Life Insurance Career
What Is Life Insurance?
Before an agent starts a life insurance career, they must understand what life insurance is and how it works. Life insurance is a policy that a person purchases from an insurance company to provide a sum of money to beneficiaries upon the death of the insured person. Some of the reasons people purchase life insurance are income replacement, the ability to pay off debts, and to honor promised funds such as college. The main idea behind life insurance is peace of mind for the clients that their family will be taken care of in the event that they pass away.
Agents with an insurance career in life insurance must prospect and identify who needs life insurance and assess what their specific needs are. An agent must also explain what plans are available to the client. Typically there are two types of life insurance policies: permanent life policies and term life policies.
Permanent life policies accrue a cash value and a sum is assured to be paid out at the end of the policy, whereas term life policies build no cash value and the policy only lasts for a certain amount of time (such as 5, 10 or 20 years). A benefit is only paid out if the insured passes away during this time period.
Term life insurance has lower premiums than permanent life insurance since term life is often regarded as pure death benefit with no investment element.
An agent must collect the medical history of their clients so the insurance underwriters can determine whether to issue a policy and how much a policy will cost for the individual.
Why choose an insurance career in life insurance?
There is a growing market for life insurance. As the majority of the population is aging, there is a need for those people to financially protect their families in case of death. Agents with an insurance job in life insurance can earn an excellent income. According to Indeed.com, the average agent with an insurance career in life insurance earns $77,000 annually; however, with a life insurance career it is up to the agent how much they want to sell and the sky is the limit. Many agents find an insurance job in life insurance to be rewarding because they get to help clients obtain a sense of security knowing their family will not be financially burdened if the client passes away.
Who would excel at a Life insurance career?
Those interested in an insurance career in life insurance need to be self-motivated and thrive in a fast-paced and dynamic environment. To be successful in a life insurance job, an agent needs to learn the ins and outs of the policies they are selling and work to understand and listen to the specific needs of their clients. A life insurance career requires strong sales and marketing skills to acquire clients and sell policies, but once the policy is sold there is little service that needs to be done. The extra effort and skill can result in a higher income compared to other insurance careers.
There is usually no requirement for a college degree when choosing an insurance career in life insurance. However, an agent must prepare for and pass a state exam to obtain a life and health license to sell insurance before he or she can start writing business. In some states you may also need to register your fingerprints. The section below outlines how to get started in an insurance career selling life insurance.
How to start an insurance career as a Life Insurance Agent (varies by state)
- Complete Pre- Licensing Education: Learn the rules and regulations of your state’s insurance industry. You may be required to attend classes, but some states allow you to study at your own convenience. You will be issued a certificate for completing these state certifications and at that point you are permitted to take the state exam to become licensed as a life insurance agent.
- Take the State Exam: Contact your state’s insurance department to find information on your state’s requirements and local testing centers. In addition to the self-study option, there are in-person and online schools/courses that you can attend. Once you have completed the course, bring the course completion certificate to the testing center on the day of your exam. This test covers life and health insurance basics and insurance laws in your state. After you pass and complete this exam, you can then apply for an insurance agent’s license.
- Buy Errors and Omissions Coverage: As a disability insurance agent, you are required to have Errors & Omissions insurance. This liability policy protects you and your career against financial loss related to your involvement in the sale or service of a disability insurance policy.
- Get Established: To start your insurance career and begin selling life insurance, you can decide to work for an established agent as a captive agent, or you can work as an independent agent. Independent insurance agents typically contract through an Independent Marketing Organization (IMO) or a National Marketing Alliance (NMA) in order to get appointed and sell carriers’ policies. These marketing organizations offer sales, marketing and compliance support.
- Get started: Your insurance career starts NOW! Contact us to launch your career as a Life Insurance agent today.