Life insurance sales can be a challenging profession, but it can also be financially and personally rewarding. Diverse people from a wide range of backgrounds can be successful in the field. If you’ve been looking for a career where you can set your own hours and interact with many people, life insurance sales will allow you to do both.
Still, it’s not a race for everyone, and it’s good to be informed before you jump in. In this article, we’ll cover what it takes to be successful in selling life insurance. You’ll learn some of the positive aspects of life insurance sales, as well as the challenges that are part of the profession.
How much money can you make selling life insurance?
The median salary for life insurance agents in 2020 was $52,180, while the top 10% of agents earned more than $127,840 during that time.
With such high potential earnings, it makes sense that so many people gravitate toward this career. however, it is imperative to understand that those gains are directly dependent on individual performance.
Is selling life insurance a good career?
Before you start selling life insurance, it’s a good idea to consider the type of work you’ll be doing. Selling life insurance can be an amazing career, but first you need to consider how comfortable you are with some of the unique aspects of the profession.
benefits of selling life insurance
There are many positives to a career in life insurance sales. here are some.
low barrier to entry
Life insurance salespeople come from a wide range of backgrounds and there are no specific educational requirements beyond a high school diploma. You can become certified and licensed to sell life insurance without completing a degree program. Requirements vary by state, but getting licensed and certified usually only takes a few weeks or months at most.
Life insurance sales is not a typical nine to five job. you need to be available when your customers and prospects are available. often that means you can take off during the day and meet with a client at night or on the weekend.
Life insurance has been around since Roman times, and the first life insurance companies in the US. uu. It began during the 1700s. As the population grows, so does the field of life insurance. according to the usa Bureau of Labor Statistics, the number of insurance sales agents will grow 7% annually between 2020 and 2030.
Because the purchase of a life insurance policy is usually a long-term commitment, the commission for life insurance agents is much higher than for other types of insurance. Agents can earn up to 100% of premiums for the first year of a life insurance policy, before dropping to more standard rates of around 5%.
Because life insurance policyholders tend to favor annual renewals, ongoing commissions can become a form of passive income for agents. You still need to work to maintain relationships and encourage ongoing renewals, but these ongoing commissions can add up to ongoing income.
challenges of selling life insurance
Before starting a career in life insurance, it’s also important to consider some disadvantages.
a commission-based career
Life insurance agents make their living on commission. That means the starting salary isn’t as high as other jobs, and your main income is based on commissions from the policies you sell. Profits from life insurance sales grow over time, but it can take a while to get going.
it is not an administrative job
Successful agents are able to communicate effectively with potential clients, in person, over the phone, or online. If you have trouble asking others to complete financial transactions or make commitments, life insurance sales could be a challenge for you.
search for potential clients
When selling life insurance, you are responsible for finding leads and converting them into sales. Since your compensation depends on commissions, the more leads you can locate and convert, the more money you’ll earn. the reverse is also true.
Life insurance benefits are paid when the subscriber dies, so you’ll need to be able to ask clients questions like “if you died tomorrow, would your family be able to pay your bills and continue your lifestyle?” Not everyone finds it easy to be so direct with others when discussing a difficult and emotional subject.
communication skills are essential
You will work with a variety of people on the filing of life insurance policies. If you don’t have good communication skills, or at least aren’t willing to develop them, life insurance sales may not be a fruitful career for you.
types of life insurance products to sell
When you’re considering a career in life insurance sales, it helps to know the products you’ll be selling. These are some of the most common types of life insurance products.
term life insurance
This is the most common type of life insurance and is popular due to its simplicity and low premiums. Term policies pay only if the policyholder dies during the policy period (usually 20 or 30 years) and offer no cash value otherwise. These policies are ideal for young, healthy buyers who can get affordable rates and use the savings to invest in other financial securities.
whole life insurance
Also known as permanent life insurance, whole life policies never expire. They pay each time the policyholder dies, regardless of age, and build cash value over time. they come in various forms, such as universe life or variable universe life, but they all work essentially the same way. The insurance company invests a portion of the annual premiums, and this investment produces cash value that the policyholder can tap into when needed.
These policies are ideal for clients who don’t like the idea of receiving only one benefit if they die, but they are much more expensive than term policies.
final expense life insurance
Final expense life insurance is a type of whole life policy that is designed to cover funeral costs and burial expenses when you die. it is less expensive than other whole life insurance policies because it covers a much smaller amount. is an excellent option for policyholders who want to supplement their existing coverage to ensure that these final expenses do not affect their beneficiary’s payments.
mortgage protection life insurance
This type of coverage is designed to protect the policyholder’s family from the burden of paying a mortgage if they die prematurely. Unlike other types of life insurance, the beneficiary is actually the lienholder, not family members. if the policyholder dies, the policy would pay off the remaining mortgage balance, relieving the family of any future monthly payments or liabilities. This coverage is ideal for someone who is underinsured and cannot afford more life insurance due to poor health scores.
indexed universal life insurance
Another form of permanent life insurance, indexed universal life insurance offers the most flexibility as an investment product. yields are based on the chosen stock index and may be higher than other whole life policies. however, that potential return also comes with increased risk. These products are best suited for policyholders who want to be actively involved and treat their life insurance as an important part of their investment portfolio.
other types of life insurance
These are just a few of the main types of life insurance you can sell. Within the broad categories of term and whole life insurance, there are many different types of policies to consider. Group life insurance policies are also a great way to boost your sales success. there is a policy to suit any type of potential client you work with during your career as an agent.
how to start selling life insurance
If you want to sell life insurance, the first thing you should do is familiarize yourself with the rules and regulations. study and learn the license information in your state or in other states where you want to sell, and pass the license exam. The life insurance license exam can be challenging, but with study and effort, you can be successful. Not all states publish insurance exam results, but you can view the pass rates for different exams and states by visiting the National Association of Insurance Commissioners (NAIC) website.
another initial step is to request and receive a npn (national producer number) through the national registry of insurance producers. an npn number is essential for selling life insurance. Fortunately, companies that hire people to sell life insurance have experience helping prospective sellers through the exam, licensing, and registration process.
Other steps to start selling life insurance are less formal. for example:
- prepare yourself for rejection, possibly a lot. potential clients can be contacted many times a day with sales leads, and discuss the reasons why people need life insurance it can be uncomfortable.
- work on your relationship skills. when someone decides to buy life insurance, part of their decision will be based on the product, but much of their decision will be based on their Trust and trust you as a seller. Get the strongest start you can by developing your relationship and communication skills.
- Find a mentor. Working with a successful mentor in the industry can help a lot when you’re just starting out. a mentor can give you a good idea of how to start conversations with prospects and how to close sales.
The best sales tips for new life insurance agents
If you have chosen to become a life insurance agent, you have chosen a challenging and rewarding career. There are many different tips to help you get off to a successful start and grow your career. we’ve rounded up some of the most important ones to help you get started.
tip #1: specialize in one product
Insurance agents tend to be more successful when they master a few products up front rather than trying to be jacks of all trades. Mastering a product means knowing more about it than your competition and providing customers with valuable information and advice about that product.
Learn more about the various types of life insurance we cover above, as well as the many subtypes you can sell. Pick one or two that fit your passions and your target market. you can always add more as you become successful. Keep in mind, too, that life insurance also has different levels of clients in the market, from entry-level to mid-level, elite or high-end policies and clients.
Tip #2: Understand your target market
Once you’ve chosen your area(s) of expertise, it’s time to complete one of the most important life insurance sales tips: study your target market. understand their challenges, goals, and how your product can help them.
For example, term life insurance is most prevalent for people ages 25 to 45 who are making their way through key life events. This is typically the age group that buys houses, gets married, builds families, and saves for kids’ college funds. they generally have a lower net worth than older age groups and a higher debt-to-income ratio.
Knowing these facts can help you understand the market on a more personal level. it is quite easy to see that many people in this age group worry about what would happen to their families if they passed away. a wife and mother of three, for example, is probably worried that her family would be able to stay in her home and pay the bills if she lost her income.
As such, you’re probably looking to make sure your spouse has everything they need to take care of these things. insight makes it much easier to determine the needs of your target market and help find possible solutions.
Tip #3: Learn through real-life experience
Every time you start a new job and take training, you have the opportunity to ask questions. Unfortunately, it’s common to have few or no questions during training, as it can be challenging to stay on top of your knowledge gaps until they emerge in practice.
For example, if you were to start a job as a waitress in a restaurant, you might think of a few questions during the training. however, you probably won’t think about the ingredients in a particular dish until a customer asks about them.
The same thing happens with the sale of life insurance. You can read all the books and training materials you can get your hands on, but they won’t teach you much. much of your knowledge will only come from experience.
Don’t think you need to learn everything before you hit the field. Gather as much knowledge as you can from your available materials, but know that every day is a learning experience.
tip #4: be strategic
Think about how you can promote your products and yourself as a life insurance agent. this can also help you determine your strongest area of expertise and how to prioritize prospects.
The field of life insurance is complex, but it also rewards experience and commitment. As you gain experience and knowledge, you can develop a specialized focus on specific products or customer demographics. Not only will this help you narrow down your leads, but it will also help you be more effective at closing sales and introducing products to customers.
tip #5: be consistent
It is important to constantly prospect. You won’t sell to every prospect you meet, but the more you prospect, the more you’ll sell. Try these tips to help:
Determine whether you want to sell life insurance full-time or part-time. This decision will affect everything from the number of leads you generate to the number of people you meet with on a regular basis.
Set a goal for a specific number of sales presentations per week. Full-time life insurance agents should aim to complete 10-15 filings per week. part-time agents might aim to complete five to seven each week.
sell to large markets for many sales opportunities. it’s hard to complete 10-15 submissions each week if you don’t have a big enough market. choose mass market products like term life insurance or final expense life insurance.
tip #6: have a strong work ethic
We’ve all heard the saying “hard work pays off.” When it comes to selling life insurance, successful salespeople focus on a strong work ethic, setting goals, and sticking to a tight schedule. Writing out your own expectations of yourself in the form of a business plan can help you identify the steps you need to take to meet your work and productivity goals selling life insurance.
Tip #7: Seek continuing education
Life insurance may seem simple, but the field is changing fast. It’s important to stay on top of industry trends and understand the different products you specialize in and can offer customers.
There are also other factors to consider when working with your potential clients and presenting policy alternatives. Your ability to understand the issues your clients face in their daily lives, as well as the concerns they may have about their family’s future, could be the key to making a sale and increasing your profits as a life insurance agent.
tip #8: know your product
You must have knowledge of the life insurance products you sell to be effective in a sales presentation. Thoroughly review all policy options and be prepared for any questions the customer may have.
For example, be prepared to explain all the different types of term and permanent life insurance and what the pros and cons of each type are.
Some discussion points include the costs and benefits of term and permanent life insurance policies. For example, term life insurance is less expensive, while permanent life insurance can be more expensive, but also provides cash value.
You can also emphasize the benefits for young couples of purchasing life insurance while they are young and healthy and qualify for cheaper life insurance premiums.
tip #9: consider tools to help you grow your business
In addition to a lead generation partner, there are several other tools you should consider to set yourself up for success. these include:
- a customer relationship management (crm) system to keep track of your leads and clients and manage your book of business
- a website to promote yourself and its products
- life insurance quick estimate tools that will allow you to quickly create and modify quotes based on the needs of your clients. client
- a hippa authorization form for clients to ensure they maintain hipaa compliance with the release of health-related information
tip #10: know your customers
Invest some time in getting to know your clients and their goals so you can present the ideal insurance options that fit their unique circumstances.
Next, conduct a needs analysis to determine how much life insurance your client needs to reach their goals. Once your clients realize that you care about their future and develop a long-term relationship, they will begin to trust you and be more likely to purchase your life insurance products.
tip #11: build trust and relationships
As with any type of sales, relationships are critical to your success as an agent. Life insurance deals with a sensitive area of people’s lives. That makes it even more important to build strong relationships and trust with your prospects and customers.
If someone feels like you care more about getting a commission than your family’s needs, they’ll quickly lose interest in your life insurance sales pitch. focus on getting to know them, their concerns about your family’s financial future, and finding the right product to meet your needs.
Reviewing the client’s personal life insurance goals will build trust, which is a vital part of the agent-client relationship. If your client trusts you, you have already won half the battle.
As you build strong relationships, you open the door to more opportunities with that client in the future and increase the likelihood that they will refer you to others.
tip #12: sell solutions
As a life insurance salesperson, you develop problem-solving skills. People often come to you with concerns about the well-being and financial stability of their families. you can provide solutions to their problems.
When a customer expresses concern, introduce them to your life insurance products as well as the answers to their financial hardship. If prospects perceive life insurance as a way to help them solve a problem, you improve your chances of selling them a life insurance policy.
Tip #13: Thoroughly explain options and premium costs
When making your sales presentation, consider how much life insurance your client can afford. Not everyone is in the same financial situation. Don’t pressure a prospect to buy a life insurance policy that’s out of their reach. You’re not doing your client any favors.
That client may have money problems in the future and you will not be viewed favorably for putting them in a financial bind. Life insurance is available in many different varieties, and there is a policy available to fit every type of family budget and financial situation.
tip #14: highlight benefits with a visual presentation
People remember presentations better if you include visuals, like charts showing costs or a featured policy benefits page. If your clients see and hear your presentation, it helps them understand it better and stays with them long after the meeting is over.
Don’t be surprised to find that including visual aids in your life insurance sales presentations helps you close more sales.
tip #15: practice your presentations
There’s no shame in making a practice of your sales presentation. Your presentation should be smooth and flow naturally, though you don’t want it to sound rehearsed. stand in front of a mirror and take note of your facial expressions. you want to appear friendly, confident and well prepared.
Taking a video recording of yourself is a great way to see yourself the way customers see you. review the video and work on any points in the presentation that need improvement. Just remember, you still need to be prepared to change your presentation based on customer concerns and questions.
Tip #16: Prepare to overcome objections
Overcoming objections can take some getting used to, but it’s an important part of your life insurance sales presentation.
It is important to stay relaxed and respond naturally when an objection is raised. keep your tone of voice even and respond confidently with information that can change the prospect’s negative perception to a positive one.
The most important thing about an objection is to recognize it. Once you’ve given your best answer, ask the customer if they have any additional questions and do your best to answer each objection in the same calm and confident manner.
tip #17: ask the right questions
The only way to know what a customer hopes to gain from purchasing life insurance is to ask the right questions. What are the customer’s life goals? Looking for a policy with a cash value option to help with retirement savings?
Once you know what the customer’s goal is and what they expect from a life insurance policy, you can present your life insurance product portfolio that best meets the customer’s needs. Once you present all the options, ask the client if these options will help them meet their goals.
Tip #18: Put down some reading material
You won’t always make a sale on the day of your presentation. potential clients may need some time to think things through and decide which options fit their current situation. Leaving out some reading materials that go over all of your options will help the client make an informed decision.
Be sure to leave your contact information as well, so the customer can call you with any further questions.
tip #19: thank your customers for their time
Your customer’s time is valuable and you should show your appreciation that they agreed to listen to your sales presentation. be respectful of the time allotment scheduled for your presentation and do not overdo it.
Recognizing that you value a client’s time will go a long way in building trust in your professional relationship with them. A small token of appreciation, such as a handwritten thank you card, is a personal touch that will let prospective clients know that you value their time.
tip #20: don’t forget to follow up
According to a global research firm, limra, there has been a steady decline over the last 10 years of employers offering employer-paid group life insurance. With this in mind, that opens the door to more life insurance sales opportunities.
however, to secure the sale, you must never forget the importance of following up after that initial contact with the customer. if you don’t follow up, you show the prospect that other things are more important to you than answering them about their life insurance purchase.
All it takes is a simple call to ask if the customer has any questions to help you make the sale.
Tip #21: Have a constant stream of new leads
When it comes to being a successful life insurance agent, the biggest challenge is lead generation. There are several steps you can take to find quality leads:
do your own marketing
You can create a website for yourself or your agency and take advantage of various marketing strategies to help generate more life insurance leads, but it takes a lot of work.
Making this effort is worth it, and establishing a converting website should be part of your lead generation plan. however, building the website, getting your marketing channels to drive quality traffic, and building a following takes time. you probably won’t see the results of this effort for a while.
ask for references
Another useful way to generate leads is to communicate with your existing customers. You can ask them for references (friends and family) who could benefit from using the life insurance products you sell.
It’s also important to remember that the needs of your current customers will adapt as their lives change. While they may have needed term life insurance when you started doing business, you can visit them again later to discuss the benefits of switching to a whole life plan.
work for an insurance company
Many life insurance companies provide leads to their agents. this can be useful, but it also comes at a price: a lower commission. the company takes some of the money you earn in exchange for giving you the initiative in the first place.
join insurance as an independent agent
If you prefer to be self-employed but would benefit from strong support, especially when you’re just starting out, consider working as an independent life insurance agent for security.
The insurance platform allows you to sell life insurance when, where and how you want. With the warranty, you’ll have access to the warranty’s team of user engagement specialists to help you resolve issues like carrier issues, and you’ll never have to figure things out on your own.
You’ll also have access to a wide variety of training sessions available each week to further your knowledge and skills in selling life insurance. Assurance will also assign you a dedicated sales manager who will work closely with you to help you achieve your sales goals.
and, most importantly, security will free you from the pressure of having to get your own leads. instead, the guarantee sends you pre-qualified life insurance leads. With insurance leads, you’ll speak directly to people who have already expressed an interest in finding life insurance coverage.
These leads cost you nothing; you don’t have to worry about paying for marketing or other limits on your earning potential. Instead, you can focus entirely on what you do best, and that’s selling life insurance. learn more about how to sell on the collateral platform.
buy your leads
Following each of the tips above can bring you benefits, but maybe you’d rather not work through someone else’s platform or need time to get your website and marketing up and running. If you need help getting started on your own, consider purchasing life insurance prospectuses.
Buying leads is a great option for agents who are less enthusiastic about marketing and networking or simply looking to grow their book of business without consuming too much of their valuable time.
start growing your life insurance business today
During the course of selling life insurance, you’ll meet a wide variety of people. Everyone’s situation is different, but they all share one thing: All of your prospects are interested in using life insurance to protect their loved ones and valuables. You may be surprised that most Americans realize the value of a life insurance policy.
And if you don’t have time to spend on marketing and nurturing leads, Nectar can provide you with qualified life insurance leads who are eager to buy life insurance from you. We will only send you leads that meet your chosen criteria. This way, you can start growing your insurance business right away.