April 29, 2021

Your Free Insurance Leads Aren’t Free: How Much Do They Really Cost?

by ILIAA

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You want freedom in your career and you want to be your own boss, right? That’s why you’re interested in becoming an insurance agent. And you’re not the only one — the insurance agent role is expected to grow 5% by 2029.

Because of the competition, you’ll need a way to score leads. Many insurance agents choose to accept free leads, even if it means smaller commissions. But leads are never free. In addition, leads vary by quality — no matter their price.

And should you buy your leads? Here’s what to know about free insurance leads and how to choose the right option for you.

Why Your Free Leads Cost More Than You Think

Insurance salespeople usually have two contract options when they become an agent:

  • 100% first-year commissions, but you have to find your own prospects
  • 60% first-year commissions and you receive free leads

The second option sounds better, right? Think again. You’re making less commissions than the agent who chooses the first option.

Other than the fact that the first agent receives 100% commissions, paying for high-quality leads will always result in a great ROI. And with so many options to save on your insurance leads, the amount you spend on your leads won’t take as much out of your profits.

Another downside of choosing free leads is you have less control. The top producers can pick the best leads and send the rest to you. And if you decide to leave the agency and pursue insurance sales, you’ll still have to find your own leads at the end of the day.

Should You Pay for Insurance Leads?

While there are many benefits of paying for insurance leads, is this really the best option for you?

Well, let’s take a look at your situation.

Let’s forget about your upline and whether or not they provide free leads. Let’s focus on you.

First, do you have existing referrals? If you have strong contacts who keep supporting you and are recommending your services to their family, friends, and colleagues, then you have a strong bubble that you can rely on.

However, people are often unpredictable. This is where marketing comes in. Let’s say you’re an independent agent with your own business. If you have a website and generate quality leads without paying for them, you may benefit from gaining more leads via marketing.

But what if you have neither? If you’re a new agent and don’t have a website or a devoted clientele, there’s nothing wrong with buying insurance leads. Even if the upline provides leads, buying your own leads will help you secure more clients and will help grow your business.

Different Types of Insurance Leads

If you want to buy insurance leads, there are many types available. These include:

  • Telemarketing
  • Direct mail
  • Social media leads
  • Aggregated leads
  • Meeting leads (via phone or face-to-face)
  • Warm leads and transfers
  • Cold leads
  • Cross-selling and referrals
  • Marketing

All of these leads vary in quality and cost. For example, social media leads are often effective. Vendors usually attract these leads through low-cost advertising. Once they have enough customer information, they pass these prospects onto the agents.

Other examples, such as warm transfers, are often expensive but are more promising. Cold leads are cheaper, though you may not achieve sales because the prospect hasn’t previously shown interest in purchasing insurance.

Be very careful of the lead provider you choose. For example, if you choose telemarketing leads, the vendor could gather lead information that violates federal and state laws. Make sure you only get leads from reputable and compliant sources.

How to Get Insurance Leads

Did you make the decision to purchase insurance leads? If so, you need to have a plan in mind. Here’s how to sell life insurance and get the best insurance leads.

Start With Your Existing Network

Even if you’re a new agent, there are ways you can sell to your existing network. This is a cheap and often free way to gain new leads. While this is a good stepping stone, you’ll eventually have to buy leads to expand your network.

Cross-sell to different people and contact all of the connections you have. See if these individuals can also refer your services to others.

Look at Your Local Market

All insurance agents should first gauge whether or not they can grow locally.

First, identify if your local market is saturated enough to grow. If so, you can start investing in different local leads as well as local advertising. Always track your leads and successes to ensure your efforts are paying off.

Know-How You Want to Grow Your Business

Do you want to sell within your market? Or do you eventually want to grow? Knowing how you want to grow your business will determine the type of leads you should buy. For example, if you don’t want to solely stick to your local market, you can buy leads online.

Tips When Buying Leads

Once you start buying leads and generating commission, you should know some additional best practices as your business thrives. Here are some of our best tips.

Get Licensed Nationally or in Different States

Getting licensed in multiple states or even nationally offers more than compliance. You’ll be able to save on leads across the country.

That’s because companies that supply the leads have to spend money to geo-target the leads. If you’re licensed nationally, the lead company doesn’t have to spend the extra money to generate those leads.

If you’re not going to get licensed nationally, at least get licensed in states that aren’t saturated. This puts you at a competitive advantage since you’re attracting leads in an open market. Since these markets aren’t populated, you can often negotiate a better rate.

Choose Exclusive Leads

Exclusive leads are those sold to a single agent or their agency. You’ll have more of a chance to score the sale than if you were to get a shared lead, which is a lead that’s “shared” among different insurance agents.

But more agents still choose shared leads. They’re more affordable and agents still get the false sense that they will score the lead. Even though exclusive leads are often more expensive, they will come with a better ROI.

As an alternative, you can purchase high-quality shared leads. While they’re still shared among other agents, the number is usually limited to two or three other agents. This does give you a better chance at earning the sale while saving you money.

Buy in Bulk

Another great way to save on high-quality leads is by buying in bulk. Some companies offer bulk lead deals which can save you money. However, these may only be worth it if you already have a good cash flow going.

Don’t worry, you can still buy leads in bulk if you’re a new agent. But you’ll need a great strategy. We recommend investing in great training and developing connections with other agents. This way, you can expand your network and your leads at a fraction of the cost.

Don’t Fear High-Risk Leads (Aged Leads or Not Ready To Buy Leads)

High-risk leads aren’t ready to be customers. While they may not guarantee a sale, they’re more affordable than low-risk leads. Many agents avoid high-risk leads to ensure they don’t suffer a loss; however, investing in high-risk leads may not impact your bottom line as much as you think they will.

There are also benefits of investing in high-risk leads. Since fewer agents are investing in them, you have a competitive advantage. Some may even come with higher commissions, even with a lower closing ratio.

Buying Leads Isn’t the Only Way to Gain Success

While we’ve been giving advice on buying leads for your insurance business, this isn’t the only way to gain success. If you’re just starting in the insurance business, you’ll want to have training and coaching to ensure you learn the tricks of the trade.

An insurance coach can give you one-on-one attention and will help you with any pain points you have. They can answer your questions and can explain the best ways to attract leads as well as closing sales.

A life insurance coach can also teach you essential soft skills to ensure you succeed. These include consistency, honesty, and professionalism.

Most coaches know where you are now. That’s because they were once there. They learned a lot in their experience as insurance agents and are willing to extend that to new agents.

Even seasoned life insurance agents can benefit from training. A coach can refine your sales skills, refreshing your knowledge of updates in the industry so you can increase your sales.

There’s another reason to consider signing up with life insurance sales training — many training programs can refer you to companies that sell leads. These companies are reliable and only produce high-quality leads, ensuring you can generate sales.

Should You Get Free Insurance Leads? Consider Coaching Instead

While many new life insurance agents may choose to get free insurance leads, always know this may come with a price. Instead, life insurance coaches and mentors can teach you how to attract prospects and close sales while referring you to reliable lead vendors.

Click here to see our pricing and plan options.


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