Best Side Hustle idea in 2023 : Become an Insurance Agent

Best Side Hustle idea

Update: 11/13/2022

“Side Hustle: A side hustle is an entrepreneurial activity outside of your normal day job that generates extra income so that you can reach your financial goals faster.”

Are you looking for a Side Hustle or part time business idea?

Here is something which no one talks about and is probably one of the best side hustle ideas out there. I am talking about becoming an insurance agent.

What makes a good side hustle?

Ideally, a side hustle should be scalable, flexible from a time perspective, and high paying. Becoming an insurance agent checks all boxes.

There are many agents who work part time or started as part time agents and then transitioned to full time. Your earning potential is based on insurance policies. It is not dependent on the number of hours you work. Also, there is a very low startup cost which makes this as a lucrative side hustle.

In fact i’ll argue that the best way to get into an insurance agency business is by working part time initially.

Also by working as a side hustle you can start gaining experience in the insurance industry and figure out if it is right for you or not. By selling a few policies a month you can start building a book of business will help you in building a long term business.

How to become an insurance agent? Ultimate guide

Selling Life insurance part time or as a Side Hustle

Life insurance pays probably the highest commission up front but there is almost no recurring revenue.

In most cases your commission may be in the range of 80-120% of the total first year premium. Hence for example, if you sold a million-dollar life insurance policy that has a premium of $1500 per year then you may make around $1500 as commission.

If your average commission is $1500 per policy then

Selling 1 policy per month = $18,000 per year

Selling 2 policy per month = $36,000 per year

Selling 5 policy per month = $90,000 per year

Selling 10 policy per month = $180,000 per year

Not bad ,right?

Selling Property and Casualty insurance part time or as a Side Hustle

Property and Casualty insurance (also called P&C insurance )refers to car insurance, home insurance, liability insurance and other types of non -life/health insurance.

In P&C insurance the initial premium maynot be as high as Life insurance but you get recurring commission each time the policy is renewed.Hence if you are doing a good job as an agent and are able to retain your customer then you get paid almost the same amount every year. Successful agencies have 90% + retention rate.

Generally an agent gets paid 8%-15% of premium for each P&C insurance policy issued.

If you sold a $2000 annual premium Car insurance policy then you get paid $200 on 10% commission structure.

In above example

On 10 policies you get a recurring annual commission of $2000

On 50 policies you get a recurring annual commission of $20,000

On 500 policies you get a recurring annual commission of $100,000

On 1000 policies you get a recurring annual commission of $200,000

That’s why you see agents who are in business for some time making huge amounts of money in recurring revenue.

So if you start building your book of business today then over a period of time you can be making this kind of money.

How do I start a side hustle in Insurance Agency space?

Based on line of business, you’ll need to get licensed. Getting licensed when you are working part time is not a bad idea as it may take a few weeks to months.

Once you are licensed and registered as an insurance agent you need to get appointed by an Insurance carrier to sell their product. This step is not easy and may take some time. You can check out our article “Pro Tips for getting insurance Carrier Appointment for a new agency” to learn more about this process.

After you are appointed by an insurance carrier you are good to go.

Pro Tips for getting insurance Carrier Appointment for a new agency

In order to grow your insurance agency, you need to find a sustainable way to generate leads and get new clients.

Many agents start by marketing to their close contacts and then getting referrals to grow their business.

We have shared a lot of the latest marketing strategies in our blog which you can use to grow and scale up your agency.

Why starting an Insurance Agency/Brokerage is one of the best business idea?

Scalable

The population of USA is more than 325 million and everyone needs multiple types of insurance. Also, insurance is a trillion dollar market so the sky is limit in terms of what you can achieve.

Limited Downside

As an insurance agent, you are selling a product which is created by an insurance carrier and they carry the risk of paying out claims. Your job is to connect customers with the right insurance company and you get paid a certain commission. You don’t carry any inventory or risk of catastrophic loss or any other downside.

Barrier to entry

In most of the other side hustle, people can start in a few days. For example every Tom,Dick and Harry claims to be an expert in running facebook ads but more than 90% of them have no idea what they are doing.

Becoming an insurance agent takes some time in terms of licensing and appointment hence you have some barrier for new competition to enter this industry. This process of getting licensed helps you in becoming qualified to help your customers.

Financially rewarding

As discussed earlier becoming an insurance agent is pretty rewarding from a financial perspective. People have created generational wealth by running a successful insurance agency. You can start as a part time insurance agent and build a billion dollar company.

New opportunities

Marketing has changed a lot in the last 10years and it is evolving at a rapid pace. There are many new opportunities coming up to engage with the audience and generate new business.

What do you think?

Please leave a comment and let us know your thoughts on this article. Also, please subscribe to our mailing list to learn how you can get started as an Insurance agent .