Become a life insurance agent

Become a life insurance agent

There are only a few industries outside of financial services that have the potential for relatively inexperienced professionals to earn substantial earnings within their first year of employment. And in financial services, few careers offer newcomers the kind of income opportunities a regular life insurance detective does right away. A diligent insurance agent can make more than $100,000 in sales in its first year. 

But success as an insurance agent doesn’t come without a price. It’s a tough field and most players run out of energy quickly. Insurance agents hear the word “no” far more often than the word “yes,” and the word “no ” is expressed with a fair amount of obscene and well-known knocking on doors. It’s not uncommon. Also, many people rate insurance agents poorly: some even equate them with honorable liars. But for those who can live with potential rejection, the salary and flexibility of being a life insurance agent are worth it.

Become an insurance agent


  • A career as a life insurance agent can be lucrative but includes constant nudges, connections, and many examples of being rejected before selling.
  • Life insurance agents may get a small salary to start with but otherwise rely primarily on commissions to make a living.
  • Finding potential customers is difficult and time-consuming; once you’ve tracked them down, it’s even harder to get them to buy.
  • A strong sales background can get you hired; once hired, you must take 25-50 hour courses and pass a state-issued license exam.
  • When looking for a job, make sure you only apply to companies that are well-regarded by rating agencies like Moody’s and Standard & Poors.

Insurance Industry Overview

While there are many types of insurance (from auto insurance to health insurance), the most lucrative careers in the insurance industry are those who sell life insurance. Agents specializing in this area of ​​​​the insurance market help families, businesses, employers, and other parties prevent financial loss in the event of someone’s death.

Insurance agents who sell this type of insurance are either “self-insured” agents, meaning they only sell insurance from one company, or “non-self-insured” agents, meaning they represent multiple insurance companies. 2 Either way, the typical insurance agent will spend most of their time on some type of marketing campaign to identify those who may need new or additional service coverage, provide them with quotes from the companies they represent, and persuade them to sign new insurance contracts.

Typically, a life insurance agent receives 30% to 90% of the policy payment amount (also known as a premium) paid by the client in the first year. 3 In subsequent years, agents can receive anywhere from 3% to 10% of annual premiums, also known as “renewal” or “tracking commissions”; 4 

Let’s look at an example of how a life insurance agent makes money:

Insurance Sales Commission Example

Insurance agent Bob sells Sally a car life insurance policy for the rest of her life (assuming she continues to pay the premiums). Bob’s insurance company pays a 90%/5% commission on the lifetime policy, which means the sales agent receives 90% of the first year’s premium and 5% of future renewals.

This policy costs Sally $100 a month or $1,200 a year. Therefore, in the first year, Bob will receive a commission of $1080 for the sale of this life insurance policy (1200 x 90%). In subsequent years, as long as Sally continues to pay the premium (1200 x 5%), Bob will earn $60 on renewal. At this commission level, an agent selling one to two policies per week can make $50,000 to $100,000 in the first year of the agency.

Life Insurance Agency Qualification

As mentioned earlier, life insurance agents are not a profession for the thin-skinned or the faint-hearted. More than any other factor, including education and experience, a life insurance agent must have a fighting spirit. They must be people who like the thrill of the hunt, who like to snap, and see rejection as a stepping stone to eventual success. A life insurance sales career is not ideal for those who consider themselves introverted, soft-spoken, or afraid of conflict.

The vast majority of life insurance companies have no formal education requirements to become an agent. While many prefer college graduates, this general pattern is often ignored in favor of the “right” candidate. Previous experience in the insurance industry is not required, as most mid-sized and large insurance companies have in-house programs to train their salespeople on the products they are selling.

Working for a reputable insurance company may be easy for a hard-nosed person, but there’s a non-negotiable barrier between a potential insurance agent and their commission: a state license. Insurance agents are currently licensed by the state or states in which they sell insurance. This typically requires passing a state-administered license exam, as well as taking a licensing course that typically runs 25-50 hours.


Life insurance agents’ commissions on sales, if they were only taking commissions, would likely have an income in the first year; this is the highest commission for any type of insurance.

Employed to sell insurance

If you feel life insurance sales is the right career for you, there are a few steps you can take to land your first job. First and foremost, you’ll want to prepare a resume that highlights your entrepreneurial spirit. You’ll want to include anything that shows you’re proactive, whether it’s starting your own business or taking someone else’s business to the next level. A life insurance agent must be motivated and capable of being a self-starter. Resumes with a track record of this behavior will help you succeed.

Once your resume is polished, it’s time to start looking for jobs and applying. You don’t have to feel stressed because working at the wrong company can be exhausting and distracting later in your insurance career. Ideally, you’ll want to work for a well-known company with a solid reputation among consumers, other agencies, and insurance rating agencies.

When deciding where to apply, it’s a good idea to start by visiting the insurance company rating website AM Best, Moody’s, or Standard & Poors. From there, you can build a list of companies rated “A” or higher in your state. These companies typically offer the safest products at reasonable prices, with a focus on compensating and retaining quality agents.

Life insurance agents work hard; most agents work for no more than a year. On the plus side, that means there are constant vacancies and it’s relatively easy to start a job as a new employee.

be sure to follow up

After creating this list, start looking at each company. Due to the high turnover rate of insurance agents, most companies will prominently post their job listings by geographic area, making it easy to find you. When you find a company in your area that seems to match your personality, apply for that position and make sure you follow the directions on the company’s website;

Call once a week until you hear an answer from the other person. Many insurance company recruiters will refuse to interview a potential broker who doesn’t follow up with a phone call first; this is considered a strong indicator of a potential broker’s tenacity. During the interview process, continue to convey your entrepreneurial spirit and “never give up” personality, and most managers hire based on these factors rather than a combination of others.

If you’re lucky enough to get the job, you can expect your first 12 months to be spent handing out tons of business cards and making a lot of phone calls. Your sales manager will be the first to remind you that your only purpose in life is to find potential clients. They care more about how many people you contact each week than how much you know about their product line;

You may struggle financially for the first few months until your first sales commissions start rolling in. While some companies offer paychecks to keep newbies from starving, it’s increasingly rare. Many brokers are now lucky enough to be paid for a month or two of training before “commission only”.

Some caveats

And the life insurance industry is a huge reward for those willing to work hard and put up with plenty of rejections. You need to be aware of two pitfalls. First, you are likely expected to market to your friends and family. While this may be a tempting idea and seems like a great idea to get you started, it can also burn a lot of bridges with people you care about.

Second, you should visit your state insurance commissioner’s website and review the complaint records of the company you are considering working for. You will typically find that insurance companies that maintain ratings below “A” and those that use “A” ratings to sell insurance have higher rates of complaints from the program than larger, more established companies.

Accepting a job at the wrong insurance company can burn you out and ruin your dreams of a promising career. If you want to get into life insurance sales, take your time and wait for the right opportunity with the right company. Doing so will maximize your chances of long-term success.

By aamritri

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