Jane Dotson
Life insurance and health insurance are two distinct types of insurance that serve different purposes and offer different coverage. Life insurance provides financial security for loved ones in the event of an individual's premature death, while health insurance covers medical expenses and helps individuals maintain their health. While both types of insurance are important, particularly for those with dependents, the decision to sell life or health insurance as an agent can be challenging. Life insurance agents face the difficulty of selling a product that reminds people of their mortality, while health insurance agents may encounter resistance due to the cost of premiums. Ultimately, the choice between selling life or health insurance depends on various factors, including personal preferences, market demand, and the potential for building long-lasting relationships with clients.
Characteristics of Selling Life and Health Insurance
| Characteristics | Values |
|---|---|
| Difficulty | Life insurance is harder to sell as it deals with the topic of death, which people are reluctant to discuss. |
| Income | Life insurance offers higher commission percentages than health insurance, and agents get paid commission renewals for as long as the policy is in force. |
| Job Prospects | Life insurance sales jobs are abundant and easy to find. |
| Qualifications | Life insurance sales require dozens of hours of study, instruction, and an exam. |
| Career Prospects | Most life insurance agents do not last a year in the business, and even fewer make it to five years. |
| Customer Relationship | Life insurance sales depend on developing good relationships with potential clients. |
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What You'll Learn
Life insurance is a tough sell
Life insurance sales jobs are abundant and easy to find, and there is a high demand for agents, as major insurers have seen their workforces shrink in recent years. However, most life insurance agents do not last long in the business, with some industry analysts reporting burnout within a year. The job requires thick skin, as agents are selling the same products and often face rejection. It can be challenging to make enough money to support oneself, especially at the beginning, as insurance sales typically do not pay very well initially. Life insurance agents are usually paid on commission, and if they do not make any sales, they do not get paid.
To succeed in selling life insurance, one must combine flawless ethics with real-world education and persistence. It is essential to meet state pre-licensing education requirements, pass a licensing exam, and obtain a license and a National Producer Number from the National Association of Insurance Commissioners. Developing customer service skills and learning how to interact with customers effectively are also crucial for success. While it can be challenging to sell life insurance, those who persevere can be rewarded with high commission percentages and renewal commissions for as long as the policy is in force, creating a passive income stream.
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High commission percentages
If you're considering a career in insurance sales, it's worth noting that insurance agents typically work on commission rather than a fixed salary. This means that the more policies you sell, the more you earn. Life insurance, in particular, offers higher commission percentages compared to other types of insurance, such as health insurance.
Selling life insurance has its challenges. It can be emotionally difficult because it forces people to confront their mortality, and it lacks the instant gratification that can drive impulse purchases. As a result, many life insurance agents burn out within a year, and even fewer make it to the five-year mark. However, those who persevere can reap the benefits of high renewal commissions. Building strong relationships with clients is key to success in this field, as it leads to more sales and referrals.
While health insurance may not offer the same high commission percentages as life insurance, it is still a viable option for insurance agents. Health insurance is often partially subsidized by employers, making it more accessible to customers. Additionally, health complications tend to increase with age, making it a necessary expense for many.
When deciding between selling life or health insurance, it's important to consider your own skills and interests. Selling life insurance may require more sensitivity and relationship-building skills due to the nature of the product. In contrast, selling health insurance could involve more technical knowledge about medical expenses and coverage options.
Ultimately, both life and health insurance are essential forms of protection for individuals and families. As an insurance agent, understanding your clients' needs and offering tailored solutions will be crucial to your success, regardless of the specific type of insurance you sell.
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Health insurance is easier to sell
Selling health insurance also provides more opportunities to build relationships with clients. It is a product that individuals are more likely to purchase multiple times, especially if they have a family or as their medical needs change over time. This allows insurance agents to establish long-term relationships and potentially upsell or cross-sell other insurance products. Health insurance is also more accessible to a broader range of customers, as it is often partially subsidized by employers, making it a more affordable option for many.
Additionally, health insurance sales jobs are more abundant and easier to find. Major insurers are actively hiring, and health insurance agents can work in various settings, including larger brokerage firms, individual insurance carriers, or even as self-employed individuals. Health insurance sales may also offer a base salary in addition to commissions, providing a more stable income stream for agents, especially when starting.
Furthermore, health insurance is a more straightforward product to sell. It covers tangible expenses that people can easily understand, such as hospital stays or medications. In contrast, life insurance is a more complex product, and it can be challenging to communicate its benefits effectively. Life insurance is often seen as a less urgent purchase, and it does not provide the same level of instant gratification as other significant purchases, such as a new car or cellphone.
While both types of insurance are essential, health insurance is generally easier to sell due to its broader appeal, the immediate benefits it offers, and the potential for building long-term client relationships.
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Life insurance sales jobs are abundant
There are several reasons for the high attrition rate in this line of work. First, it's a challenging product to sell. People are reluctant to discuss or even acknowledge their mortality, and life insurance, unlike a new car or cellphone, offers none of the instant gratification that leads to impulse purchases. Second, the job is typically commission-based, and agents who don't make sales don't get paid. While commission percentages are high compared to other insurance sales, and life insurance agents receive renewal commissions for as long as a sold policy is in force, creating a passive income stream, it's still hard for many agents to make enough money to support themselves. Third, it takes a certain kind of person to succeed in this field. Agents need to be able to handle rejection and develop good relationships with clients.
That said, there are some advantages to selling life insurance. It's a job seeker's market, and companies are hiring. The longer you stick with it, the more income you can make, thanks to referrals and residuals. And, while it may be challenging to get started, there are abundant opportunities for entrepreneurship and career advancement for those who persevere.
If you're interested in pursuing a career in life insurance sales, there are a few things you should know. First, you'll need to meet your state's pre-licensing education requirements, pass a licensing exam, and obtain a license and a National Producer Number from the National Association of Insurance Commissioners. Second, it's important to develop good customer service skills, as the ability to build relationships with potential clients is key to success in this field. Finally, be prepared for a challenging but potentially rewarding career.
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$15.53
It's a job seeker's market
If you're considering a career in insurance sales, it's worth knowing that it's a job seeker's market. Major insurers have seen their workforces shrink since the late 20th century, but they're still hiring. While the internet has reduced the number of agents, it has also created a demand for specialization. So, regardless of your previous line of work, you stand a good chance of being considered for a role in insurance sales.
That said, selling life insurance is tough. It's a challenging way to make a living and an even more difficult way to build a long-lasting career. Most agents don't last a year, and only a few make it to five. This is because life insurance is a difficult product to sell. People are reluctant to discuss or even consider their mortality, and life insurance doesn't offer the instant gratification that can lead to impulse purchases. It's also hard for agents to make enough money to support themselves, as insurance sales don't typically pay very well at the outset. However, if you can stick with it, the income potential increases over time thanks to referrals and residuals.
If you're thinking of selling health insurance, be aware that it's usually sold as part of a package that includes life insurance. While health insurance is generally easier to sell, as people are more willing to discuss their health than their death, the commission percentages are lower than for life insurance. Health insurance is also more likely to be subsidized by an employer, which can make it harder to sell on the individual market.
Whether you're selling life or health insurance, you'll need to meet your state's pre-licensing education requirements, pass a licensing exam, and obtain a license and a National Producer Number from the National Association of Insurance Commissioners. You'll also need to be able to handle rejection and develop good relationships with potential clients. If you can persevere, you'll be rewarded with renewal commissions, which can create a passive income stream.
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Frequently asked questions
Life insurance pays out a lump sum to beneficiaries in the case of premature death, while health insurance covers medical expenses and doctor's visits.
Health insurance is generally easier to sell as people are more reluctant to discuss or acknowledge their mortality when considering life insurance.
Life insurance agents tend to earn higher commission percentages compared to other insurance sales. They also get paid commission renewals for as long as the policy is in force, creating a passive income stream.
Both types of insurance are always in demand, but life insurance sales jobs are more abundant and easier to find. However, most life insurance agents do not last long in the business.
Both types of insurance are important, especially if you have dependents. If you can only afford one, consider your age and health—the older you are, the more important health insurance becomes.
