How to Become a Licensed Life Insurance Agent

So you think you want to be a life insurance agent. To become one, the law requires only that you pass the licensing exam for your state ad that you obtain an appointment with the company or companies of your choice. No formal education is required, and if you have sales experience and can pass the state license test, you do not need a college diploma although some companies prefer some higher education with a focus in business. The secret to becoming a successful agent, however, is a bit more complex.

Know your purpose
Insurance is sometimes regarded as a feast or famine career. About 50% of agents earn an average salary of $42,000. Only 10% make over $100,000 while another 10% make less than $23,000. The highly successful 10% are also those who have been in the business for several years. A little self analysis will help you determine what end of the scale you would most likely be on.

Before investing in preparation materials for your license, examine your reasons for wanting to sell life insurance. Do you love working one on one with people and have a genuine desire to help them make financial and insurance decisions that are in their own best interests (not necessarily yours)? Are you okay with an irregular work schedule or an occasional servicing visit that may not bring you a dime? Think about your interpersonal skills and your own concern for people. Being a good agent is more than adopting a facade of personal interest and concern just to get the sale. Agents who really care are the ones who last.

The legal requirement
Each state licenses its own agents via a state exam following a 36 hour course of study that can be completed in a week long class, online, or in your own home with approved materials. When you purchase your materials, you have to indicate the line of insurance you want. Depending on the state, you may choose life only or life and health. Since many life insurance policies have health related components, most life insurance agents are insured for life and health. You must score a 70% or better on the test, and you can take it as many times as you need to (for a price) until you pass.

Getting Appointed
Once you have passed your test, you will need to decide how you want to conduct your insurance business. Do you want to be a "captive" agent, being responsible to one company and specializing in its products? Or do you want to be an independent brokerobtaining appointments with multiple companies. Either alternative has advantages and disadvantages. Generally, the brokerage route may have a greater potential for a higher gross income, but it involves much more administrative work, higher expenses, and often limits your ability to service clients later on.

Being a captive agent for a single company often means smaller new commissions; however, these are usually supplemented with production bonuses and often have higher renewals than public companies. Captive agents typically report to a branch office where an administrator keys in the applications and handles some servicing issues. Finally, captive agents are often able to cultivate a greater sense of loyalty both to themselves and to their company. It is, ultimately, a matter of preference.

Company specific training
Once you have been appointed, you will be trained on the actual products you will be able to sell. This usually involves time in the office to learn the company products and procedures followed by a few weeks with a field trainer whom you will observe with actual clients. As soon as you can learn the presentations and become comfortable with your own appointments, you will be on your own.

Developing clients
The most challenging aspect of selling insurance is locating quality prospects. Captive companies usually have a lead generation system and simply deduct the cost of leads from your commissions. As a broker, you will need to develop your own methods of acquiring quality prospects. This would include advertising, mass mailings and possible subscription to a lead service. Check out the latter carefully before making a commitment as lead services abound on the internet, and the quality of the leads varies dramatically.

Keeping your clients
Insurance is a competitive and challenging business, and making the initial sale is only half the story. Keeping your clients is important, especially if you are a captive agent as you receive annual renewals on your in-force policies. While the renewals are much smaller than the initial commission, they add up and by the end of the second or third year, your renewals alone would beat flipping burgers at McDonalds.

Some clients will purchase on the basis of price alone, but your best clients will both purchase and stick with you on the basis of value. Life insurance is easy to get. Even the sickest client can qualify for at least a graded benefit if he can afford it. You need to give your clients a reason to be loyal, not just to your company, but to you. If you are willing to find ways to provide service, to be there when it's time to file a claim, to communicate with cards or quick visits when you are in the neighborhood, your clients will be less likely to switch to a smoother sales pitch or lower price.

Success is in your hands. You will not be guaranteed a starting salary, but you will also have no ceiling. The market for insurance and associated products is virtually bottomless, but the agents at the top will not sit down over coffee and spell out their secrets. It will be up to you to join trade organizations, attend sales seminars and develop friendships with seasoned agents whenever possible. Observe, learn and practice.

The bottom line? Success in life insurance takes a small amount of luck, but a lot of determination along with high expectations. You will ultimately achieve whatever you think you can.