Insurance Agent

 

What Is An Insurance Agent
An insurance agent is basically a salesperson who sells insurance policies. Insurance agents are responsible for building strategies to promote different types of insurance. This can be for the needs of a business or individual. Some agents specialise in specific types of insurance, such as health, property, disability, casualty, automobile, or liability insurance.

Insurance agents sell insurance policies to clients and customers on behalf of insurance carriers and brokerages. It’s important that an agent is familiar with the types of policies their agency sells. This is how they can best help customers determine which policy best suits their needs. Having strong sales, marketing, and customer service skills will help locate and attract potential customers. Note that agents who work for a specific insurance carrier sell policies only from that agency, while those who work for brokerages sell policies from a variety of insurance providers.

Insurance agents may diversify their income by offering financial planning services to clients who are getting ready for retirement or may offer to set up investment or pension plans.

Types Of Agents
Independent agents sell insurance for multiple companies. They look for multiple rates from multiple companies to compare the options. These agents are often referred to as brokers, and they represent the client, not the carrier. The downside of this type of agent is that they often are smaller business owners with limited resources.

Captive agents sell insurance for one specific company. The advantage of being this type of agent is brand recognition to the public and the simplicity of the back-office. Because these type of agents work for a single carrier, they can streamline their processes and develop in-depth underwriting knowledge. However, the challenge can arise if the company does not have competitive rates.

Which Insurance You Want to Sell

One of the first things you want to do is decide what type or types of insurance you’d like to specialise in. Here’s a list of the most common types of insurance:

• Life insurance policies and annuities related to providing for a beneficiary upon the death of the insured.

• Health insurance medical, disability and long-term care policies.

• Property insurance homeowner, commercial property, and inland marine policies.

• Casualty insurance auto, workers compensation, crime coverage, and professional liability policies.

• Personal lines insurance products like auto insurance, homeowners insurance, renters insurance, and policies for boats, motorcycles, and snowmobiles to individual consumers only.
  
  

Requirements

Once you have decided what kind of insurance agent you want to be, the next step is to understand the basic requirements. You do not need a college degree to become an insurance agent. Some agents just have a high school diploma. However, completing a bachelor’s degree in a business-related field can benefit you greatly. It’s worth mentioning that employers prefer to hire insurance agents who have college degrees. Whether you have a college degree or not, all states expect you to complete a pre-licensing training course. You can complete one of these courses in just a few days. Here is a list of basic requirements to become an insurance agent:

• You need to be at least 18 years old.
• You need to complete pre-licensing education for your line of authority.
• You need to pass a background check. This process varies from state to state.
• You need to pass the state insurance licensing exam for your line or lines of authority.
• You need continuing education to keep or renew your license.
  

I’ve mentioned already, that each state has different licensure requirements for insurance agents. However, even within a state, these requirements may vary depending on the type of insurance. To obtain a license to sell insurance, you are mostly required to pay a fee, complete a pre-licensing training course and finally pass a licensing examination. There’s a few states that require license applicants to be sponsored by an employer. Finally, agent licenses must be renewed periodically and maintained by completing continuing education.

Average Salary for Insurance Agents

The salary for insurance agents varies depending on the industry in which the agent is working. The geographic location also has a say in this. The average salary for insurance agents is $80,000 per year. However the salary can range from $18,000 to $186,000 per year. Insurance agents who work for direct health and medical insurance carriers tend to make more than other agents.

Most insurance agents earn money from commissions as a result of selling insurance. Captive agents who work for a single company often receive a commission between 5% and 10% of the value of the policies they sell.

Obtaining Licensure

Every state has its own requirements for obtaining licensing. Hence, it’s important that you check the license requirements in your state before you choose your training course. The type of course you choose will depend on your field of specialty. Do not skip this part. Do the research. You are generally required to have a license for each category in which you plan to sell policies. You may also be required to complete classroom training or conduct a self-study. You may even be required to give fingerprints and submit information for a background check.

As each state regulates its own insurance licensing process each state’s regulations or rules are slightly different. Check with the department of insurance in that state for the rules. The state bodies that regulate insurance have different names, so go to the official website of the state and search for the insurance licensing rules. Most state insurance websites are quite helpful and often have guidebooks you can download and read to get all the information you need to become an insurance agent in their state. Each state website will also list what kind of continuing education you need to keep or renew your license.


Apply an Insurance Agency

So, now that you’ve done your research and know what you want to do, it’s time to get out there. Get the hours of education required by the state and agency of your choice. Take the exams and pass. Armed with a license and the know how, you are ready for an exciting and rewarding career as an insurance agent.