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How to Become an Insurance Agent

Arran Stewart

Arran Stewart

Arran James Stewart is the co-founder and CVO of blockchain recruitment …

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Making more than $50,000 a year without the expense and time a college degree requires? If that sounds like an ideal career for you, consider becoming an insurance agent.

Having a flexible schedule and an unlimited earning potential with no college degree required are perks of being an insurance agent. For many, insurance is a lucrative career that also brings the personal and professional satisfaction of helping others get the financial protection they need.

What Does an Insurance Agent Do?

An insurance agent is a licensed professional who helps individuals and businesses get the insurance they need to protect against financial risks. Some insurance agents specialize in life insurance, which pays a lump sum to beneficiaries in the event of the insured’s death.

Other insurance agents specialize in property and casualty insurance, protecting customers from the risk of damage and injuries in car accidents or damage to homes from fire or natural disasters. Health insurance is another specialty among insurance agents.

Agents can help their clients plan for retirement through annuities and investment accounts.

Insurance can be confusing to consumers. Insurance agents fill an essential role in their clients’ financial planning. They help their clients understand the different types of insurance and make recommendations on insurance options.

Insurance agents sell commercial or personal insurance policies to help the companies they represent grow.

Is Selling Insurance a Good Career for 2021 and Beyond?

Becoming an insurance agent can be a great career for those who enjoy working with people and providing guidance on insurance choices. For agents who succeed in sales, the career can lead to annual earnings far above $50,000 a year.

Because agents are paid through their book of business for sales made years before, agents who are successful and stick with their career can make $100,000 or more within a few years.

Artificial intelligence might enable customers to buy insurance online, but often clients don’t realize the risks they take by not having enough insurance. Clients may want personal advice on insurance and financial planning. AI can’t provide the business relationship and expertise that an insurance agent can.

Agents who work on commission can usually always find a job, and the insurance industry is forecast to grow in the decade ahead.

How Do I Become an Insurance Agent?

Becoming an agent can be done easily by starting as a captive agent, representing one insurance company. This method has several advantages to new agents since often the companies pay for licensing tests and provide the training needed for the agent to succeed.

Companies will often check prospective agents’ backgrounds and credit scores before hiring.

Though a college degree isn’t required to become an insurance agent, many insurance companies prefer to hire those who have a college degree or at least some college experience.

Later in their careers, agents may decide to become independent agents, representing multiple insurance companies. Experienced agents can determine which companies and policies will serve their clients best.

Are requirements different from state to state?

Insurance licensing examinations are required to do business as an insurance agent. States test prospective agents’ knowledge of property and casualty insurance, life insurance, and health insurance as well as ethics and the law, which protects customers against being served by agents who are unethical or unfamiliar with the insurance industry. What you need to know varies from state to state.

Other licensing is required by FINRA to sell variable insurance and financial planning products. Certifications can designate expertise in different types of insurance such as life underwriting.

Continuing education and license renewals are required to make sure that insurance agents stay current in their professional skills and knowledge.

How Much Do Insurance Agents Earn?

The median income for insurance agents in 2020 was $52,180, according to the U.S. Bureau of Labor Statistics. Some agents earn less than $50,000 a year, but others earn far more than that. Insurance agents’ salaries are determined by the number of policies they sell. They also earn residual income from sales they made in the past.

For insurance agents who have customers with financial planning products such as investment accounts, salary can also be determined by the funds customers invest.

Insurance agents have expenses of doing business such as office space and supplies, advertising, and transportation, so these should be considered when entering the insurance industry.

Captive Agents vs. Independent Agents

Captive agents can only represent one insurance company, whereas independent agents can represent multiple insurance companies. Also known as insurance brokers, independent agents can offer customers a variety of policies and prices from different companies.

Clients may prefer independent agents because of the selection of products and the likelihood that an independent agent isn’t influenced by the companies they represent.

However, captive agents tend to receive more training and support from the companies they represent.

What is the Career Progression for Insurance Agents?

Some insurance agents move away from sales and toward training and management for insurance companies. This brings benefits such as higher salaries and the satisfaction of helping others become successful insurance agents.

Other insurance agents are happy and may earn more money, as agents. They grow their clientele through recommendations and referrals and enjoy providing their customers with the information they need to get the commercial or personal risk protection they need.

Is Being an Insurance Agent for You?

If you like networking, teaching others, and working in sales, being an insurance agent might be a career where you can succeed. Earnings are only limited by an insurance agent’s sales, making insurance a lucrative business for successful insurance agents.

Though agents have flexibility in schedules, they often work more than 40 hours a week and might call on customers after business hours. Training sessions and continuing education are usually required.

Licensing is required to become an insurance agent, and often multiple licenses and certifications are required.

The best insurance agents are trusted financial professionals who have relationships with their customers, following up with them as their business and personal insurance needs change.

Considering a career change? Check out these insurance agent jobs below

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