So you think you want to become an insurance agent, but you don’t know where to start?
Well you’re in the right place!
In this article, I’ll teach you how to become an insurance agent in 2018 – even if you have zero experience in this industry.
But first, let’s take a look at the insurance industry in the US.
It’s no secret that the US insurance industry is huge.
How huge is huge? Well, for one thing, our insurance industry generates the most revenue in the entire world. We’re talking about over 1.2 trillion dollars worth of annual revenue.
And the best part?
We’re nowhere near saturated yet.
While we do have a high premium volume in the US, our premiums paid per capita of the population (also known as insurance density) aren’t all that high. In fact, we have a lower insurance density than Taiwan, UK, Hong Kong, Switzerland, and other countries.
This means there’s still room for growth in the industry… and that it’s not too late for people like yourself who want to get started in this field.
Now, in this guide to becoming an insurance agent, you’ll learn:
- How much an insurance agent makes
- What insurance agents do
- What the difference is between an insurance agent and an insurance broker
- How to find a job as an insurance agent
- What happens if you don’t hear back from any of the companies you applied to
- What happens if you’ve received offers from multiple companies
- How to become an independent insurance agent
- What life as an insurance agent looks like
We have a lot to cover – so let’s dive right in!
How much does an insurance agent make?
According to Indeed.com, which calculates its estimates based on 117,720 employees, users, and past and present job advertisements, the average insurance agent’s salary is approximately $63,096 per year.
Based on the data provided by Indeed, Bankers Life, Farm Bureau Financial Services, as well as AIG seem to be the three companies which pay the most.
Running in the same vein, you might be wondering:
How much does it cost to become an insurance agent?
Your costs come down to the training you’ll have to attend (more on that later!) before you get certified. Expect to pay around $300 – $500.
Now that you know what to expect when it comes to insurance agent salary and the costs of becoming an insurance agent, let’s move on to…
What do insurance agents do?
In a nutshell, insurance agents sell policies to customers on behalf of insurance carriers and brokerages.
There are many different types of insurance, including automobile insurance, home insurance, and life insurance.
According to The Bureau of Labor Statistics, though, job prospects are likely to be the brightest for agents who sell health and long-term care insurance. Those who provide financial planning services in addition to insurance sales are also likely to do well.
Now that’s clear, let’s break it down further.
What is the difference between an insurance broker and an insurance agent?
Essentially, the difference between these categories of insurance sellers lies in their appointment (or lack thereof).
Brokers are not appointed by insurers, and they submit applications on behalf of buyers in order to solicit insurance quotes from insurers.
Agents, on the other hand, are appointed by insurers and sell products on behalf of those insurers.
If you want to be a captive agent, this means you’ll only represent a single insurer.
If you want to be an independent agent, you’ll have to represent multiple insurers.
So which vocation is more suitable for you? This depends on how ambitious you are, and whether you want to hit the ground running.
As compared to insurance agents, insurance brokers are required to have more in-depth knowledge of a wide array of insurance products.
The upside to this?
Brokers are able to charge administrative fees or premiums which are higher than what a typical agent would charge.
The learning curve is much more challenging.
You’ll need to acquire a certain amount of technical knowledge regardless of whether you choose to be an agent or a broker, that’s for sure. But if you want to become an insurance broker, you’ll have to be familiar with an entire gamut of products and services on top of this.
Another question that I get asked a lot…
How can I find a job as an insurance agent?
Before we get into this, let’s go over the steps to becoming an insurance agent. This varies from state to state; becoming an insurance agent in Texas, for example, might differ slightly from becoming an insurance agent in Florida.
Having said that, here’s a general guide that will teach you how to become a licensed insurance agent.
Step 1: Complete your required training
Most states do require insurance agents to complete a training course, which may take a few days or a week to complete.
During your course, you’ll be learning about insurance ethics, the types of insurance policies, as well as the state laws which are applicable to the different types of policies. Be sure to pay attention – you’ll be tested on this material during your state licensing examination!
Apart from this short training stint you’re required to go through before you become an agent, you’ll also be provided with on-the-job training when you’re hired.
Once you’ve familiarized yourself with the different insurance products that your agency offers, you’ll also learn exactly how to sell insurance, step by step. Some companies go one step further in matching their new hires with an experienced mentor who can provide guidance and support.
PS: If you’re wondering what kind of education level you need to become an insurance agent, the answer is that it varies. Many employers require only a high school diploma, but there are some firms who are looking for candidates with a college degree. Other requirements to become an insurance agent include age restrictions – you have to be at least 18 years old or above in order to apply.
Step 2: Pass the state insurance licensing examination
The specific examination you’ll have to take depends on which state you’re in and the type of insurance you’ll be selling. Throughout your career as an insurance agent, you’ll also have to periodically renew your license.
Pro Tip: License renewal aside, it’s also good practice to constantly update yourself with best practices in the industry. One great training resource that you can look at is the Independent Life Insurance Agent Association (ILIAA), which provides you with all the materials you’ll need to fine-tune your skills.
Step 3: Pass a background check
You’ll have to submit certain documents for your background check. As the exact procedure varies by state, you’ll have to enquire with your state’s department of insurance to find out more.
Step 4: Start applying for insurance agent jobs OR start your own agency
People often ask, “How long does it take to become an insurance agent?”
The answer is that it varies anywhere from a month to an entire year. What surprises most folks is that the training and certification doesn’t take up the bulk of the time – applying for jobs does.
I wish I could give you some top secret formula which will help you land your job in three days – but sadly, I can’t.
This part of the process is pretty similar to what you’ll be going through if you’re applying for any other job. You’ll have to send in your resume to multiple places and cross your fingers in the hopes that you get shortlisted for an interview.
Here are a few tips on making your resume stand out, though:
Use a free tool such as Canva to design a resume that will wow your potential employers.
If you’re submitting a cover letter as well, talk about personal achievements that highlight a go-getter, can-do attitude. In this line, academic qualifications aren’t super important – but your potential employers will want to know you’re a self-starter who takes initiative.
If you really want to go the distance and impress, consider making a video resume. You don’t need fancy equipment (your smartphone and a stable surface will do the trick!) and you can get really creative with this.
PS: This article has some great tips on how to produce a high-quality video resume.
If you don’t want to start as a captive insurance agent (working for someone else), then you can always skip this step and go straight to becoming an independent insurance agent.
While this is a much harder path (since you have to learn everything for yourself, rather than learning it from someone else), it can also be much more fruitful. To speed up the process, you can always take the training courses we offer at ILIAA.
What happens if you don’t hear back from any of the companies that you applied to?
Don’t give up! Continue applying to more places – and at the same time, call up the firms that you did apply to and check in with them to see if your application has been processed yet. There are certain insurance companies who, as a rule of thumb, do not interview a candidate if he or she doesn’t make a follow-up call, so don’t bust your chances by neglecting this essential step.
What happens if you’ve received offers from multiple companies?
Pop some champagne and take your significant other (or best friend, or parents) out for dinner!
Okay, jokes aside, you’ll need to do some research in order to figure out which company is the best fit for you.
If possible, you’ll want to get your career started at a relatively well-known firm which has a good reputation in the community.
Why? If your potential customers have heard good things about your company, they’ll be more open to speaking with you and learning about the products you’ll be recommending to them.
On the flip side, if your potential customers have never heard of your company (or, worse; heard bad things about your company), they’ll already have a negative impression of you to begin with. This will make further discussions extremely tough!
So, how do you dig up the dirt on each of these companies that have offered you a job?
Simple – check out platforms that rate insurance companies, such as A.M. Best, Moody’s, and Standard & Poor’s. Using these tools, narrow your list down to the companies which have been rated “A”, or higher.
With these highly-rated companies, you can be reasonably confident that they sell their products at a good price and don’t engage in hard-sell or aggressive sales tactics.
How to Become an Independent Insurance Agent
If you’re wondering how to work for yourself, or how to become an insurance agent from home, this is relatively straightforward. Assuming that you’re simply planning on operating a sole proprietorship (meaning that you aren’t hiring employees), you only need your individual license – and you’re good to go!
Although it’s possible to work for yourself and work from home once you get your license, it can be easier to start off your career with an established company before making the transition.
Even if you’re dead set on working for yourself in the long run, think of the company as a stepping stone. At this place, you’ll get to learn sales techniques, witness top performers in action, and gain a lot of insights that will help you become a better insurance agent.
Once you’ve done that (and established a base of loyal clients who are good for referrals), then take the plunge and set up your own business.
However, JC Matthews, the co-founder and CEO of Simply Insurance and author of The Ultimate Guide to Term Life Insurance, has some of his own advice for you:
“My number one tip to becoming an insurance agent is to be an independent agent, don’t go captive and don’t quit your day job.
You need to make sure that you sign up for “as earned” contracts and stay away from any type of advance on your commissions, and grow your business over time.
Insurance income is a long term play, so you need to keep your job until your monthly residual income trumps your annual salary. If I could start over, I would have gone that route.”
What does life as an insurance agent look like?
Now that you know how to become an insurance agent, it’s time to get a glimpse into life as an insurance agent.
In a nutshell:
Life as an insurance agent isn’t a bed of roses. Instead, it’s a constant hustle.
Image from HuffingtonPost.com.
You’ll probably be networking, handing out business cards and making calls 24/7 – especially in your first year or two.
If you’ve never done sales before, you’ll have a lot to learn. It’s all about building rapport with the people you meet and identifying their pain points so that you can sell effectively to them.
Many people are drawn to this industry because it’s seen as a career in which you can make a decent amount of money whilst enjoying more flexibility that you can’t get with a desk-bound job.
The truth is, however, that life as an insurance agent isn’t all that easy. It’s highly unlikely that you’ll be able to make many sales within your first few months; given that your commission is likely to make up the bulk of your take-home pay, you can expect money to be tight during this initial period.
But don’t let that discourage you. Being your own boss and working on your own terms is worth every second of hustle. It certainly was for me, and if you’re a go-getter, I bet it will be for you, too.
Some parting words
Congratulations, you now know how to become an independent insurance agent (or a captive one, if you’d prefer that)! If you’re still raring and ready to go after hearing the pros and cons, we salute you.
Becoming an independent insurance agent is a challenging, but rewarding career. You don’t need a lot of fancy qualifications or advanced degrees, which makes this a great choice for those who don’t have a degree or don’t care for the one they got!
Rather than “qualifications” on paper, you’ll need soft skills like:
- Rapport-building skills.
- Emotional intelligence.
- Communication skills (both verbal and nonverbal)!
- High energy levels.
- And, above all, the ability to handle rejection.
Practically every insurance agent goes through that initial phase where they just can’t close deals – so don’t expect your journey to be any different.
Having said that, as long as you refine your skills and constantly work on improving your techniques, you’ll see a gradual uptick in the number of deals you’ve closed…
Until you reach the snowball point where your clients are recommending you to everyone you know, and suddenly you don’t have to lift a finger to get more business.
That’s the end goal right there – to have potential customers come to you, instead of you reaching out to them. But before you “level up” to that stage, there’s a lot of work to be done.
One step at a time. Before you know it, you’ll be well on your way to earning that $63,096 (and MUCH more).
Good luck – and don’t hesitate to ask any questions you have in the comments below!
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