year
If you are lucky enough to get hired, expect to spend most of your first 12 months networking, handing out business cards, and making phone calls. Your manager will remind you that your sole purpose now comes down to finding potential customers. In fact, your manager will likely care far more about how many new contacts you made this week than how much you know about the products.
Many new agents struggle financially until the first sales commissions start coming in. Some companies provide a small salary, but this is getting rarer and rarer. You may find you are lucky to find a position with some compensation for the first two months of your training before you are on commission-only.
Reading Reviews
Start by only applying to companies with top reviews from the rating agencies like A.M. Best, Moody’s, and Standard & Poor’s. Secondly, visit your state insurance commissioner’s website to check out the company’s complaint history, too. Typically, insurance companies maintaining less than an “A” rating, and those using a multilevel marketing sales model, have more complaints than larger, more established insurance companies.
But don’t stop there. Read customer reviews! Look for reviews everywhere. Check any Google reviews, and search for the name of the company and the word “reviews.” Check social media, too. See what customers say and how the company responds.
A job with an insurance company that doesn’t fit with who you are can ruin your dreams for a promising insurance career. If you genuinely want a career in life insurance, take your time, do your research and wait for an ideal opportunity with the right company. Your patience and due diligence will maximize your likelihood of long-term success.
Understanding Insurance Agent Job Descriptions and Duties
While there are several types of insurance, like auto and health insurance, the most money is earned by life insurance sales agents. These agents focus on helping families, businesses, employers, and others protect against financial losses when someone dies.
Your specialty and insurance licensure guides you as you explore becoming an insurance agent, and the insurance sales jobs open to you. Insurance jobs basically fall into these categories:
· Life Insurance
Life insurance agents sell policies and annuities that pay the beneficiaries when policyholders die. The compensation is usually straight commission at a higher rate than other insurance sales because life insurance is difficult to sell, and customers are harder to find. Usually, life insurance agents receive between 30 to 90% of the first year’s policy premiums. Later, the agent receives only 3 to 10% of the annual premium in renewals or trailing commissions.
· Property and Casualty Insurance
Property insurance agents help customers protect their property, like their homes, vehicles, jewelry, art, and other valuables. Casualty specialists offer liability coverage against any financial losses for accidents, including auto, homeowner, and renter insurance. Both property and casualty sales are usually combined as a general area of expertise.
· Health and Long-Term Care Insurance
Health insurance agents work for health insurance companies. In contrast, health insurance brokers work for consumers to help them find and enroll in healthcare plans. This category includes agents who sell assisted living coverage and long-term disability insurance.
Being a Captive or Independent Agent
Knowing the type of agent position you are applying for is an essential first step. Insurance companies hire both captive and independent agents.
Captive agents only sell insurance from just one company, while non-captive, or independent agents, represent several insurance carriers. In both positions, a typical insurance agent spends the bulk of their time marketing to identify prospects, providing quotes, and persuading them to purchase new insurance.
Captive Agents
Captive agents usually work for a major insurance company like Allstate, Farmers, State Farm, or The Hartford. A captive agent sells policies on this employer’s behalf. Your paychecks come from that one company, as a salary, commission, or a combination. As a captive agent, you could be a full-time employee with the appropriate employee benefits. The benefits of working directly for the insurance company include assistance with administrative tasks, national advertising budgets, and, often, a client list.
You will find that with a limited range of products, you develop an in-depth knowledge of your employer’s company offers. You are likely to have sales quotas, often for specific products. Captive agents are known for exceptional customer service, spending time on relationship building, and fact-finding.
Captive agents are employees, so there is no financial backing required to start up a business. The company provides:
- Office space and equipment
- Bonuses
- Motivational programs
- Employee benefits
- Ongoing sales and product training
- National advertising budget
- Admin staff who process paperwork
As a captive agent, you will typically receive a list of prospects because when consumers respond to advertising campaigns, the company refers them to an agent nearby.
Independent Agents
As an independent agent, you sell policies from several different insurance companies. You connect insurance buyers and sellers to facilitate the transaction. You’ll receive commissions for any policies you sell, and you are not an employee of any insurance company.
Since you represent many products from several companies, you need to learn to quickly research possible policies and rates to fulfill your customer’s needs. You can provide options for your customers from different companies, as many insurance carriers offer similar policies. The insurance companies pay you a commission to sell new policies, and some provide higher commission rates than others.
Without the support of a single insurance company, you are responsible for generating your own business. You’ll need to create marketing material and manage your paperwork and other admin function operations. But chances are you will benefit from general advertising campaigns by the insurance companies you represent.
For customers shopping around for insurance, as an independent agent, you are in a great position to check out different companies’ rates at the same time. More company quotes mean a better chance of finding the best rate and coverage.
Captive or Independent – Your Choice
As you consider your insurance career, deciding if you want to be a captive or independent agent is probably the most critical factor. Captive agents have more security. Independent agents have more freedom. The day-to-day work is much the same. Selling insurance either way means finding prospects, getting quotes and making presentations.
As you read the descriptions of the two types of agents, chances are you are drawn to one. If so, research the opportunities in that area first. It is likely the best career path for you.
Owning a Book
An insurance agent’s book of business is a database of all the insurance policies they have written. It takes an average of 3 to 5 years to build up a book of business. At that level, it sustains a comfortable living for the agent and pays for a staff support person.
You can work for those 3 to 5 years to build up your own book, or you can consider purchasing all or part of another agent’s book. Retiring agents often sell their books to younger agents. Failed agents sell their books when they quit. Buying a book of business is a quick way to have your business grow. But it is vital you do lots of research before you start paying someone for their book.
Advice for Agents on Buying an Insurance Book of Business
There is lots of advice out there on buying a book of business because it is such a quick way to increase your income. But there are risks. So, consider this advice carefully as you look at your career path to find the best insurance agent job.
Research! Be Sure to Do Your Research!
Before you buy any insurance agent’s book of business, always do your due diligence by researching the products, the companies, the underwriting processes, and the details about the target market. Ask these questions to begin.
- What’s the competition like?
- Are customers in the area high risk or low risk?
- Do the products align with this target market?
Also, look at market trends, both locally and nationally, to take into account future community plans, legislation, or other changes that could impact your decision to buy the insurance agent’s book of business.
Learn the Audience and Target Market in the Book
Every agent has a unique personality, and purposefully or not, each one has a “type” of customer. Recent online marketing trends have made targeting advertising easier, so books are more focused, too. You may find that retiring insurance agents have less targeted books as their customers may be more dissimilar. Failed agents also sell their books. Their customers may be more similar.
Either way, it’s critical you make sure you sell products that fit the needs and align with the local consumers. For example, if final expenses is a primary product of yours, you won’t want to target an area with young people in the overall demographic. It is much better to target an area with high retiree demographics. Or, if you sell home insurance policies, don’t buy a book focused on areas with mostly renters, such as large cities. Overall, make sure you can sell your products competitively.
Buy a Book that Includes High-Value Customers
When you buy an insurance agent’s book of business, you want most of the policies in the book to be from high value and not high-risk customers. You need to take into account the retention levels. That way, you get an idea of the real value of the book. You want to have enough time to build on the book, not spend all your time and energy maintaining it, so you don’t lose too many clients.
Retired Agent’s Books are Safer than Failed Agent’s Books
Usually, retired agents have more lucrative books than agents who dropped out of the field because they did not do very well. Whichever one you might purchase from, ask these specific questions to help understand what you are buying.
Ask a retired agent:
- How often would you typically reach out to these customers? What method(s) do you use?
- How many have unique relationships with you? For example, relatives, friends, etc.
- When did you last complete an audit?
- What is the primary source for finding prospects that became these customers?
- If the office location were moved, what impact would that have on the book?
Ask a failed agent:
- What do you think went wrong? Why are you leaving the industry?
- Why are you selling your book?
- What could have been done differently to support you?
- Where did this book come from? Was it purchased? From where? When?
Realistic Expectations
Many agents learn the hard way that acquiring a book of business does not necessarily mean a large number of clients stay. And those who do are not necessarily interested in meeting to discuss their financial situation. Customers have no obligation to meet with you when you buy the book from their previous agent. They don’t even need to keep their policy assigned to you. While there are many opportunities to cross-sell products, it is essential to have realistic expectations. Know the demographics of customers in the book of business you purchase.
The Fastest Way to Grow
Do your homework. Ask for internal reports and reports from insurance carriers to see growth, retention and loss ratios. Make sure a book of business you purchase fits your style, and you have support staff to manage the workload. Buying an insurance agent’s book of business is the fastest way to increase your income.
Starting Off as an Insurance Producer or Agent
“Insurance agent” is a term most often used within the insurance industry. Still, the term “insurance producer” is frequently the official title used for licensing by different states. Regardless of which term you use, the job has the same responsibilities.
The steps to becoming an insurance producer begin with your high school diploma and your 18th birthday. After that, here are the next steps:
1. Determine what type of insurance you prefer to sell.
- Life Insurance – You will sell policies and annuities to provide for the beneficiary when the insured dies. Life insurance sales agents are known to have the highest earning potential. But it is also considered the most challenging career.
- Health Insurance – You sell medical, disability, Medicare supplements, and policies for long-term care.
- Property Insurance – Selling insurance policies for homeowners, commercial properties, and inland marine assets.
- Casualty Insurance – Offering auto, crime coverage, workers compensation, and professional liability policies.
- Surplus Line Insurance – You will sell coverage for unusual and unique situations with specific risks that are not covered by a standard insurance policy. These include situations like daycare insurance, or oil drilling rigs insurance, also special events like car races, state fairs, and outdoor amusement parks.
- Variable Products Insurance – This is the sales of insurance products with the element of an investment. To sell variable products insurance, you will also need a securities license.
- Personal Lines Insurance – Consumer policies for products like vehicle insurance, homeowners’ insurance, and renters’ insurance. Also, you will sell policies for boats, ATV’s, motorcycles, or snowmobiles only for individual consumers.
You don’t have to choose just one! You are free to choose more than one line of authority. Insurance agents regularly combine coverage lines, like property and casualty insurance.
2. Learn about your state’s pre-licensing requirements.
Some states do require that you complete a course with a number of hours of specific pre-licensing education for the different types of insurance. If an insurance company or brokerage hires you, they may sponsor you through this training.
3. Pass the state insurance license exam in your chosen area(s).
Transitioning into Being an Agent
Making professional changes is a big decision. If you want to help people in your community and use your entrepreneurial talents, becoming an insurance agent might be right for you. Starting new professional ventures can be daunting, so extra support is usually offered to new insurance agents.
Every insurance agent was new at some point! Many agents start their careers in many different positions, like high school sports coaches, farmers, bankers, store managers and selling other products.
Effective agents learn to leverage prior experiences, skills and networks to find success from any background. If you work hard in your community and put the time in it takes to do well, transitioning into being an insurance agent can be simple.
The Top Characteristics of Successful Insurance Agents
Although successful insurance agents come from very different backgrounds, they share certain characteristics that help them thrive in this career. Are you a go-getter? Are you competitive and passionate about your work? These are common traits of successful agents.
On the other hand, truly successful agents know what motivates them. The best fit for finding the best insurance agent job is to genuinely want to protect the people in your community. Agents who are not just selling insurance to meet a quota or make a paycheck do much better! Do you want to keep the people in your community safe when unexpected disasters strike? That is a key to success in the insurance industry – caring about the community.
Training and Marketing Offered by Insurance Agencies
Take some time to research the training programs offered by each potential insurance company. Check for both initial training for new agents and ongoing support for when you become a seasoned agent. Ask about marketing tools to help grow your business, too. Understanding support and training options will help you plan for how to succeed and move forward.
Taking Over an Agency
Buying any kind of business can be challenging, especially the first time. Whether you decided to strike out on your own or your successful agency has decided to expand, consider these factors before taking over an agency.
Why Are You Making this Purchase?
The purchase of an insurance agency is a financial investment. When you live in the area where you will invest, it is also a commitment to the community. Before buying, clarify why.
The ability to sell, manage a business and provide customer service are transferable skills. But be sure you want to run a business because that is what you are buying. Being the agency owner is not the same as being an employee, especially as the business grows.
Are Financial Resources Available?
If you are already an insurance agent, you have a book of business that continues to pay you year after year. These are valuable customers. This is your basis for financial security.
When you buy an agency and transfer customers, it takes time to develop and maintain a base of clients. Insurance businesses are built on steady revenue streams, but it takes hard work to do the groundwork for that revenue.
To take over the business requires you make a financial outlay, likely a down payment up front and the rest over time. Make sure you have the financial resources in cash to cover the initial costs, but also some operating capital to run the business for at least six months.
Conclusion
The decision to embark on a career as an insurance agent could set you up for a lucrative and exciting lifestyle. Carefully do your research to determine what type of agent you want to become and which company or companies fit with who you are. If you follow that step-by-step process, you can find the best insurance agent job for you and your future.
