How to Become An Insurance Agent in 10 Easy Steps

TLTR: If you want to know how to become an insurance agent, this is the place to start. We break down the process in ten easy steps

Are you outgoing, motivated and psychologically resilient? Are you a good speaker and listener who can easily convey passion? According to LinkedIn Pulse, these are all the qualities you need to be a top insurance agent. But you won’t get there on personality alone. Here’s a comprehensive guide that contains every step you need to take to become an insurance agent.

Decide On The Type of Agent You Want To Be

This is the first question you need to ask yourself: Do I want to be a captive agent or an independent agent? The decision you make is important, but not final. You can switch from captive to independent, or vice versa, at any time. But it’s important to understand the difference before going in. Both types have their pros and cons.

Captive agents receive guidance from experienced firms, enjoy the benefits of a stable salary, and score higher reputation points due to their connection with an established company. On the flip side, the ceiling on what they can earn is relatively low. They can only sell one product from one company, and they have to meet sales quotas that are not always realistic.

Independent agents, on the other hand, enjoy flexibility in their business, the potential to earn higher commissions, and the freedom to sell their clients exactly what they need instead of just pushing a single product. But they do face challenges, especially at the start of their careers. Some of these challenges include pushback from big insurance companies, difficulty establishing a good reputation, and the lack of a consistent income.

The type suited best to you depends on a lot of different factors, such as your personality, location, and the type of clients you procure.

Decide On The Type of Insurance You Want To Sell

Along with the type of agent you want to be, deciding on the type of insurance you want to sell is not an unchangeable decision. While choosing one kind won’t stop you from branching out into others, picking your insurance type early on will help you stay focused.

The main types of insurance you can sell are life/health/accident insurance or property and casualty (P&C) insurance. Under P&C, a plethora of niches exist, for example commercial insurance, auto insurance, or wedding insurance. You can go into insurance as a jack of all trades or a master of one. It all depends on your personal goals in insurance as well as if you’ve chosen a captive or independent route.

If you’re having difficulty deciding, think of the type of clients you are more adept to work with. Would you prefer to work with families and individuals or with businesses and organizations?

Figure Out Which License You Need

Once you’ve decided on the type of insurance agent you are going to be and the type(s) of insurance you want to sell, you’re now ready to take action. In order to move forward, you need to obtain an insurance license.

There are different licenses for different purposes. For example, life/health/accident insurance requires a different license that P&C insurance. Remember, license names and requirements vary depending on the state you live in. Also, you might have to obtain multiple licenses depending on your insurance agent goals.

Take The Exam

Insurance License exams aren’t as scary as they sound! Many states require you to take either online or in-person classes to supplement your exam. These classes will already give you some basic preparation. According to Kaplan Financial, the average exam-taker can ace the exam with about 35-40 hours of studying. That’s just four hours on weekdays for two weeks, or two hours on weekdays for a month.

While exams tend to scare people off, remember, with a minimum score of 70% you will be eligible for a license and will never have to retake the test again. It’s an easy tradeoff that just requires a couple of weeks of your dedication.

Note: You need to take individual exams for each line of authority you want to be licensed in.

Submit Your License And Background Check

Depending on what state you’re from, you might be required to do a background check. You will be asked to submit your license and fingerprints for some standard safety measures.

There are certain people who are barred from selling insurance, including first degree felons or people who have committed financial felonies like fraud, embezzlement, or money laundering. That being said, a misdemeanor or bad credit shouldn’t stop you from selling insurance.

Do Some Research On Insurance Companies

Now that you have your license, you’re ready to hit the ground running! But first, make sure you do ample research. Looking into insurance companies is a crucial step in making the career decisions best suited to you and your professional goals.

Look into insurance companies that are currently topping the industry. Also find insurance companies that suit your needs as an agent. Make sure you are well informed about the insurance world before starting to navigate through it.

Get Appointed With An Insurance Company

Your next step after thorough research is getting appointed. You need to be appointed by an insurance company in order to sell their products. This means completing an application and being granted the authority to sell by the company. This step is as important as obtaining a license.

Protect your business with insurance

Just as you “need money to make money,” as the old saying goes, you also need to be insured in order to sell insurance. According to Insureon, the three most important types of insurance for insurance agents include:

• General liability insurance: This protects you from a variety of risks. General liability insurance exists to protect you when accidents occur within the premises of your workspace. This could range from covering the medical bills of a client who slipped on a wet floor and fell, to replacement of damaged property.
• Errors and omissions: Also called E&O insurance, almost all insurance companies require this type of coverage. It protects your clients from human errors commonly made by staff. Common examples of this include typos and accidental deletions.
• Workers’ compensation: This is designed to protect employees. It’s similar to general liability, but it covers lost wages along with medical bills. So, for example, if an employee slips and falls on a wet floor in this instance, they will not have to pay for their recovery and will make back any money they lose during their recovery period. Workers’ compensation insurance is legally required in most states.

Start finding clients

There are tons of different ways to generate leads as an agent. Having strong digital visibility is one of the most cost-efficient ways to do the job. Making a website and also being active on various social media platforms can help you immensely.

According to Investopedia, LinkedIn is particularly efficient for this purpose. A robust and active profile on LinkedIn can make a difference in the quantity and quality of clients that you attract. Facebook and Instagram are also great places to form new connections, especially within your local community.

Signing up for online directories also helps increase your online visibility as an agent. We have a quick and free directory that you can add your listing to today, if you’re interested.

Maintain your clients

Once you start finding clients, you also need to create strategies to maintain your clients. Insurance Blast has a long list of great ideas for ensuring that your customers stay loyal to you. Some of our favorites include:

• Discounts for reviews and referrals: Using referral strategies not only ensures your clients pull in their friends and family members, it also gives them a sense of belonging and increases their loyalty to you.
• Pre-renewal holiday gift baskets: Whether it’s Christmas or a birthday, holiday gift baskets are always a great way to remind your clients you care. Not only will they notice that you spent your own money to make their day a bit more special, they will also notice how thoughtful you were to put in effort that a card simply cannot convey.
• Follow up with claims: Asking your clients about their claims experience is not only kind, but also extremely professional. You get both a sense of output for the customer’s process as well as a chance to make empathetic conversation with your client.
• Make them laugh: Insurance sure can be boring! Lighten it us with a few jokes here and there. You don’t need a full stand-up routine, but always look out for a chance to make your client laugh.

In Conclusion

Follow these 10 steps and you’ll become an insurance agent in no time! It’s not the easiest job out there, but the limitations to entry are few. If you work hard, the potential to earn is unlimited. The best part of being an insurance agent is helping your clients. Not only do you help them reach their financial goals, but you help them to grow confidence in themselves and learn to live risk-free.

If you’re interested in learning more, please check out our insurance blog. We have hundreds of articles written by insurance experts to give you all the information you could possibly need on this industry. If you have any questions or if you have your own tips and tricks, please share them in the comment section below.