Becoming An Insurance Salesman: Tips For Success

Becoming an insurance salesman can be a lucrative career choice, with a median income of $49,840, according to the Bureau of Labor Statistics. The process to become an insurance salesman typically involves a few key steps: deciding on the type of insurance agent and products, completing pre-licensing education and exams, registering with a state, and finding clients. While a college degree is not required, a high school diploma or GED is necessary, along with strong sales and marketing skills.

Decide on the type of insurance you want to sell

When it comes to deciding on the type of insurance you want to sell, there are a few different options to consider. The first thing to know is that insurance agents often specialize in a particular type of insurance. Here are some of the most common types of insurance that agents sell:

Health Insurance

Health insurance agents sell policies that cover an individual's medical expenses. They may also help clients find long-term disability insurance and coverage for assisted living care.

Car Insurance

Car insurance agents work with customers to establish policies that cover vehicle damage and replacements.

Travel Insurance

Travel insurance agents sell policies that protect travelers' belongings in the event of damage, loss, or theft.

Life Insurance

Life insurance agents sell policies that pay a beneficiary when the policyholder dies. Life insurance agents also sell annuities that provide a retirement income. This type of insurance tends to be the most lucrative for agents, as it is difficult to sell and prospective customers can be hard to find. As a result, life insurance agents often receive a high rate of commission—between 30% and 90% of the amount paid for a policy in the first year, and 3% to 10% in subsequent years.

Property and Casualty Insurance

Property insurance agents help customers protect their property, including homes, vehicles, and other valuables. Casualty insurance specialists offer clients liability coverage against financial losses related to accidents involving their property. This includes auto, homeowner's, and renter's insurance. Property and casualty insurance are usually combined into one general area of expertise.

In addition to deciding on the type of insurance you want to sell, you'll also need to choose between becoming a captive agent or an independent agent.

Captive Agent

Captive agents work exclusively for one insurance company and can only sell the policies provided by that company. They benefit from brand recognition and streamlined processes but may face challenges if the company's rates are not competitive.

Independent Agent

Independent agents, also known as brokers, work with multiple insurance companies and can offer clients a range of options from different providers. They represent the client, not the insurance carrier, and have greater flexibility. However, they often have limited resources and receive less training and support from insurance carriers.

Understand the general requirements

To become an insurance agent, you must meet several general requirements. These include:

• Age: You need to be at least 18 years old to become an insurance agent.
• Education: While a college degree is not necessary, a high school diploma or GED is typically required. Some employers may prefer candidates with a degree in business or management, as this can provide a good foundation in marketing, economics, and finance. Additionally, pre-licensing education is mandatory in most states. These courses can be taken online or in-person and typically cover insurance ethics, different types of insurance policies, and state-specific laws pertaining to the insurance industry. The duration of these courses varies, ranging from a day to several weeks, with around 20 to 40 hours of training.
• Licensing: Obtaining a license is a crucial step in becoming an insurance agent. Each state has its own licensing requirements, and you must obtain a license for each type of insurance you plan to sell. For example, a Property & Casualty (P&C) license is needed to sell auto and homeowners insurance, while a Life & Health (L&H) license is required for selling life insurance, annuities, and health insurance. To obtain a license, you must pass a state insurance licensing exam, which covers both general insurance knowledge and state-specific regulations. These exams are typically challenging and consist of multiple-choice questions.
• Background check: As part of the licensing process, most states require insurance agents to undergo a background check, which may include fingerprinting.
• Continuing education: To maintain your license, you must stay up to date with periodic continuing education requirements. These requirements vary by state and help you refresh your knowledge and stay informed about new laws and developments in the insurance industry.

It is important to note that the specific requirements may differ depending on the state in which you plan to practice and the type of insurance you intend to sell. Therefore, it is advisable to review the requirements outlined by your state's department of insurance or the company you plan to represent.

Pick a state and find out its requirements

Each state in the US has different requirements for becoming a licensed insurance agent, so it's important to research the specific rules for your chosen state. Here's an overview of the requirements and process for four common states: Florida, California, Texas, and New York.

Florida

Florida offers various insurance licenses, including those related to property and casualty, health and life insurance, and general lines (temporary). The state's website provides information on the common use of each license, the associated Florida Statutes, the steps for becoming licensed, and any necessary continuing education.

California

In California, you'll need to complete a prelicensing course with a minimum number of study hours, which varies depending on the license. For example, the Life and Accident and Health license requires 52 hours of prelicensing study. After passing the prelicensing course, you must pass the state's licensing exam for each insurance line you wish to obtain a license in. Next, you'll need to get fingerprinted, and finally, apply for the license through the California insurance licensing site.

Texas

Texas offers several common licenses, including General Lines – life, accident, and health; General Lines – property and casualty; and All Lines Adjuster. To obtain a license, you'll typically need to pass an exam. Texas also provides the option of obtaining a temporary license if you haven't passed the exam yet, as long as you have a sponsor who already has an insurance license.

New York

In New York, all insurance agents and brokers must obtain a license from the state's Department of Financial Services (DFS). To be eligible, you must be at least 18 years old and able to pass a background check. You must also meet certain character requirements, such as being free of any fraud or felony charges and not owing any federal or state income taxes. Before obtaining your license, you'll need to complete a pre-licensing course and pass the New York insurance licensure exam. The exam covers Life, Accident, & Health (LA&H) and Property & Casualty (P&C), and you must pass the relevant sections based on your desired specialisation. After passing the exam, you can apply for your license through the DFS website.

Research agencies

Once you have decided on the type of insurance you want to sell, the next step is to research agencies that offer those services and that you would like to work for. Many agencies have additional requirements for candidates or agents that you will need to be aware of. Some agencies will hire you before you have a license, but they might have specific processes you need to follow.

For example, Rentguard offers two types of partnerships: a full agency or an introducer. If you are a business authorised and regulated by the Financial Conduct Authority (FCA), you can set up a full agency with them by signing an Agency Agreement. If you are an estate or letting agent, property management company, independent financial advisor, mortgage or insurance broker, pensions advisor, or legal professional, you can be welcomed as an introducer.

Another example is Independent Insurance Agents and Brokers of America, Inc., a national association for insurance agents. There are also many state associations for insurance agents, and these groups can be good sources of information on becoming an insurance agent in your state. State associations also typically offer pre-licensing training courses for agents.

Pass your state exam and apply

Once you've passed your state exam, you'll need to apply for your license. In the US, you'll need to submit an application to the Financial Conduct Authority (FCA), providing proof of your qualifications, experience, and training. You'll also need to meet the registration qualification for your specialty and location.

With your license in hand, it's time to create your resume. List your skills, qualifications, experience, and certification. Read the job description, pick out keywords, and add them to your resume. This will make your resume applicant tracking system (ATS) compliant. Then, tailor your resume for each job you apply to, and upload it to various job portals.

When applying for jobs, consider working for either a single insurance company or an insurance brokerage firm. Captive agents work for a single insurance company and sell only that company's policies. They receive support from the insurance company, such as an office to work from and administrative support. They also receive direct leads through the insurance company and typically earn a commission on sales, sometimes with an additional salary.

Independent agents, on the other hand, work with multiple insurance companies and can offer a wider range of policies. However, they must handle administrative work themselves or hire their own support team. They are also responsible for finding their own leads and marketing their business. Independent agents typically earn a higher commission percentage but must cover their own expenses.

Some common types of insurance agents include:

• Life insurance agents: These agents sell life insurance policies and help individuals and families assess their financial needs.
• Health insurance agents: Specializing in the sale of health insurance policies, these agents assist clients in understanding their options and navigating the complexities of healthcare.
• Property and casualty insurance agents: These agents sell insurance policies that cover property and protect against liability for damage or injury to others.

Remember, your career path as an insurance agent is customizable and flexible. You can work full-time or part-time, and even work remotely through phone and online communications for many tasks.

Frequently asked questions