Looking for a career that offers a big potential financial upside, a wealth of job opportunity, and the lure of self-employment? If you enjoy forging relationships and are committed to client service (and can handle plenty of rejection), insurance sales could well be for you.
Insurance sales may be the ultimate commission gig, with its practitioners fully dependent on their customers' premium payments. Convert more prospects. Get correspondingly richer. Repeat. At least in theory.
- Being an insurance salesperson is the ultimate commission gig; practitioners are wholly dependent on their customers’ premium payments.
- Insurance sales typically don't pay very well at first, but unlike those other occupations, the longer you stick around in insurance, the more income you make.
- The best agents are the ones with the most and most respected designations, like a chartered life underwriter.
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Selling Life Insurance Is Slow-Going... at First
Like retail, customer service, and similar lines of work with high attrition rates, insurance sales typically don't pay all that well at the onset of one’s career. However, unlike those other occupations, the longer you stick around in insurance, the easier and more remunerative it gets, thanks to referrals and residuals.
It’s the sticking around that’s the hard part. According to PayScale, the average base salary for entry-level insurance agents is $35,564—not including any additional bonuses, commissions, and profit sharing—and you may not move up on the pay chart until mid-career.
Plenty of Opportunities
If you're serious about selling life insurance for a living, here’s one positive. It’s a job seeker's market. Major insurers have watched their workforces dwindle from their late 20th century zeniths, with some agencies going from having tens of thousands of agents on the payroll to having merely a couple thousand.
Things changed with the advent of the Internet. Today's life insurance agents, though far fewer in number than they were a generation ago, thus have to specialize more than ever.
There might not be any sign in the window, but the agencies are hiring and will most likely consider you regardless of what line of work you were in before. It may cost money for an insurance company to train a new agent, but it’s still cheaper than paying a salary for what is, again, a position that relies almost exclusively on commission once the training period ends.
Be Prepared for Rejection
The actual execution of the job of a life insurance agent can be disheartening, at least at the start. The first lead you contact is going to say no. The second lead is going to say no.
A successful, late-career insurance salesperson could make more than $102,000 in salary, commission, and profit-sharing.
Eventually, after you’ve shadowed the established agents in the office long enough (and have learned the stark differences among whole, term, and universal policies), you make your first sale and garner the majority of the premium for yourself.
However, the returns do diminish. After the first year, the commissions may trickle. Expect to earn 3–5% commission throughout each of the policy's remaining years. Of course, by that time the idea is to have sold enough policies that such a small percentage represents a comfortable dollar figure. But the rejection a rookie agent has to deal with is overwhelming. The agents who have the wherewithal, the patience, and the resources to ride out the unproductive stretches are the successful ones, without exception.
Hitting the Books
The best agents are the ones with the most and most respected designations—chartered life underwriter; fellow, those with a certificate from the Life Management Institute, and certified insurance counselor. Dozens of hours of study and instruction, followed by an exam, separate the less committed and less ambitious life insurance agents from the ones truly devoted to the career. Combine flawless ethics with real-world education—and a healthy dose of persistence—and there's no reason why you shouldn’t flourish.
The Bottom Line
If entrepreneurship is your goal, there is plenty of opportunity for someone seeking a career in insurance sales. That said, it'll be tough going, especially at first. Agents have to have thick skin and be able to handle rejection. After all, they're all selling the same products, for the most part. So if client service and building relationships aren't your thing, you might want to pass on this particular job.