How To Become An Insurance Agent

How To Become An Insurance Agent

Insurance is a big industry not only because of the lots of unlimited earning potential it presents but also because of the important role it plays in people’s lives. From property to health, life to business. 

Successful business owners will tell you that wherever there is a need for service from so many people, there is money to be made and insurance is definitely one such industry. 

So how to become an insurance agent and start earning a share of the money in insurance? This is what you are about to learn here. Let’s get straight into it. 

What Is the Role of an Insurance Agent?

Simply put, the key role of an insurance agent is to market and sell insurance policies from insurance companies.  The category of insurance can differ but the work description is the same. The specific item that is sold by an insurance agent is known as an insurance policy, which essentially defines the type of insurance available to clients. 

An insurance agent is expected to come up with promotional strategies targeted at attracting potential clients into buying insurance for various aspects of their lives. The insurance company that you represent as an agent will provide guidance on all promotional materials needed and how to use them. 

The most successful insurance agents are known to specialize in specific insurance products across the insurance industry. For example, you can decide to specialize in health insurance, life insurance, business insurance, commercial property insurance, casualty insurance, property, auto insurance, etc. You can still specialize in more than one type though. 

Besides selling insurance policies, insurance agents can also offer other services as a way of expanding their income streams. These include financial management and investment plans for various categories of people in society. 

What Are the Types of Insurance Agents?

The insurance industry has two main types of agents as follows:

1. Independent insurance agent

An independent agents will sell insurance products from more than one company and can take on as many companies as they wish. Independent agents lean more towards clients than insurance companies since they are not loyal to one company. In other words, they can work hard to shop good rates for a client as long as they are assured that the client will buy insurance through them. 

These types of agents are mostly referred to by the common name tag of brokers. The independent agents type of insurance agency presents the allure of possibilities of huge business opportunities. But the downside is their small resources which can spread them thin and make marketing difficult for the many products they have to deal with from different insurance companies. 

2. Captive insurance agents

These are agents who specialize in selling insurance products from one insurance company only. This might sound like a limitation of course but it has huge advantages. When you sell insurance from just one company, you stand out to be recognized by a potential client and new clients will especially view you as more reliable than if you were selling insurance products from many companies. 

You become associated with one brand, your expenses reduce and your knowledge of that company’s products goes deep. If you decide to work with one company, then take time to choose a company that offers competitive rates and pays timely attractive commissions to their insurance agents. 

Mandatory Requirements to Become an Insurance Agent

This is what you have been waiting for, and here now are the mandatory requirements that you must meet if you want to become an insurance agent. 

1. Educational requirements

In terms of education, a high school diploma is a must or GED. Of course, your mastery in the industry can increase abundantly with more education levels and wide soft skills such as business skills and communications skills. 

Additionally but not mandatory achievements include a college degree, courses in insurance,  a degree in business, or indeed any degree across the wide array of bachelor degree programs. These will increase your competitive advantage especially if you are looking at insurance as one of the career options you would like to pursue in the long term.

2. Licensing requirements

You require an insurance license whose specific requirements will vary from one state to another. The common and standard requirement for licensing throughout all the states is that you must pass the license exam administered by your state.  

You are required to obtain a license for each insurance you sell. For example, if you want to sell insurance for both property and life or health, you will need to acquire two separate licenses. One license for property, another one for health insurance, etc.

5 Main Steps You Can Follow to Quickly Become a Successful Insurance Agent  

Now that you have a good idea of the mandatory requirements, these are the general steps that will guide you to full qualification as an insurance agent.

1. Get education right

A high school level diploma is legally the only education requirement you need in order to become an insurance agent.  

However, it is highly encouraged that you consider taking formal degree programs especially in finance, business, marketing, and communications. College education and the skills that come with it help to equip you with super strengths that will drive you optimal success in the insurance industry. 

Higher education institutions like colleges have a wide selection of education courses that cover the insurance industry and so this should be the perfect line to take if you have really made up your mind that you want to take up insurance as a full-time career.  There are several education opportunities you can get into right away, including online resources.

2. Fulfill licensing requirements

Each state has a licensing department dedicated to insurance.  Start by finding your state’s licensing requirements for one to acquire an insurance license and become an insurance agent. Some states might require you to undertake classroom training for a set number of hours. 

Of course, things like background checks have to be done and this will require your fingerprints to be taken. Remember that for each insurance type you want to sell, you need a separate license. So choose carefully to avoid taking licenses that you might end up not using down the line.

3. Pass insurance exam

Now that you are ready with the rest of the requirements on becoming an insurance sales agent, then the next course of action is to take up a licensing exam, pass it and that’s it. The purpose of the exam is to test your knowledge and understanding of the important concepts of the insurance industry including the main products that clients need. 

Your license will be issued once you pass this licensing exam. A securities registration of series 6 or 7 might be necessary depending on the type of insurance that you want to specialize in.  

4. Gain experience with an established insurance agency

While you can go straight ahead and start your own insurance agency, sometimes it’s advisable that you start off by working for an established agency. You will gain the kind of experience you need to become an authority in the industry.

After gaining sufficient experience and valuable knowledge, you can now get out comfortably and open your own insurance agency. Of course, it goes without saying that you need capital to get all the routine business registrations done in your state. A period of 3-5 years is enough to attain sufficient hands-on experience in insurance. 

5. Join associations

There are several professional insurance agent groups and associations. Find one within your area or one with a strong presence online and join it. By becoming a member of insurance associations, you get opportunities to grow among highly experienced professionals, stay current on developments in the industry, and benefit from privileged opportunities such as new business and leads for potential clients. 

You can as well join national insurance associations. The memberships of national associations can be huge, running into thousands of members. They provide useful resources for insurance agents for education, professional development, networking, advocacy, industry analysis, etc.

Can I Become a Successful Insurance Agent if I Don’t Have a Background in Insurance?

Yes, you can! Ignore the myth that only persons with a background in insurance can qualify to become insurance agents. All you need is to meet the requirements and go through the steps.  

In fact, statistics show that the most successful insurance agents never started with a background in insurance. The most important attributes you need to succeed in the business of insurance agencies are determination and excellent human interaction skills. These skills enable you to convince clients, make them buy your policies, and sustain a long-term relationship that locks them in once they sign up. 

Self-motivation, entrepreneurial spirit, and super communication skills create a great foundation for a strong career as an insurance agent. Once you have these, all you need is to learn, get the right mentorship, and throw your heart out to start building your experience.

Conclusion

Did you find this tutorial useful? It will be so fulfilling to learn that this tutorial can help you build a solid career that will open doors to the unlimited earning potential of the insurance industry. The purpose is to get you started and become successful as an insurance agent. 

Please share your thoughts or even tips in the comments section and kindly share this tutorial if you liked it!