A guide to getting your life insurance license. There are only five simple procedures to do to earn your life insurance license. In a lawful and sufficient manner, these five stages will lead you. You will find some very helpful details on this subject in the following article.
You might find fulfillment in your work as a life insurance agent if you enjoy serving others and think it would bring you joy to ensure the safety and security of the general public. There are a number of benefits to this line of employment, including low barriers to entry, workplace flexibility, and high potential profits over the course of a career.
Understanding the basic tasks, qualifications, and training required for life insurance agents is a fantastic starting place if you consider a professional career. So, with hard work and perseverance, you can join the ranks of the prosperous life insurance brokers in your neighborhood.
What is a life insurance agent?
A life insurance agent is a type of insurance professional who sells life insurance specifically. Life insurance agents may sell other types of insurance if they have the appropriate license, or they may focus only on life insurance. A life insurance may work for an insurance agency or on their own, sometimes under the name of an insurance company but as the owner of their own business. Often, life insurance agents are paid in commission to give them incentive to sell more insurance policies.
What does a life insurance agent do?
Specialists in the field of selling insurance, life insurance agents focus on one particular line of work. A licensed life insurance agent may also sell health, auto, home, and/or boat insurance, although that is not required. A life insurance agent may operate for an insurance brokerage or on their own, sometimes operating under the umbrella of an established insurance brand. Agents for life insurance companies typically get commission-based compensation.
Do You Need a License to Sell Life Insurance?
You probably already knew this, but becoming a life insurance agent does require meeting some standards. To start off, though, in most states you need to be 18 or older and have a high school diploma. In addition, you will need to do well on the associated licensing exam.
Not all states mandate licensing for insurance agents, but if you want to sell life insurance, you’ll need one. To become a licensed life insurance agent, one only needs to pass a background check, training course, and exam.
As part of the hiring process, certain companies may also help you get your license. It is important to find out from a potential employer the time commitment required before they will pay for your license materials and exam.
It’s important to evaluate potential employees because every company has its own rules and requirements when it comes to hiring.
The Pros of Becoming a Life Insurance Agent
It’s possible that some of the perks of working as a life insurance agent will come as a pleasant surprise if you’re just beginning your investigation into the field.
The sale of life insurance is a stable industry. Life insurance is constantly in demand because of the peace of mind it can provide for families, and insurance companies are always eager to add enthusiastic, self-starters to their sales teams.
Opportunities for professional growth exist within the industry. Typically, a junior agent’s earning potential and level of responsibility increase in tandem with their level of experience in the field.
Can you ever find yourself wondering, “How do I become a life insurance agent?” I’ll list a few benefits that are uncommon in other fields:
- One can enter the field with little difficulty.
In the first place, learning the steps to becoming a life insurance agent is straightforward. To apply, all you need is a high school graduation; further education is not required. Some states require you to take a simple licensing exam and finish a short course before you may practice.
- Numerous employment opportunities exist.
Second, the market for life insurance is large. Since most businesses pay commissions with no guarantee of income, they have no incentive to limit recruiting. The company hires anyone interested in selling life insurance in the hopes that a small fraction of those hired will actually be effective at their jobs. Most businesses will reimburse you for the cost of your license after you’ve sold a specific amount of premium.
- In this context, there is no upper limit to how much money you can make.
When compared to other types of insurance, life insurance commissions are the highest. Commission on a car insurance policy typically ranges from 10 percent to 15 percent of the first year’s premium.
Some life insurance companies will pay a salesperson six to twelve months’ worth of commission on a policy sold in advance, rather than making them wait to collect the money when it is earned.
- You may make passive money quickly and easily.
Most importantly, becoming a life insurance agent is the simplest path to a financially stable future. If you’re a successful life insurance salesperson, you don’t only make money when you sell a policy; you keep making money for as long as the policy is in force through renewal commissions.
If a person buys life insurance at age 30 and survives until age 80, you will earn commissions for the next 50 years. A policy’s commission rate reduces after the first year, but you can still make 5% to 10% annually as long as the client keeps paying the monthly premium.
Brokers who have worked in the life insurance sector for several decades can sometimes get by on renewal commissions alone, rather than having to sell any new policies.
The Cons of Becoming a Life Insurance Agent
In comparison to other products and services, life insurance is notoriously hard to sell. In fact, there is no payoff or benefit until after the client has passed away, making it unique among services.
Among these shortcomings, there are a couple that stand out as particularly important:
- People can be difficult to get along with at times.
One of the drawbacks of being an insurance agent is having to deal with a lot of difficult individuals, in addition to having to generate a sense of urgency on a product that only pays off after the client’s death.
Some customers are easy to please, but others can be quite demanding; still, you should always strive to treat everyone with respect.
- A degree from an accredited university may be required by certain insurance providers.
Some insurance businesses do not require a college diploma, while others ask for a bachelor’s degree.
How Long Does It Take To Become a Life Insurance Agent?
While a bachelor’s degree may be preferred by some insurance companies, others do not.
- The first step in becoming a life insurance agent is to complete a course and pass a test, which can take anywhere from three weeks to six weeks.
- It may take you up to two weeks to get work as an insurance agent, so plan accordingly (either before or after you undergo the course.)
- The process of obtaining a FINRA license (necessary in order to sell life insurance contracts linked to commodities on the stock market) might take anywhere from one to two months.
How To Become A Licensed Life Insurance Agent; Five Easy Steps
Life insurance sales can be competitive, but they can pay well in the current economic climate. The dealer may feel a sense of personal satisfaction after delivering a payment to a family that has recently had a death in the family.
With the right education, experience, and dogged persistence, you may become a life insurance agent and enjoy this reward. Now you know the five requirements to become a life insurance agent, here they are:
Step #1. Get a college degree
You should complete your education before choosing to work in the insurance industry. Those disciplines that offer a four-year degree program are far more likely to attract and retain talented individuals. While most life insurers do not insist on a four-year degree for entry-level positions, others would rather hire those with more education.
Going to college for a relevant major can make you a more marketable candidate for jobs. Careers in advertising, marketing, and management, for instance, can be quite rewarding.
However, if you want to stand out as a competent potential agent, any formal degree or certificate that displays your mastery of business, management, and accounting basics can help. However, it’s also important to know what you’re buying, so here’s a quick quiz to help you figure out whether or not you already have a decent grasp on term life insurance.
Step #2. Think about getting a pre-license training education
In most places, before an insurance agent can sell life insurance, they must complete some sort of training program. For information on licenses and other educational requirements in your state, contact the appropriate department of the appropriate local government. Take this step, as it will aid you in getting ready for the tasks at hand. To avoid future work neglect, it is crucial to be prepared as soon as feasible.
Inquire as to whether you are required to attend a specific number of seminars dealing with health and life insurance. Then, see whether there is a registry of approved life insurance training programs in your area where you can complete your education and licensing requirements. Finally, if you want to be a better future agent, you should inquire about the specific requirements for ongoing activities.
Step #3. Finish the pre-license training course
Take a pre-licensing course if required in your area. Take the class at a school that has been officially recognized by the government. Training centers are not places to access without a legal license or permit.
The insurance departments of various states can provide all the information you need about course requirements and prerequisites. There is a group of preliminary teachers available on their own websites. You can use these specifics as a reference for the paperwork you need to gather.
Aspiring agents are often required to complete a 20-hour seminar, of which only 7.5 hours would be spent in-person. A typical course might cost anywhere from $100 to $200, so it’s important to plan ahead.
Step #4. Take the insurance licensure examination
The fourth action item is to take the local insurance licensing exam. After finishing the prerequisite training, you can sign up for the licensing exam. You can then submit your application for the review via the website.
However, taking it in person at a certified testing center is recommended. It’s important to remember that several regions also necessitate a business’s assistance with permit applicants. So, before you sign up for the exams, make sure you are familiar with the local restrictions. Learn the ins and outs of acing the life insurance exam.
Step #5. Wait for the results
Right after you’ve handed in your insurance licensure exam, you’ll be required to wait for the outcomes to become available. While you wait, I recommend getting some related work experience, such as becoming a life insurance agent. This will prove useful in the long run.
You can officially start selling life insurance after receiving confirmation that you passed the necessary exam. The next step is to start filling out applications at various companies. This is the final phase in the process to obtain a life insurance license.
Frequently Asked Questions (FAQs)
Is becoming a life insurance agent a good career change?
The BLS predicts a 10% increase in the number of jobs available for insurance sales agents between 2018 and 2028. This is twice as fast as the national average for projected job growth of 5%. Check the projected job growth of insurance sales agents against your current profession if you’re thinking about making a career switch to sell life insurance. It’s probably a good moment to enter the insurance business, and especially the life insurance business, because of the industry’s projected rapid growth.
Before deciding on a profession as a life insurance agent, it’s important to think about the type of workplace you would be happy in. What to anticipate is:
- Identifying clients’ insurance needs through face-to-face meetings and coordinated efforts
- Provide customers with an overview of current and future policies
- Create customized insurance plans for your customers.
- Policies should be renewed on a regular basis.
- Get the word out about what you’re selling to attract new customers.
- It’s important to maintain thorough records of your efforts.
Agents for life insurance typically spend their workdays at an office, though they are free to conduct business anywhere their clients like. Keeping accurate records and exercising excellent organizational skills are two of the most crucial talents for a life insurance agent to have.
How much can you make as an insurance agent?
Agents’ compensation varies by industry and company culture. As a free-lance insurance broker, you can be eligible for a commission-based income structure. This means that you receive compensation according on the volume of insurance policies sold. The amount of money you make depends on how much business you bring in for the organization.
Insurance sales agents may be compensated on a commission-only basis, or with a regular salary, by some businesses. This can help smooth out the wild swings in pay that come with a commission-only salary.
Insurance brokers for health and medical insurance companies can expect a typical annual salary of $65,180, according to the Bureau of Labor Statistics. Working in an insurance agency or brokerage typically results in a lower salary, with the median annual pay being $49,000. An insurance agent’s prospective income is heavily influenced by incentive pay like bonuses and commission. When a life insurance salesperson’s compensation is dependent only on commission, the amount of money they take home each month can fluctuate dramatically.
Those are the basic requirements for obtaining a life insurance agent’s license. All you have to do is go to college, sign up for some training programs, sit for the licensing exam, and then wait. Now that you’ve completed these requirements, you can legally sell life insurance.
To that end, do you intend to acquire insurance? You should first understand the benefits of working with an independent insurance agent.