Can You Transition into Insurance Sales?

Can You Transition into Insurance Sales?

A career in insurance sales can be a real gamble even for someone with prior sales experience. While the most successful agents in the nation make more than $1 million annually, many of those who sign on to sell insurance wash out within a year.

While life insurance sales has a reputation for being an easy field to enter, that’s not always the case. At New York Life Insurance Company’s South Florida office, managing partner Greg Jensen reviewed applications from 1,300 people in 2007, but he hired only 45 as sales associates.

“A lot of companies try to convince job candidates that their company is great and everyone is going to make $100,000,” Jensen says. “We ask: Is this a suitable career for the candidate? We do an extensive job of interviewing to help the candidates know if this is the right career choice for them.”

Most Likely to Succeed

Who transitions well into insurance sales? Real estate agents, mortgage loan officers, teachers, copier sales reps and auto sales specialists, Jensen answers. “The ones who have the ability to position themselves and network, the good ones who are finding they need a recession-proof career and those with deep-rooted relationships within their communities have the best chances for success,” he says.

Sonia Montana, a New York Life agent in Miami, perfectly fits that description. She left her job as a Realtor in 2005. “I had a big database of clients that trusted me and liked me,” she says. “I knew I could offer them a different product.”

The hours in the insurance industry can be better than those in real estate, mortgage lending and car sales, all of which regularly require salespeople to work evenings and weekends. “As Realtors get more involved with their families, they want the flexibility we offer,” Jensen says.

Varied Backgrounds, Common Traits

Successful agency sales reps come from outside the sales arena as well, says Dan Strubberg, director of agency recruiting and development for State Farm Insurance in Bloomington, Illinois. “They’re people who strive for recognition, who are competitive, who like the risk of a business venture where they are thriving on the connection of success and hard work and wanting to help people solve the risks of everyday life,” he says.

Other professionals who often make the transition to insurance sales well include nurses and bank branch managers. Some educators take the job with plans to work as agents for a year to 18 months and then go on to become full-time career-development educators, Jensen says. Bank managers who want a similar executive position in insurance may begin their insurance career as agents and then move up to the management track. At Jensen’s firm, a partner or manager who was an agent can earn between $60,000 and $100,000 a year to start (with the beginning salary equaling the last 12 months of commission).

But Not All Sales Are Equal

When people make a transition in sales, they assume that because they sold in one arena, they can sell in another just as easily. But that’s not necessarily true of the insurance industry. The transition can be especially difficult for those coming from an inbound sales position — for instance, selling home improvements to customer leads generated by telemarketers. Those who are used to creating their own customer leads via personal networking and marketing will find the leap to insurance is a shorter, surer career hop.

To succeed, a new agent must generate a minimum amount of sales during the first year. At New York Life, that bottom line is $18,000 in first-year commission, not counting the subsidies New York Life pays its new agents. At the end of the first year, about 40 percent of those Jensen hires will be able to hit that target. The 60 percent who can’t are let go. That may seem like poor odds, but that retention rate is significantly higher than the insurance sales industry’s overall retention rate of 12 percent to 14 percent.

In the final analysis, those who succeed in insurance sales come from many backgrounds but share a few common traits. They’re self-disciplined and entrepreneurial, they can play through rejection and they’re proactive network builders.

Can You Transition into Insurance Sales?
12 Myths about Becoming an Insurance Agent

12 Myths about Becoming an Insurance Agent

Insurance is too complex. I’m not qualified. It’s too late to change careers. If you’ve ever considered the steps to becoming an insurance agent, you’ve likely been exposed to these common misunderstandings and misconceptions about selling insurance. To set the record straight, Farm Bureau Financial Services is here to bust the top myths about becoming an insurance agent and help ensure nothing stands between you and your dream opportunity!

Myth #1: Only Candidates with an Insurance Background are Successful
The truth is, most of our agents don’t have a background in insurance sales. They possess other innate, transferable qualities that make them quick learners and successful leaders. Though many of our top candidates have some prior experience in sales, business and/or marketing, certain personality traits, such as having an entrepreneurial spirit, self-motivation and the ability to communicate effectively, can lay the right foundation for success in becoming an insurance agent. From here, we equip our agents with focused training, continuing education opportunities and one-on-one mentorship programs designed to help them learn the ins and outs of the industry.

Myth #2: Insurance is all About Sales
Becoming an insurance agent is not another sales job; it’s an opportunity designed to help people protect who and what matters most. Agents find their career path to be fulfilling and rewarding as they help individuals and families within their community protect their livelihoods and futures. They understand that their business is not just about insurance products – it’s about people, relationships and making entire communities healthier, safer and more secure.

Insurance companies often provide the training and assign mentors who demonstrate how to be an insurance agent. Our team members are trained on a sales process which will help them determine the best coverage for each client/member or business. The sales process begins with identifying a prospect, whether you’re selling a personal policy or a commercial policy. From there, you can get to know the potential client/member, discover their needs and determine their long-term goals. This will help you develop a policy recommendation that makes the most sense for them.

Myth #3: It’s a Desk Job
Becoming an insurance agent is an opportunity for those who prefer to be hands-on and forward-facing and those who strive to build relationships and make a difference. Because of this, we see our agents as “field workers,” working one-on-one with client/members, volunteering within their communities, participating in grassroots networking and arriving at the scene when they’re needed most.

Myth #4: People Prefer to Buy Insurance Online
There are some people who may believe it’s easier to buy insurance and compare quotes online, but not everyone. The reason so many client/members prefer to work with local insurance agents over insurance websites is because our agents have the unique ability to customize insurance packages and offer a level of service that simply isn’t possible from a voice on the phone. That’s something we just don’t see changing, no matter how “digital” our world becomes.

However, our agents have made efforts to be available on digital platforms for those that like to browse online first. Many of our insurance agents actively network on social media and create their own personal agent websites to give users an option to learn more about the insurance opportunities they offer and contact them online before meeting in person.

Myth #5: Insurance Agents Work Really Long Hours
It’s true that a career in insurance sales isn’t your typical “9 to 5” job. Agents are expected to be there for their client/members when they’re needed most, and in the event of an emergency, that can be day or night. On a day to day basis, however, our insurance agents enjoy the freedom that comes with owning their own business and the flexibility it allows in creating their own schedules and doing business on their own terms.

Myth #6: The Financial Commitment is Too Risky
Becoming an insurance agent for takes commitment, hard work, time and effort to be successful. But, unlike many other small business opportunities, there are no franchise fees or long-term financial commitments. In addition to a training and financing program during the first 5-8 years, we also offer ongoing support and resources dedicated to growing your earning potential.

Myth #7: You’ll Have to Quit Your Day Job
A Developing Agent Program lets potential agents begin building an insurance business without quitting their current job or sacrificing savings to get started. It’s a 4-month developmental period intended to give candidates the steps to becoming an insurance agent and ease the transition into becoming a full-time contracted agent. The “try it on for size” approach gives our agents honest insight into the expectations and commitment necessary for success as an agent, so together we can decide if it’s a good fit.

Myth #8: Once You Commit, You’ll be on Your Own
While it’s true that our agents are responsible for growing their network, provides each agent with the tools, support and training to maximize success. Training and support start from day one and continue throughout an agent’s career.

Insurance agents begin their opportunity with an Agent Development Program, which shows candidates exactly how to be an insurance agent and helps them gain experience so they are ready to hit the ground running. But the training and support doesn’t stop there! Many companies offer a marketing toolkit, on-call support and personal websites to help you build your brand and your business. In addition, agents are encouraged to attend sales conferences to further their education, hear from top industry speakers and learn new tips to help their business grow.

As an insurance agent, you have an entire team by your side to aid you in continuing your success. Our mentoring program offers one-on-one coaching for agents at each of their initial client appointments to help agents gain the practical experience necessary to master skills and tackle obstacles. Each agent is assigned an agency manager who will offer encouragement, tips and advice to help them maximize their insurance career.

Myth #9: Insurance is Limited to Life and Car Insurance
Most people think of insurance in terms of life and car insurance, but there are a number of other important products to consider- a full suite of insurance products, meaning our agents are able to help people from all walks of life – rural, urban and in between – protect everything from their family to their professional dreams.

Myth #10: It’s Too Late to Change Careers
It’s never too late to start a career in insurance! In fact, the ideal agent is someone who is interested in running their own business, a leader and an individual who wants to make a difference in the lives of people in their community. If you are someone who is ready to transition from your past career to a new one as an agent, we’d love to talk to you.
A day in the life of an insurance agent is never the same! As your own boss, you will set your own schedule, which means you can make it as routine or spontaneous as you’d like. Beyond a day-to-day basis, you never know when disaster will strike your community, and when it does your local insurance agents are some of the first to help keep things together and protect families that were affected.

Myth #12: Insurance Agents Are Just Middlemen
Although you’ll get plenty of support from Farm Bureau, we encourage our agents to take full advantage of the opportunities that running your own business brings. When you become an insurance agent for Farm Bureau, you are your own boss. It is your responsibility to get to know the individuals within your community, learn about what’s important to them and use that information to determine their insurance needs.

Don’t Trust The Myths That Surround The Insurance Industry
Don’t let these top myths about becoming an insurance agent keep you from exploring a career with us! The best way to find accurate answers to your questions about a career is to speak with an agent. Click ‘Join Today’ to begin the process today.

Becoming a Life Insurance Agent

Becoming a Life Insurance Agent

Few industries outside of the financial services industry offer the potential for relatively inexperienced professionals to make significant income within their first year of employment. Within the financial services industry, few careers offer newcomers the opportunity to earn so much right off the bat as a life insurance agent. In fact, a hard-working insurance agent can earn more than $100,000 in their first year of sales.

But, success as an insurance agent doesn’t come without a cost. It’s a tough field and most participants burn out sooner rather than later. Insurance agents hear “no” far more than they hear “yes.” It’s not uncommon for the “no” to come mixed with a fair amount of obscenities and the proverbial door in the face. Additionally, many people hold insurance agents in low regard, with some people equating them to glorified con men. But, for those who can stomach the potential rejection, the paycheck and flexibility are worth the effort.

Becoming An Insurance Agent

KEY TAKEAWAYS

  • The career of a life insurance agent is lucrative but involves constant hustling, networking, and rejection before a sale is made.
  • Life insurance agents might be given a small salary to get started but are otherwise primarily dependent on commissions to make a living.
  • Finding potential customers is difficult and time-consuming; getting those customers to make a purchase once you track them down is even harder.
  • A strong background in sales can get you hired, but once hired, you must take a 25-50 hour class and pass a state-administered licensing exam.
  • When looking for a job be sure that you only apply to companies that are well reviewed by rating agencies like Moody’s and Standard & Poor’s.

Overview of the Insurance Field

While there are many kinds of insurance (ranging from auto insurance to health insurance), the best money in the insurance field is for those selling life insurance. Agents focusing on this end of the insurance market help families, businesses, employers and other parties protect against a financial loss when someone dies.

Insurance agents selling this type of coverage are either “captive” agents, which means they only sell insurance from one company, or “non-captive,” meaning they represent multiple insurance carriers.2? Either way, the typical insurance agent is going to spend the bulk of his or her time engaging in some type of marketing activity to identify people who might be in need of new or additional insurance coverage, providing them with quotes from the companies they represent and persuading them to sign the new insurance contract.

Typically, a life insurance agent receives anywhere from 30%-90% of the amount paid for a policy (also known as the premium) by the client in the first year.3? In later years, the agent may receive anywhere from 3-10% of each year’s premium, also known as “renewals” or “trailing commissions.”

Let’s look at an example:

Insurance Sales Commission Example

Bob the insurance agent sells Sally a whole life insurance policy that covers her for the rest of her life as long as she continues to make her premium payments. Bob’s insurance company pays a 90/5% commission on whole life policies, which means the selling agent receives 90% of the first year’s premium and 5% of future renewals.

The policy costs Sally $100 per month or $1,200 per year. Thus, in the first year, Bob will make a $1,080 commission on selling this life insurance policy ($1,200 x 90%). In all subsequent years, Bob will make $60 in renewals as long as Sally continues to pay the premiums ($1,200 x 5%). An agent selling one or two policies per week at this commission level could make $50,000 to $100,000 in their first year as an agent.

Life Insurance Agent Qualifications

As mentioned before, a life insurance agent is not a profession for the thin-skinned or faint of heart. In fact, more than any other factor, including education and experience, life insurance agents must possess a fighting spirit. They must be people who love the thrill of the hunt, the rush of a sale, and see rejection as a stepping stone to eventual success. A career in life insurance sales is not ideal for those who view themselves as introverted, soft-spoken, or afraid of conflict.

The vast majority of life insurance companies have no formal education requirements for becoming an agent. While many prefer college graduates, this general rule is constantly overlooked in favor of the “right” candidates. Previous experience in the insurance industry is not required because most medium and large insurance carriers have internal programs to train their salespeople about the products they’re going to sell.

While it may prove easy for a tenacious go-getter to get hired at a reputable insurance company, there is one non-negotiable hurdle that stands between a potential insurance agent and their commissions: state licensing. Insurance agents are currently licensed by the individual state or states in which they’ll be selling insurance. This generally requires passing a state-administered licensing exam as well as taking a licensing class that typically runs 25-50 hours.

100%

The sales commission life insurance agents might earn in the first year if they are on a commission-only salary; that’s the highest commission for any type of insurance.

Getting Hired to Sell Insurance

If you feel like a career in life insurance sales is for you, there are a couple of steps to take in finding your first job. First and foremost, you’ll need to put together a resume that highlights your entrepreneurial spirit. You’ll want to include anything that shows you taking initiative to make things happen, whether it was starting your own business or taking someone else’s business to the next level. Life insurance agents have to be driven and have the ability to be self-starters. Resumes that show a track record of that kind of behavior will help you get your foot in the door.

Once you’ve got your resume polished, you’ll want to begin finding positions and applying. It’s really important you don’t feel pressured to take the first position that comes along, as working for the wrong company can both burn you out and haunt you for the rest of your insurance career. Ideally, you want to work for a well-known company with a good reputation among consumers, other agents, and the insurance rating agencies.

Perhaps the best place to start in deciding where to apply is to visit the insurance company rating websites for A.M. Best, Moody’s, or Standard & Poor’s. From there, you’ll be able to build a list of companies that have ratings of “A” or higher in your state. These companies will typically offer the most-secure products at reasonable prices, with an emphasis on compensating and keeping quality agents.

The work of a life insurance agent is grueling and most don’t last more than a year; on the upside, this means that there are constant vacancies and it can be relatively easy to get started as a new hire.

Be Sure to Follow Up

Once you’ve created this list, begin looking at each company. Due to the high turnover rate of insurance agents, most companies prominently post their job listings by geographical area, which makes them easily searchable for you. When you find a company in your area that seems to fit your personality, apply for the position as the company instructs on its site.

Follow up with regular phone calls on a weekly basis until you hear an answer either way. Many insurance company recruiters won’t even interview a potential agent who doesn’t first make a follow-up call, because this is a strong indicator of a potential agent’s tenacity. During your interview, continue to communicate your entrepreneurial and “never say quit” personality, because most managers will hire someone based on these factors over all the others combined.

If you’re lucky enough to land the job, you can expect your first 12 months to be spent handing out a lot of business cards and making a lot of phone calls. Your sales manager will be the first to remind you that your only purpose in life is to find potential clients. In fact, they’ll be far more interested in how many contacts you’re making each week than how well you know their product line.

Do expect to struggle financially for the first few months until your first sales commissions start rolling in. While some companies offer a salary to keep newbies from starving, this is becoming rarer and rarer. Many agents are now lucky to be compensated for one to two months of training before being put on a “commission-only” basis.

A Few Warnings

While the life insurance industry promises great rewards for those who are willing to work hard and put up with a good amount of rejection, there are two other pitfalls you need to be aware of. First, you will most likely be expected to market to your friends and family. While that might be tempting and seem like a great idea to get you started, it can also burn a lot of bridges with people you care about.

Second, you should visit your state insurance commissioner’s website and check out the complaint history against companies that you’re considering working for. What you’ll typically find is insurance companies that maintain less than an “A” rating, as well as those that sell insurance using multilevel marketing, have a much higher incidence of complaints than the larger, more established companies.

Accepting a job with the wrong insurance company will go a long way toward burning you out and ruining your dreams of a promising career. If a career in life insurance sales is something you truly desire, take your time and wait for the right opportunity at the right company. Doing so will maximize your chances of long-term success.