May 24, 2021

A Beginner’s Guide to Becoming an Insurance Agent: Everything to Know

by ILIAA

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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.

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 their own insurance agent duties including:

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

The most lucrative types of insurance to send 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.

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. 

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.

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.

The top companies for insurance agents in the United States are:

  • Family First Life
  • Lincoln Heritage Life Insurance Company
  • USHA
  • USA Benefit Group
  • Appreciation Financial

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 application.

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.

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 Independent Life Insurance Agent Association (ILIAA).

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 ILIAA. Click here to schedule a coaching session today to learn more about how to succeed in this industry. 


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