How to become and insurance agent
Updated: 6/22/22
“If you have persistence, you will come out ahead of most people. More importantly, you will learn. When you do something, you might fail. But that’s not because you’re a failure. It’s because you have not learnt enough,” says Jordan Belfort, the writer of the 2007 Memoir titled “The Wolf Of Wall Street.”
That was one of the most unforgettable quotes from the literature that was also adapted to a movie starring Leonardo DiCaprio. The movie tackles the lives of stockbrokers and also talks about the life of their partners, insurance agents.
The world of insurance selling can be overwhelming. When you think you would be able to find valuable satisfaction in life when you help protect the security and well-being of people dear to you, the career as an insurance agent is very fulfilling.
Unlike the eight-hour or even more office job, you get to choose your own time and set your own pace, as well as earn high with benefits from being an agent in the field of insurance. Among the first steps is to learn the responsibilities and preferences that agents must have.
Many articles talk about the basics and the obligations, but in our post, we give you the details that you may have not yet read about becoming a remarkable insurance agent. Here we go.
On your way to becoming the full-fledged insurance agent, among the things you will have to do is to decide which products you will sell. You may find various types of personal insurance and commercial insurance policies. There are Property and Casualty, Life/health insurance, and more. These fields are centered on covering families and individuals.
Agents who sell insurance policies of the commercial type provide coverage to business owners with their property insurance, general liability insurance, and other kinds of coverage.
Before you are able to offer or sell insurance products, you cannot call yourself an agent if you don’t have the license. As with every business owner or health worker, a license is required.
You must now take your insurance pre-license education courses specific to line of business you are planning to sell.
Most folks choose to take their insurance pre-license course online. These courses are created specifically to give you the skills you need to pass the test. The types of licenses you choose (also known as “lines of authority”) will determine which courses you take.
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After having fulfilled the requirements in the state you want to sell your products in, the official licensing examination will take place, yet this must be scheduled. For fairness and transparency, a third party company will proctor the exam. The applicant has to visit their testing site at the scheduled date and time, and it is possible to take the exam online.
You must have the training certification with you which the proctor may ask to see before you start taking the exam.
For many who have taken the exams, the process is never difficult especially if you have come in prepared with the pre-test requirements. Make sure you are at the scheduled time slot. Note that the test questionnaire is usually in multiple-choice. Like taking the driver’s license test, the applicant will immediately know if he or she passed. If you failed, no worries, you can have it rescheduled for retaking.
Insurance agents who operate without the license may face legal sanctions. The usual license includes casualty and property licenses for agents who want to offer their products to clients who are looking for insurance for their cars, businesses, and households.
The second type is insurance on life, health, and accidents. It provides them with funds they need for hospitalization, treating the condition, and so much more. Then, you will have to submit your licensing application and go through a background check before you qualify as a licensed insurance agent.
At 20 years old, you may be a target market of insurance companies. Nowadays, trends on product development are in, with products that include mutual funds, perfect for people at this age bracket. However, you may ask if you can become an insurance agent at this age too. Here is our take.
Definitely, you can sell insurance and this can well be your full-time work at 20 years old. Especially if you have a background in fields such as Accountancy, Business Administration, Marketing, Sales, Management, Economics, and the like, this will be among your career options.
Apparently, there are graduates of non-business studies for example, who want to apply to this job to provide for their family.
Yet, everyone who decides to take on this career track can learn a lot of things. You will learn sales skills, building connections with other people, reaching out to mentors, and closing deals. It will help you in your daily lives, too, such as leveraging on possibilities to help you move forward.
There are those who might say this quality of insurance may depend on the economic conditions and performance. However, you can sell life and health insurance anytime you want.
You can find several insurance companies, big and small, providing the product and where you can work for.
However, take note that there are limitations. While it can turn into your full-time work, many companies just offer commission-based programs, which mean that you earn when you are able to sell.
Unlike other eight-hour jobs that provide salary at consistent rates each month, insurance is likened to networking wherein, you cannot earn when you are not able to sell.
Definitely. Being an insurance agent is a job. Thus, like other types of work, it will provide you with a stable income.
To add more details, the United States Bureau of Labor Statistics showed that agents were making approximately $50,600 yearly in 2018. The pay may be drastic with the lowest 10 percent earning at less than $27,000 with the highest 10 percent earning $125,000 and above.
The dynamics of the earning of each insurance agent is that their annual wage depends on the company they are working for, and the kind of product they are selling. They are also known to earn based on the traditional salary-only system, the salary plus commission system, and the salary with bonus system.
The change is based on their commissions, if the system is with the salary. However, in today’s economy, the earning process is with commissions only. Let us learn more about this in the next part.
To answer this question, we go to the details. The insurance broker is able to earn money from commissions when they start selling insurance products to customers. The commission rate varies based on the product and, based on the regulations of the state.
Brokers may also sell various kinds of insurance, ranging from health insurance, P&C insurance, annuities,and life insurance. The basic system on how the broker commissions are based on the policies which are sold. The commissions come from a percentage coming from the amount of the yearly premium, as well as the policy it is being offered for.
The insurance premium is the money that the person or the business has for the policy. The insurance premiums are intended for policies covering cars, houses, life insurance premiums, and more.
Once the premium is earned, it will also be income for the insurance provider. However, there are also liabilities such as providing coverage for claims conducted against policies. There are also insurers aspiring insurance agents may learn about that utilize premiums to cover liabilities connected with the underwritten policies.
Aside from this, they may also choose to invest in the premium for higher yields, as they offset a fraction of the cost of providing the coverage, helping the insurance keep the pricing at competitive levels. Not only this, insurers must invest their premiums in assets with various returns and liquidities.
However, they are expected to maintain certain ranges from the liquidity. The regulators from the state insurance must set the amount of liquid assets required to make sure insurers can be able to pay their claims.
Furthermore, brokers must be able to represent according to the best interests of the clients. It has been part of their duty to perfectly understand the situation, requirements, and needs to find them the best insurance policy that fits their budget. Going from the perspective of the clients, the plan is a little complicated and studies have shown several people are ending up selecting the plan that may not suit them. Thus, the agent should have the responsibility to protect the clients and answer should there be changes.
To stay updated on changes in the rules and so they ensure they continue to meet their responsibilities, state insurance regulatory agencies must license the brokers, and have them renewed biannually in many states. The job of the brokers shall start after completing the policy’s sale. Regular meet-up with clients to determine current policies and that they meet the needs of the clients is a must.
A lot of today’s insurance agents may want to enter on the scene without the experience relevant to selling insurance. Is it possible to get a job in insurance with no previous experience?
Best way to do this is by joining an established insurance agency.
The insurance industry is among the easiest to get into when you are looking for full-time work. If you want to get into insurance without the experience, you shall first look into the insurance you are interested with. You have learned about the major types in the earlier discussion.
Before deciding on getting in, take part in conversations with people who are in the industry. If you have a company that interests you, reach out to their agents to talk about what it is like to be part of their team. Of course, being the agent is so much different from being the client. You can approach the insurance agent directly.
A lot of agencies/companies may also be lenient on the license. They may sponsor your license, and will give the time to work on this.
Once you are able to get license and become an insurance agent you may want to start your own agency. But in order to sell insurance product, you will have to be appointed by insurance carrier to sell their product. We have created a detailed guide on this topic and you can find it at the below mentioned link.
Pro Tips for getting insurance Carrier Appointment for a new agency
Lo and behold, you may encounter that how to become an insurance agent involves the following steps:
However, there is more to it than just these steps. The heart of a good insurance agent lies in the spirit and penchant for charity, or helping other people secure their future. This is the centerpiece of what insurance is about.
There are service providers online who can offer the training and the certification. Consider the delivery method, cost, and length when you are ready to get into the training. Insurance industries are also great areas to build relationships and networks.
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References:
https://www.investopedia.com/financial-edge/1212/8-qualities-that-make-a-good-insurance-agent.aspx
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