Becoming an Insurance Agent
Becoming an insurance agent can be a very lucrative career but it planning and determination to make it work. Having been in the insurance business since 1999 and starting my agency from scratch, I am going to provide information that will help those getting started. This blog post will focus on being an independent agent. Future posts will focus on being a company or captive agent.
What is an independent agent and why you might want to be one
Independent agents own their own books of business and can write multiple carriers. In other words they usually own their own business. Successful independent agents usually make more money than corporate or captive agents. There are certainly a few exceptions to this rule but the reality is owning your own book of business will make you more money in the long run. The exceptions would be those that are able to climb the corporate insurance ladder to one of the top rungs.
Being an independent insurance agent is not easy however and the statistics back it up. 90% of independent agents ultimately fail in the business and end up doing something else. Those that stay usually enjoy a comfortable lifestyle with the new and renewal income they generate. So why do so many fail? There are a number of reasons and we will go over most of them in this post.
Becoming an Insurance Agent – Failure to plan and having realistic expectations
One of the main reasons those becoming an insurance agent tend to fail is lack of preparation and planning. Going into any business requires good planning and the insurance business is no exception. Some of the the areas/topics to consider are…
- Determine the product(s) types you will be selling
- How will you find qualified people to offer the products to
- Will you work from home or in an office
- Can you support yourself/family while you get the business running/profitable
- What will you day to day schedule look like
Hardest part of the business
There are a number of challenges in the insurance business such as figuring out what products to offer, getting contracted, getting through the learning curve and may other areas. While they all present a challenge they are not the hardest part. The most difficult part of the insurance business is getting in front of enough qualified prospects. This is the single biggest issue for almost all insurance producers. I have had so many agents tell me “when I get in front of people, I always close them but I am just not seeing enough people”. Everyone says that because closing cases is usually not the issue. The issue is getting the audience in order to close the case.
Becoming an Insurance Agent – People think it will be easy
From experience I can tell you the majority of new people getting into the independent insurance business think it will be fairly easy. They are surprised when they buy a batch of leads they can not get appointments with or they plan a seminar that no one attends. The insurance business is very difficult in the early years. Once you start to build a book of business and have renewals coming in (assuming you offer products that have renewals) things get much easier. At that point you can afford to spend money on lead programs, assistants, marketing and other things that help bring in more clients. The first few year however are a challenge for most.
Lack of money
Becoming an independent agent is even more difficult if you do not have enough money initially. For those living month to month, becoming an independent agent is not the best idea. It takes time to learn the business and build up a renewal income stream. I would suggest those getting into the business need to be able to go at least 3 to 6 months without generating much income. There are certainly exceptions with some agents making a strong income in the first few weeks but that is the exception not the rule.
How can you make it work?
So it being a broker is so hard, how can you be successful in the business. Here is what I would suggest.
- Figure out which product types you will be offering and become an expert in that field/area. Learn as much as you can as fast as you can. Remember that a lot of people are out trying to offer the same products with very little understanding of them. With some hard work, you can quickly become more knowledgeable than 90% of those you compete with.
- Offer products that clients need. It may be easier to offer products that clients must have as opposed to products you need to convince them to buy. Examples are health insurance, Medicare, Auto and home.
- Sell products that create renewal income streams and products with an up front commission. Products that create renewal income or that are paid as earned are great for down the road because they will build up a recurring income stream. The issue many have is they need more money up front and for that reason it is usually important to also offer products that have an advanced commission. Examples are annuities, life insurance, final expense, disability insurance, hospital indemnity plans, medicare supplement plans.
- Work with or get advice from someone that is in the business. Be careful on this one as they may have some bad habits as well but you need to work through the learning curve as quickly as possible.
- It is strongly advised for producers to have access to an online quote engine. This allows them to quote multiple companies and compare prices from one website.
- Find natural markets. Just buying leads is not going to create enough volume for you to make a living initially. Work to find some natural markets such as other agencies that do not sell the products you offer, doctors offices, Pharmacies or any other group you can find that works with a demographic that fits the product you offer.
To watch our webinar on how to have a face to face Medicare sales appointment, please click the link below.
Medicare sales appointment training
To watchour webinar on how to get ready for OEP, please click the link below.
Getting ready for 2018 OEP
Being an independent broker/agent takes planning and effort but the rewards of making it in the business are well worth it. We have many blogs on the topic. Feel free to contact us any time for more information.
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