Lawyers: Life Insurance Agents? Exploring Dual Careers

Lawyers and life insurance agents are both highly skilled professionals, but they require different qualifications and perform distinct roles. While a lawyer practises law and provides legal advice, a life insurance agent sells life insurance policies and helps clients prepare for unforeseen events. So, can a lawyer also take on the role of a life insurance agent? Let's explore this intriguing question.

Firstly, it's important to understand the distinct nature of these professions. Lawyers undergo extensive legal education and training, enabling them to provide legal counsel, interpret laws, and represent clients in various areas of law. On the other hand, life insurance agents focus on selling life insurance policies, which provide financial protection for individuals and their loved ones in the event of their death.

To become a lawyer, individuals typically need to obtain a bachelor's degree, complete law school, and pass a bar exam. This rigorous process equips them with the knowledge and skills to navigate the complex legal system. In contrast, the requirements to become a life insurance agent are generally less stringent. While some states mandate a high school diploma or GED, others may require additional coursework and a licensing exam.

When it comes to daily tasks, lawyers engage in legal research, draft legal documents, and advocate for their clients in court or during negotiations. Life insurance agents, on the other hand, spend their days pursuing potential clients, making sales presentations, and meeting with clients to discuss long-term goals and insurance options. They also assist clients and beneficiaries in processing insurance claims promptly.

While it is possible for a lawyer to explore a career shift and become a life insurance agent, it is not a direct path. The skills and qualifications required for each role are quite different. However, a lawyer's communication skills, analytical abilities, and understanding of legal frameworks could be advantageous when transitioning into the life insurance field.

In conclusion, while lawyers and life insurance agents serve different purposes, there may be opportunities for career diversification. However, the specific requirements and challenges of each profession should be carefully considered before making any decisions.

Can a lawyer be a life insurance agent in their free time?

Life insurance agents sell policies to people in their community to help them provide financial support for their loved ones in the event of their death. It is a career that can be lucrative but also comes with challenges. The job requires a strong ability to handle rejection, constant hustling, and networking. Agents are mostly paid through commissions, which can be as high as 45-50% of the annual premium for the policy.

While there are no explicit restrictions on lawyers becoming life insurance agents, it is important to consider the time commitment and potential ethical implications. Becoming a life insurance agent requires completing licensing requirements and passing a licensing exam, which may vary depending on the state. Agents also need to actively market and network to find potential customers, which can be time-consuming.

Lawyers already have a demanding career, and taking on an additional role as a life insurance agent may not be feasible. However, if a lawyer wishes to pursue this path, they should ensure they can dedicate sufficient time and effort to both careers. It is also essential to consider any potential conflicts of interest or ethical guidelines that may apply.

Overall, while it is legally possible for a lawyer to become a life insurance agent in their free time, the feasibility and success of such a venture depend on various factors, including time management, ethical considerations, and the ability to handle the challenges inherent to the life insurance sales industry.

What are the pros and cons of being a life insurance agent?

While becoming a life insurance agent can be a lucrative career opportunity, it is not without its challenges. Here are some pros and cons to consider before making the decision to pursue this career path:

Pros:

• Lucrative industry: Life insurance agents can earn high commissions, especially in the first year of a policy. For example, an agent selling a policy with a $100 monthly premium would make a $1,200 commission in the first year.
• Flexible work options: Life insurance agents can choose to work for themselves or for a company, providing the freedom to control their affairs or the stability of steady earnings and guidance from industry veterans.
• Specialization: Agents can specialize in areas such as annuities or group coverage, becoming authorities in their field and networking with business contacts.
• No degree required: While having a degree can be advantageous, it is not a requirement to become a life insurance agent.
• Flexible work hours: Many life insurance agents can set their own schedules and work from home.
• High earning potential: Life insurance agents have the opportunity to earn a high income, especially if they possess the right mindset and work ethic.

Cons:

• Demanding and competitive: The life insurance industry is highly competitive, and agents often need to work long hours to find and secure clients.
• Rejection: Life insurance is a challenging product to sell, as most people do not like to acknowledge their mortality. Agents need to have thick skin to handle the frequent rejections and closed doors they may encounter.
• Commission-based earnings: Life insurance agents are typically paid on a commission basis, which can be advantageous for those with an established client base but may be difficult for newcomers to the industry.
• Difficult to find leads: With stiff competition in the market, it can be challenging to find good leads, and there is a likelihood that any leads found have already been contacted by multiple agents.
• Licensing requirements: Before becoming an agent, individuals must meet basic eligibility requirements and complete pre-licensing education, which can be time-consuming and costly.
• Time-consuming: The life insurance industry can be demanding, requiring agents to navigate strict regulations, complex paperwork, and client inquiries.

What qualifications do you need to become a life insurance agent?

To become a life insurance agent in the US, you'll need to meet certain qualifications and licensing requirements. Here's a detailed guide on what you need to do:

Education Requirements:

Firstly, you'll need a high school diploma or a GED to pursue a career as a life insurance agent. While a bachelor's degree is not mandatory, some insurance companies may prefer candidates with a degree in a related field such as business or marketing. If you're planning to work for a company that requires a degree, ensure you meet their specific educational criteria.

Licensing Requirements:

Obtaining a life insurance license is a crucial step in becoming a life insurance agent. The specific requirements for obtaining this license vary from state to state, so it's essential to check with your state's insurance department for the most accurate and up-to-date information. Here's a general overview of the steps you'll need to take:

• Complete Pre-License Education: Most states require you to undertake a pre-licensing education course, which can be done online through a third-party financial education company. The required hours for this course differ by state. For example, California mandates 20 hours for a life insurance license and 40 hours for a joint life, accident, and health license.
• Submit a License Application: Once you've completed the necessary pre-licensing education hours, you can start filling out the application for your insurance sales license. Ensure that you provide all the required information accurately and honestly, including disclosing any criminal record that may appear in a background check. Applications are typically submitted through the state's Department of Financial Services, Department of Insurance, or State Corporation Commission.
• Get Fingerprinted and Complete a Background Check: Due to the sensitive nature of the work, life insurance agents are required to undergo a background check and submit their fingerprints. You can schedule your fingerprinting appointment through the relevant state agency or department. The fingerprinting fee is usually paid by the applicant and ranges from $35 to $75.
• Pass the Licensing Exam: This is a crucial step in obtaining your license. The exam covers various topics, including state insurance regulations, general insurance concepts, specific policies related to life insurance, annuities, tax considerations, and more. The exam content may vary by state, so it's essential to review your state's exam content outline.
• Application Review and License Issuance: After completing all the above steps, your application will be reviewed, along with your background check. Once approved, you'll receive your life insurance sales agent license. You can then print your license and start applying for jobs in the field.

Additional Licenses:

If you plan to sell securities or variable-contract life insurance products, you'll need additional licenses through the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA). The Series 6, 63, and 7 licenses are common securities licenses sought by insurance agents looking to offer a wider range of life insurance products to their clients.

What does a life insurance agent do?

Life insurance agents are licensed professionals who sell life insurance policies. They can either work for a single insurance company and sell their policies, or they can work independently and sell policies from a range of companies.

A typical day for a life insurance agent involves pursuing potential clients by phone, mail, email, or social media, making presentations to clients or groups, and meeting with clients to discuss long-term goals and coverage options. They also have to do a lot of paperwork, process changes in beneficiary and policy loan applications, and update records. Additionally, they need to crunch numbers to help clients find the best products for their needs.

When a client contacts a life insurance agent, the agent will ask for personal details such as age, marital status, dependents, occupation, and income. They will also look at the client's financial situation, including expenses, savings, investments, and assets. Using this information, they will put together personalised advice and summarise their call, along with their recommendations. If the client purchases a policy through them, the agent will follow up every few years to ensure the insurance still meets the client's needs.

Life insurance agents are usually paid through commissions, which are a percentage of the premium. "Captive" agents, who work for a single company, may also receive a regular salary, which tends to be lower than that of independent agents.

How much money can a life insurance agent make?

Life insurance agents' earnings depend on several factors, including their location, experience, certifications, the types of policies they sell, and the number of policies they sell. Their income potential is uncapped, with some of the highest earners making well over six figures annually, while others work part-time to earn extra cash.

The average annual salary of life insurance agents ranges from $62,000 to $76,000, with the Bureau of Labor Statistics (BLS) estimating the yearly average to be almost $77,000 for all types of insurance agents. The average income of a life insurance agent can vary depending on their location, with the top-paying cities in the US being Birmingham, Alabama ($95,630); Saginaw, Michigan ($91,880); Des Moines, Iowa ($72,930); Jackson, Mississippi ($88,330); and Grand Island, Nebraska ($75,280).

Most life insurance agents' earnings come from commissions. For every policy sold, they earn a large upfront commission, ranging from 40% to 100% of the first-year premium, set by the insurance company and limited by each state. After the first year, agents receive additional commissions, usually under 5% of the annual premium, depending on the policy type, state, and company.

Independent agents, who sell policies for multiple insurance companies, earn only through commissions. In contrast, captive agents, who work for a single insurance company, may receive a base salary, commissions, and benefits. Captive agents who receive a base salary typically earn lower commission rates and may be incentivized to sell specific types of policies.

The income of life insurance agents also depends on their experience level. While some agents with established client bases and industry experience can close more sales and earn higher incomes, novices may struggle to find clients despite working long hours.

Life insurance agents face a high rejection rate, making it challenging to build a steady client base. They must be resilient and embrace rejection to succeed in this career.

Frequently asked questions