Activating Life Insurance Agents: Strategies For Success And Growth

Life insurance agents have a challenging job, with a high burnout rate and a lot of rejection. However, it can also be a rewarding career, with high earning potential and flexible work hours. To become a life insurance agent, you'll need to meet certain eligibility criteria, complete pre-licensing education, pass a licensing exam, and apply for your license. This process can vary slightly depending on your location, so it's important to research the specific requirements in your area. Once you have your license, you can start selling insurance policies and building your client base. It's important to have a strong mindset and be able to handle rejection, as the job can be competitive and challenging.

The pros and cons of being a life insurance agent

Pros

• Lucrative: Life insurance agents can make a lot of money, with the opportunity to earn high commissions.
• Flexible: You can work for yourself or someone else, and have the option to work remotely and set your own hours.
• Rewarding: You get to help families secure their financial future, which can be incredibly rewarding.
• Diverse opportunities: The life insurance sector offers a range of career paths beyond sales, including marketing, advertising, and information technology.
• Easy to enter: There are minimal barriers to entry, with most roles requiring only a high school diploma and some states having easy licensing requirements.

Cons

• Demanding: The industry can be very demanding, with a high burnout rate due to the need for constant hustling, networking, and dealing with rejection.
• Stressful: The highly competitive work environment can be stressful, with agents under pressure to meet targets and quotas.
• Difficult to find leads: It can be challenging to find customer leads, and even if leads are provided, they may have already been contacted by several other agents.
• Monotonous: Some positions come with repetitive tasks and limited upward mobility.
• May need to sell to friends and family: Many companies expect their agents to market to their friends and family, which can be uncomfortable and damaging to personal relationships.

How to get licensed to sell life insurance

To sell life insurance, you must be licensed by your state's insurance regulation department. Here is a step-by-step guide on how to get licensed to sell life insurance:

Step 1: Meet Basic Eligibility Requirements

These vary depending on the state but typically include:

• Being at least 18 years old
• Being free of any fraud or felony charges
• Not owing any federal or state income taxes
• Being able to pass a background check

Step 2: Complete Pre-Licensing Coursework

Complete a pre-licensing course to prepare for your state licensure examinations. This is mandatory in some states but encouraged in all. Courses can be taken online or in a classroom and cover topics such as insurance industry regulations and insurance principles. The required hours vary by state, ranging from 20 to 40 hours.

Step 3: Pass the State Insurance Licensure Exam

Once you've completed your pre-licensing coursework, you'll need to pass the relevant state insurance exam. The Life, Accident, & Health (LA&H) test is the exam you'll need to pass to get a life insurance license. The exam can have between 50 and 200 items and must be completed in two to three hours. The passing score is typically 70%.

Step 4: Apply for Your Life Insurance License

After passing the exam, you can apply for your life insurance license by submitting your license application to your state's department of insurance regulation. You'll need to pay a licensing fee, which varies between states. The insurance regulation department will review your application, and there is no set timeframe for this process.

Step 5: Get Fingerprinted and Complete a Background Check

Most states require fingerprinting and a background check before granting a life insurance agent license. This process typically costs between $25 and $75.

Step 6: Print Your License

Once your application has been approved, you can log in to your state's online portal to print your license. Make sure to save a copy of your license somewhere accessible.

The types of insurance agent

There are two main types of insurance agent: captive agents and independent agents.

Captive agents, also known as direct writers, represent a single insurance company and sell policies from that company only. They are usually employed full-time by an insurance agency and receive a fixed salary, variables, and benefits. They can also work as independent contractors. Captive agents have in-depth knowledge of their partner insurer's products and guidelines and often receive ongoing training from their parent company. They also receive referrals and leads on potential buyers from their partner insurers. Some of the top brands that work exclusively with captive agents include State Farm, Allstate, and Berkshire Hathway's GEICO.

Independent agents, on the other hand, manage their own business and represent multiple insurance companies. This allows them to offer customers a wider range of policies by combining policies from several different providers. They are responsible for finding their own leads and running their own operations, including business costs such as rent, office supplies, and marketing expenses. Some insurance companies that partner with independent agents include Farmers, Liberty Mutual, Nationwide, and Progressive.

Other Types of Insurance Professionals

In addition to captive and independent agents, there are also insurance brokers and internal insurance sales agents.

Insurance brokers represent the customer instead of the insurance provider and are required by law to act in their clients' best interests. They may combine policies from multiple providers and negotiate prices. They typically charge a fee for their services.

Internal insurance sales agents, on the other hand, are appointed to work full-time with a life insurance company and become their representative to sell their insurance products. They are responsible for capturing new and old clients so they don't switch to competitors.

How to be a successful life insurance agent

To be a successful life insurance agent, you need to develop a certain set of skills and qualities. Here are some tips to help you become a top-performing life insurance agent:

Put the Client's Needs First:

Listen carefully to your clients and prospects to earn their trust. Being willing to put them in a product that pays a lower commission but better fits their needs will make you more likely to retain customers.

Provide Good Customer Service:

Be available and responsive to your clients' inquiries and phone calls. Many people who buy life insurance policies complain about the lack of support after purchasing the policy. By being there for your clients when they need you, you can stand out and keep them happy.

Develop Emotional Intelligence:

Emotional intelligence is the ability to listen and empathize with your clients to truly understand their wants and needs. A good agent knows how to tactfully help a client see financial reality clearly, even when they are resistant.

Maintain a High Energy Level:

Always appear excited and eager. A worn-down or dreary disposition will rub off on your clients and discourage them from buying.

Be Persistent:

Handling rejection is a crucial part of being a successful insurance agent. Understand that each "no" brings you closer to a "yes," and approach each rejection with a smile.

Be Honest:

Using deception to close deals will not earn you the respect and trust of your clients and may even land you in legal trouble. Telling the truth upfront will lead to repeat business and long-term success.

Offer a Wide Array of Products:

Understand your clients' diverse needs and be able to offer them a comprehensive selection of products and services to meet those needs.

Develop Technical Know-How:

Go beyond just selling policies. Understand the tax and legal aspects of the products you sell, and know how they fit into your clients' overall financial situation. Consider earning financial planning designations to enhance your expertise.

Build Relationships:

Focus on building solid relationships with your clients. This will help you better understand their unique needs and find innovative solutions. Remember, selling insurance is about selling trust and yourself, so make sure you dress professionally and enthusiastically represent your company.

Be Passionate About Helping Others:

A career as a life insurance agent should be built on a genuine desire to help people. Caring about your clients and their families will make you a more effective agent and make your job more rewarding.

Find a Mentor:

The life insurance industry is highly competitive, and finding a mentor who can guide you and provide you with proven strategies for success can be invaluable.

How to get a job as a life insurance agent

Life insurance agents sell life insurance policies to people in their community, helping them provide financial support for their families after their passing. It is a career that can be rewarding, but also comes with challenges. The job market is highly competitive, and the burnout rate is high, with more than 90% of new agents quitting within the first year.

If you are interested in becoming a life insurance agent, here are the steps you need to take:

Educational Requirements:

You need a high school diploma or GED to become a life insurance agent. While a college degree is not required, some companies may prefer candidates with a bachelor's degree in a related field like business or marketing. Taking classes in business concepts, marketing, communications, and math can also be helpful in preparing you for this career.

Research Licensing Requirements:

Licensing requirements vary depending on your location. In most states, you will need to complete pre-licensing education and pass a licensing exam. The pre-licensing education covers topics such as insurance industry regulations, different types of insurance policies, and insurance principles. The licensing exam will test your knowledge on state rules and regulations, insurance applications, policy riders, taxes, and more.

Complete Licensing Requirements:

Sign up for the pre-licensing education courses, which can be taken online or in a classroom setting. The required number of hours varies by state and the type of insurance you want to sell. For example, life insurance typically requires 20 credit hours, while property and casualty insurance requires 90 credit hours. You may also need to complete a background check and fingerprinting, depending on your state's requirements.

Pass the Licensing Exam:

The licensing exam will test your knowledge of state rules and regulations, insurance applications, policy riders and exclusions, taxes, retirement, and types of policies. The exam typically consists of 50-200 questions and needs to be completed within 2-3 hours. Passing scores vary by state, but generally, you need to get at least 70% of the answers correct.

Apply for your License:

Once you have passed the exam, submit your license application, along with the application fee, to your state's insurance regulation department. You will also need to submit your exam results and, in some cases, electronic fingerprints for the background check. The review process can take a few weeks, and your license will be valid for two years.

Consider Additional Licenses:

If you plan to sell insurance in multiple states or offer various types of insurance, you will need additional licenses. Each state has its own licensing requirements, and selling different types of insurance may require separate licenses. Additionally, if you sell variable-contract life insurance products or securities, you will need to be licensed by the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA).

Find a Job:

Start your job search by visiting insurance company rating websites like AM Best, Moody's, or Standard & Poor's to identify companies with strong ratings. Look for companies with ratings of "A" or higher in your state, as these companies tend to offer secure products, reasonable prices, and a focus on agent compensation and retention. When applying, make sure to highlight your entrepreneurial spirit and any experience that demonstrates your ability to take initiative.

Be Prepared for the Challenges:

The life of a life insurance agent can be grueling, with constant hustling, networking, and rejection. Most agents are paid on commission, so finding potential customers and making sales can be difficult. You will need a strong background in sales and a resilient mindset to succeed in this career.

Frequently asked questions