How to become an independent insurance agent
Learning how to become an independent insurance agent can be very rewarding due to the opportunity and flexibility involved. The steps to becoming an insurance agent vary from one state to another but in general, they are all similar. How long will it take you to become an insurance agent? Depends a lot of the individual person but usually you can get set up within a month. A great deal of it depends on how long it takes you to study for the test. Click here to learn more about getting an insurance license.
Becoming an independent insurance agent is different than a captive agent. Independent agents are usually 1099 general contractors that have access to numerous insurance carriers. This will give them a great deal of flexibility with product choice. It also allows them to be competitive in almost any situation from a product and benefit standpoint.
Benefits of becoming an independent insurance agent
There are a number of benefits for an independent agent over a captive one. First, as mentioned above, is the ability to offer multiple companies. The second major advantage is that the agent owns their own book of business and can get the full commission payout. This is the case even if the agent is working with an up line agency, sometimes called an FMO “Field Marketing Organization”. Other benefits are the schedule flexibility and the ability to write off a number of expenses that would not be possible as a w-2 employee.
There are also some negatives to being independent. The main concern can be the lack of direction. Since the agent is working as their own business, it can be difficult to get all the answers they need. The other is that no-one is telling them when they should or should not be working. As a result, a independent agent needs to be motivated and disciplined. There are a number of tools an agent will need to in order to operate efficiently. Some to consider would be…
- Access to contracts with the competitive companies
- Ability to quote the various plans without the need to go to each companies sites for quotes
- Application processing for paper apps and access to electronic online enrollment
- Guidance on compliance
- Maintaining insurance licenses and keeping them in good order
- Marketing and finding ways to get in front of enough prospects to make sales
- Sales and product training
Decide which type of plans you will sell
There are a number of types of insurance that can be offered. Some agents will focus on just one type of products while other will offer multiple or all of them. Ideally, it is great to cross sell multiple lines of business and get the most out of each opportunity. The challenges of doing so are the need for multiple licenses and trying to keep up with all the rules, rates and benefits for multiple product types. Common product types sold are listed below: Some product types compliment each other very well and are easy to cross sell.
- Property and Casualty Insurance “P & C Insurance”- Home, auto and commercial- Need to have a P & C license to sell this product type
- Life insurance- Many types such as Term, Universal Life, IUL, Whole Life and Variable Life. Final Expense is also a life product
- Life insurance can be sold with a Life license
- Medicare- Medicare is the hottest product being offered today. Agents need a Health license in order to sell it.
- Annuities– Various types such as fixed MYGA’s, Indexed and variable
- LTC– Long Term Care sales are historically low compared to 10 and 20 years ago but it still can be offered
- Health Insurance- Either through the exchange (ACA state offerings) or direct with a company. Individual and group policies
- Health share plans- Alternative to health insurance
- Vision, Dental and indemnity products
Get an insurance license – Take the insurance exam
Most states require you to take a pre-licensing class or exam. In many states it is possible to study and take the exam online but a witness/proctor may be required. Once the pre-licensing exam is taken, the official state licensing exam needs to be scheduled. Exams are proctored by different companies in a number of states. You need to have the proof of the completed pre-licensing course and identification in order to take the exam. You will find out immediately if you have passed or failed after taking the test. After passing the test, all licensing requirements are sent to the state to apply for an insurance license.
Getting insurance company contracts
Agents will need to contract with the insurance companies they want to offer. Some product types will require certifications in addition to contracting in order to get started. An up-line agency or FMO can assist with finding the best/most competitive carriers in a given area. Most companies will also require the agent to have E and O insurance in order to apply for a contract. Crowe and Associates gives agents access to a quote site which they can use to find the most competitive carriers in their area. CLICK HERE FOR ACCESS TO A WEBINAR ON USING THE SITE
Ready to get contracted? CLICK HERE FOR CONTRACTING KIT
Marketing and prospecting
The biggest challenge with any insurance agent is how to get in front of enough qualified prospects. Agents can have a great sales strategy and know all the lowest cost or best fitting products. That will not matter however if they are not able to get in front of enough qualified prospects. As a result, it will be important to have a marketing and prospecting strategy. Regardless of the products the agent offers they still need to implement a strategy to be successful. There are a number of strategies that have proven to work for independent agents. The ones that work best will depend on the agents interest and skill set.
Have a business plan
As an independent agent, it is vitally important to have a plan for your business. Too many agents start the business without setting goals and expectations. They fail to come up with a game plan of what they need to do on a daily basis to be successful. As a result, many agents have a lack of direction and purpose when trying to be in business for themselves. Before you get started it is important to plan. Here are some of the things that need to be considered:
- How much time per day will you spend prospecting
- What is your prospecting game plan
- Come up with the minimum amount of revenue that will be needed to succeed in the early stages
- How many sales do you need to make a daily basis to hit your revenue goals
- How many appointments do you need to generate the needed amount of sales to hit your revenue goal
- Who can you build relationships with to help you generate more leads
- How will you access all the tools you need to run the business
Take the time to plan out your business plan and then execute it on a daily basis. Avoid the trap of spending your day doing activities that are not essential to success.
How to become an independent insurance agent – Call us for guidance and help getting started
We work with new agents on a daily basis to help them get started as an independent agent. We can provide access to the training and support a new agent will need in order to get through the growing pains of working on their own. Our technology and support such as our free lead and marketing program, application processing, online enrollment, online quote engine and marketing best practices have been proven to help new agents. Call us today to get started.