July 30, 2021

How to Sell Life Insurance: The Ultimate Guide

by ILIAA

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According to reports, life insurance sales are the highest they’ve been since 1983.

One of the spin-offs of the pandemic is it has made many of us hyper-aware of own our mortality and how a sudden loss can impact a family financially.

Thanks to this, consumers are seeking out life insurance plans in droves.

If you’re thinking of selling life insurance, now is the time to hit go on your new career. Life insurance can be highly lucrative and is famous for offering some of the highest commission rates in the industry.

Are you ready to learn how to sell life insurance?

Continue reading to find out how to get started, as well as some invaluable sales tricks and tips.

Pass Your State-Mandated Life Insurance Licensing Exam

If you’re looking to start selling life insurance, one of the first steps is to pass your state-mandated life insurance licensing exam.

Requirements and exams differ from state to state. To get clear on your state’s requirements, you can enquire with your local state department of insurance.

To find out the right contact details, you can check out this insurance department directory page from the NAIC.

Here are some things to be aware of when it comes to state requirements:

  • In some states, you can earn and hold a life insurance license separately from a health insurance license
  • In others, you will need to earn and hold these two license types together
  • If you want to sell different types of life insurance as part of selling securities—then you’ll also need to pass certain exams from NASAA and FINRA

Once you have ascertained your state’s licensing requirements, you can then prepare for the examination. Some states will require you to complete pre-licensing education before you can sit the exam. Some states also require you to have a sponsor.

To start preparing, begin by reviewing your state’s licensing exam outline. You can also take practice exams and an exam prep course.

Invest in Sales Training

Sales training is not mandatory, but it is wise to invest in this if you’re looking to learn how to sell life insurance.

If you want to earn a good income from selling life insurance, it’s imperative that you learn how to get better at sales. Sales is an art, one that can come both naturally and be learned.

Whether you’re a natural salesperson or feel like you need to hone your selling skills, completing insurance sales training will give you the extra edge you need to close more sales and grow your income.

Besides teaching you how to get better at sales, this type of training can also help with your marketing strategies. If you’re planning on selling life insurance as an independent agent, this can be invaluable.

No matter how great a salesperson you are, you won’t have anybody to sell to if you don’t know how to prospect and market yourself successfully.

Get Contracted

The next step in becoming a life insurance agent is getting contracted. Once you are licensed and ready to start selling, you will need to get contracted with carriers to sell their life insurance products.

There are a few different ways you can do this. You can choose to contract directly with carriers or work through an insurance marketing organization (IMO).

There are perks to both these paths. However, working with an IMO is generally the easiest, especially for agents who are still learning how to sell life insurance.

IMOs streamline the contracting process and can give you access to several carriers all in one place.

They also typically offer their members additional courses and support and discounts on commonly used tools and products, such as E&O insurance.

Take Out E&O Insurance

Speaking of E&O insurance, this is something you’ll want to take out before you begin contracting with carriers or selling to clients.

Most carriers require agents to hold E&O insurance. What’s more, if you don’t invest in E&O insurance, you could pay dearly for this down the line.

Simply put, E&O insurance protects you if a client sues you for negligence or inadequate work.

It covers you for the full costs of a claim leveled against you. This includes court costs and any settlements (to the value specified by your coverage contract).

As mentioned above, some IMOs offer discounted or complimentary E&O insurance for their contracted agents. If your IMO doesn’t provide this, you’ll want to look independently for the right E&O insurance.

Create a Sales Funnel

One of the most important components of how to sell life insurance is creating an effective sales funnel. 

If you’re unfamiliar with the term, a sales funnel is the journey that your potential customers go through when purchasing different types of life insurance with you.

If you are an independent agent selling life insurance, there isn’t a marketing department raking in leads for you. Instead, you have to generate your own leads.

One of the best ways to generate, nurture, and convert leads is by building a watertight sales funnel.

Pro Tip: Your sales funnel should target leads at all stages of the buyer journey.

These include the:

  • Awareness stage (leads are aware that they need life insurance)
  • Consideration stage (leads look for more information and conduct research on different types of life insurance)
  • Decision stage (leads make a buying decision)
  • Loyalty stage (leads either remain loyal to you or are lost)

Here are some of the things you can do to build an online sales funnel and attract leads:

  • Create ad campaigns (this can consist of social media ads, display ads, and traditional advertising)
  • Create content that serves your target customer, such as blog posts, videos, infographics, etc.
  • Create and maintain a social media presence
  • Start an email marketing campaign
  • Create landing pages

The idea is to link these different areas together so they seamlessly guide leads down your sales funnel and keep them from dropping off.

Pro Tip: When creating your sales funnel, ensure that it offers leads a personalized experience across the various channels you engage with them. 

Analysis shows that personalized, omnichannel journeys are the most effective for today’s life insurance customers.

Get Comfortable Selling Life Insurance Over the Phone

Another avenue to pursue is phone sales. A lot of new insurance agents shy away from things like cold calling. However, telephonic sales can be an effective avenue.

What’s more, if your sales funnel is functioning properly, and you invest in quality bought leads, you won’t have to cold call. Instead, you can target leads who have already expressed an interest in life insurance products.

Pro Tip: Start by creating a rough script and fleshing out answers to common questions that leads are likely to ask.

Also, make sure you invest in CRM software or other tools that allow you to keep tabs on all your leads.

If leads require a callback, schedule this, and refer back to their profile in your CRM software to remind yourself what their specific needs or problem areas are.

Practice Active Listening

One of the best sales tricks and tips to learn early on is to practice active listening. Instead of trying to rush your leads or press solutions onto them, actively listen to what their issues and requirements are. 

Take the time to answer all of their questions. Also, make sure that you use verbal and non-verbal cues that show you are listening. These are things like:

  • Nodding
  • Making sounds of understanding and attentiveness
  • Saying “mmhmm”
  • Saying “aha”

By truly listening to your clients, you are more likely to win their trust. You will also be better equipped to sell them a product that fits their needs.

Put Your Client’s Needs Before Your Own

Another of the most important tips for selling insurance is to always put your client’s needs above your own.

For instance, don’t try to sell a policy with high premiums to a client with a low budget just because you can make more commission.

If you do this, the client will pick up on it at some point. This can result in fewer sales and fewer referrals.

On the other hand, if you consistently put your client’s needs first and match them with policies that truly fit their needs, they’ll be far more likely to buy. They’ll also be more likely to recommend you to other people they know who need insurance help.

Ask for Referrals

The final piece of the puzzle is generating referral leadsReferral leads are some of the best, as they already have pre-established trust and need.

Some agents are embarrassed to ask outright, but you will probably be surprised how many clients will be more than happy to refer you to family and friends.

Learning How to Sell Life Insurance Is an Ongoing Process

Now you know the basic steps and tips for selling insurance.

However, learning how to sell life insurance isn’t a one-stop-shop. It’s an ongoing process. The more you learn, the better you will become at selling and the more commissions you will earn. 

That is why here at ILIAA, we are committed to helping new and experienced agents with the right coaching, guidance, and industry-leading training.

Do you need support in your journey to becoming a life insurance agent? If so, take a look at our membership program today to access on-demand coaching, hundreds of hours worth of resources and training videos, discounts, and more. 


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