Using a life insurance agent or broker can assist you in finding the best coverage at an affordable price when you are purchasing life insurance. To assist customers in navigating the process of purchasing a life insurance policy, brokers work on behalf of the customer and agents work with life insurance firms. The insurance commission rates are determined by the department of insurance in each state, so although agents and brokers profit from the products they sell, there are no additional fees for the customer. So, continue reading to learn more about how to become a life insurance agent, the license needed, the job and responsibilities, and the agent’s salary.
What is a Life Insurance Agent?
A qualified individual who sells life insurance is a life insurance agent. They can operate more independently and be able to sell life insurance from a variety of businesses, or they can work for an insurance company and sell policies that are “carried” by that insurance company. A life insurance agent will ask you questions about your life and your insurance goals when you get in touch with them.
What Does a Life Insurance Agent Do?
Finding a life insurance policy that meets a client’s needs is the goal of a life insurance agent. Most people buy life insurance plans so that their loved ones would be taken care of in case they pass away. A middle-aged person might get a life insurance policy and specify that the proceeds be divided among their spouse, their children, and their siblings. Many times, life insurance is also intended to assist the decedent’s family in covering funeral costs and other future expenses.
An agent must be licensed to sell life insurance since they must operate within the law and use a range of networking and marketing strategies to sell life insurance products. To increase the sales of life insurance policies, life insurance salespeople are frequently involved in their community. A life insurance agent may also make cold calls or send emails to prospects they have acquired from a service or the business they represent.
The life insurance agent makes sure all documentation is correctly filled out and sent to the correct location when the life insurance is sold. Life insurance brokers may need to handle this procedure and keep their clients informed about the status of their policies because life insurance policies must first receive permission from the firm providing the policy.
How to Become Life Insurance Agent
The prerequisites for obtaining a license for life insurance agents differ by state. The steps to becoming a life insurance agent are as follows:
#1. Obtain a GED or high school diploma.
A high school diploma or a GED is required for life insurance brokers to obtain their insurance license. Additionally, a lot of insurance businesses that employ agents could require that they have a GED or a high school graduation as a minimum. If you know you want to work as a life insurance agent when you graduate from high school, business ideas, marketing, communications, and math studies may be especially beneficial.
#2. Research licensing requirements
Once you’ve decided you want to operate as a life insurance agent, you should probably look into the local criteria for licensing. Although many insurance agents handle the license requirements on their own, if you have already been hired by a company to fill a life insurance agent function, they may help you with the procedure. On the website of the insurance commission or department in your state, you may frequently find information about licensing requirements.
While some jurisdictions just require passing the exam, others mandate that life insurance agents complete a pre-licensing course with a minimum number of hours. Additionally, the criteria vary depending on whether you desire a license as a life insurance agent or a life and health insurance agent. The rest of the procedure may go more smoothly if you do your study to determine which license is ideal for you and how to obtain it.
#3. Complete licensing requirements
You can complete them to obtain your license once you are aware of what the local licensing requirements are. To fulfill a pre-licensing education need, you might need to enroll in a course that lasts for a specific amount of hours. These courses are typically provided by outside groups, and if you’ve already been hired, your company may cover the cost of them.
In addition to maybe needing to take a class, you could also need to submit to a background check and have your fingerprints taken if your state requires it for licensing. Before taking your exam and receiving your license, you must apply for a license in some states, but not in others. Verify you have fulfilled all standards set forth by your state to ensure you receive your license when expected.
#4. Pass the licensing exam
You’ll probably need to pass a licensing exam after you’ve satisfied all of your other licensing criteria. Some people may find it beneficial to take an exam preparation course, especially if your state doesn’t require any formal schooling to become a certified life insurance agent. You could also choose to use books or internet resources to do your independent study. Among the topics covered on a life insurance agent license exam are:
- State laws and ordinances
- Obtaining, reviewing, and delivering insurance policies
- Policy exclusions and riders
- Retirement and taxes
- Different policy types
Each exam’s subject matter, particularly the questions on state laws and regulations, frequently varies by state. You may be able to get information about what will be on licensing exams via your state’s insurance department or commission website in addition to preparation workshops and other educational resources. After passing your test, you might need to submit papers to finish your licensing requirements and become formally licensed.
#5. Think about acquiring more licenses
After receiving your license as a life insurance agent, particularly after starting your career, you can decide that you require additional licenses. There are a few causes why you might need additional licenses. One is that you might reside in a region where you sell life insurance in multiple states; however, each state has its licensing requirements, so you must have a license in each state before you can sell life insurance there.
You might decide to sell other types of insurance in addition to life insurance, and those other insurances almost certainly call for a different license, so there is another reason you might need a second license. Finally, you might need a license from the Financial Industry Regulatory Authority (FINRA) and the North American Securities Administrators Association (NASAA) if you offer variable-contract life insurance products or securities.
Life Insurance Agent License
You must pass a test and fulfill additional requirements to obtain your life insurance agent license. To get licensed to sell life insurance, you must be at least 18 years old. In some areas, you can also become licensed to sell health insurance. The steps are as follows:
- Finish whatever pre-licensing coursework that the state you seek a license in requires. Each state has a different requirement for hours and expenses. Note: Before you begin the process for your state, make sure to verify with the state’s insurance organization because certain states do not require prelicensing courses.
- Pass the state’s life insurance or life and health insurance licensing exam. Exam preparation for the insurance license is beneficial.
- Pass a criminal history check. The procedure varies from state to state and occasionally involves fingerprinting.
Life Insurance Agent Job
With the help of this sample job description for a life insurance agent, you may get a decent sense of what qualifications employers are seeking. Keep in mind that every organization is different, and every candidate for a position as a life insurance agent will have specific requirements.
Job Summary
We are searching for a Life Insurance Agent to join our team at our insurance company. Your job includes assisting potential customers in selecting the best insurance options for their requirements. You guide customers through every step of the sign-up process, so you must be knowledgeable about every facet of buying life insurance. Building our clientele requires you to make cold calls and follow up on leads, both over the phone and in person, therefore you must be an exceptional communicator. Although we are happy to train inexperienced individuals, you must be determined to finish the necessary steps to obtain an insurance agent license before starting employment. Experience in sales is a plus.
Duties and Responsibilities
- Employ cold calling and direct mail strategies to increase sales.
- Assist clients in the purchasing process
- Address any queries that prospective or current clients may have.
- Keep track of all of your sales.
- Continue your education to maintain your license.
Requirements and Qualifications
- A high school diploma or a GED
- Possession of or desire to get a license for insurance sales
- Sales and communication abilities
- Sales experience in the health or life insurance industries (recommended)
How Do Life Insurance Agents Get Paid?
The commissions from a portion of the premium itself are how insurance agents are compensated. You won’t be slammed with a charge right away after purchasing insurance, so don’t worry! They will receive the commission from the insurer from which you purchase your insurance.
An agent will earn greater commissions as they sell more life insurance policies. Typically, independent agents are compensated only through commissions. But a “captive” agent can get a regular salary from the corporation they work for, and less in commissions. Additionally, if their business is responsible for things like marketing and administrative costs, their salary can be a little lower.
The cost of insurance is regulated by each state. By doing this, insurance companies notify the state’s insurance department of their “price list” of all the plans they sell. Due to this legislation, an insurance agent cannot provide you with a quote that is higher than what you would receive from the firm directly.
Salary of a Life Insurance Agent
In the US, a life insurance agent makes an average salary of $62,552. The usual salary range for a life insurance agent is $39,000 to $99,000 annually. The average hourly rate for life insurance agents is $30.07 per hour.
How much a life insurance agent makes depends on their location, education, and experience. In Alaska, Washington, Oregon, New Hampshire, and Massachusetts, life insurance agents make the greatest money.
Research Synthesis.
- In the US, a life insurance agent makes an average salary of $62,552.
- The average life insurance agent’s salary ranges from $39,000 to $99,000 in the US.
- life insurance brokers often make between $18 and $47 per hour in wages in the US.
- The typical life insurance agent salary in Alaska is $124,219; in Washington, it is $90,447; and in Oregon, it is $86,703. These are the three states in the US where life insurance agents make the most money.
- AIG pays life insurance agents the highest average salary.
- In the US, the industry that pays life insurance salespeople the most is insurance.
States with the Best Pay for Life Insurance Agents
Although a life insurance agent’s annual salary might range from $62,552 to $30.07, or an average of $30.07 per hour, there are various ways for them to earn more. For instance, you might earn $125,234 annually in Anchorage, Alaska. Boston, Massachusetts, Portland, Oregon, and Washington, DC are more high-paying destinations. So, your greatest option, if you’re in an entry-level position, is to relocate to Anchorage, Alaska, where the beginning salary average is $94,000. Alaska, Washington, and Oregon provide life insurance brokers with the highest salaries. The lowest-paying states are Florida, Georgia, and Oklahoma.
Can You Make Money as a Life Insurance Agent?
Yes. life insurance agents may earn as low as $28,000 or as much as $125,000 annually.
What Is the Role of an Agent in Life Insurance?
Life insurance agents are responsible for selling life insurance plans that pay out when the life-insured person passes away, giving advice, and acting as a middleman between the client and the insurance company.
Is It Hard Being a Life Insurance Agent?
Not at all. The majority of financial occupations are difficult compared to being a life insurance agent. There are no prerequisites beyond a high school diploma, at most.
How Much Does It Cost to Get Your Insurance License in NY?
Your insurance course, application, and exam will cost you roughly $375 in total.
Can an Insurance Agent Be a Millionaire?
A big yes. But just like any other job, becoming good at what you do and reaching these revenue levels takes time. Top agents can make anything from $100,000 to $1 million annually.
What Is the Downside of Selling Your Life Insurance Policy?
Your coverage will end if you sell your life insurance policy, which is the primary drawback.
Related Articles
- HOW MUCH DO INSURANCE AGENTS MAKE: Average Pay In 2023
- Insurance Sales: Meaning, Agents, Salary, Life & Car Insurance Sales
- How to get a Business License in Texas: Step-by-Step Guide
- LISTING AGENT VS SELLING AGENT: Definition and Differences
- SOFTWARE LICENSE MANAGEMENT TOOLS: Meaning and Best Tools To Use
References
