Is life insurance a good career path? Selling life insurance isn’t a great job and even more challenging option to sustain a profitable and long-lasting career. Certain industry analysts, such as the job website, Monster.com, report agents who quit within a calendar year. 1
The issues for new life insurance brokers are numerous. The payment is typically direct commission. Finding customers that are qualified for your business isn’t easy and the handful of leads your business may offer you are usually approached by a myriad agencies already.is life insurance a good career path
With these issues it’s not surprising that individuals might wonder if selling life insurance a viable job choice? Because selling life insurance comes with its advantages as well as its negatives it’s possible to answer yes, based on your perspective.
Learn more about the possibilities for an occupation in the field of life insurance.
Pros and Cons
Positively, selling life insurance has some advantages that are difficult to come across in other professions. First the life insurance sales positions are plentiful and easily found. The second reason is that commission rates are extremely high when compared with other insurance sales like health insurance.
Most importantly, life insurance agents receive commissions every year for as long as the sold policy is in effect. This can create an income stream that is passive.
But, even if you find a promising prospect however, the product itself is difficult to market. People are reluctant to talk about the possibility of mortality. Furthermore, unlike a brand-new phone or car life insurance doesn’t offer any of the instant satisfactions which can lead consumers to purchase on impulse.
Many companies will even pay for the expense for obtaining your license, but only after you’ve sold an quantity of the premium.
Difficulty #1 Commission-based Pay
A majority of insurance firms categorize its agents as freelance contractors. They don’t pay salary or benefits. The agent is able to complete a full work week however, if the agent makes no sales in the books, they are not paid any pay.
The benefit of not being considered an employee is that the company is not able to force you to perform to a set schedule, instead you decide your own timetable. However selling life insurance especially in the initial few years, will require for a long time in order to stand a chance to earn a income.
Certain companies offer employees status which includes an unspecified base salary as well as benefits. Agents working for these firms are subject to strict production limits. If you fail to meet their monthly sales target more than more than twice, and you’ll be kicked out of the building.
Difficulty 2: Customer Acquisition
Finding the right life insurance leads is a challenge. Even when you harness the potential online, high-quality leads are difficult to find. Lead vendors are everywhere online however the majority of their leads aren’t exclusive which means they are sold to several agents.
Exclusive leads, if you find them they are extremely expensive in cost. The closing rate, which is how many leads you actually sell must be astonishing to make a profit with exclusive leads. Employers who offer leads usually make you pay a lower percentage of commission.is life insurance a good career path
Because of this, numerous life insurance companies are able to generate business using the old-fashioned method: door-knocking and cold-calling. These strategies are still in use and even today. However, becoming a successful insurance broker is a long-term commitment and a very tough skin.
Third Difficulty The Sales Process
If you are making an attempt to reach the most qualified prospects Don’t assume that you can sell your product easily. It is difficult product to market. Making your prospects admit and talk about the fact that they will die is an extremely difficult first step. Once you have cleared the hurdle, your next step is to create urgency to make them buy immediately.
This is also a challenge because the product doesn’t provide instant satisfaction and leaving without a signed contract almost always results in losing the prospect for ever. The customer may be honest in their claim that they’ll be thinking about it, but odds are they won’t spend the time it takes to think about it after you’ve left the room.
On the flipside of all these challenges there are also benefits.
Benefit #1: Job Prospects
As compared to other finance careers being offered, becoming a life insurance professional is not difficult. There are no requirements for educational qualifications beyond the standard high school diploma in the majority of cases. Certain states require that you undergo a licensing course and pass an exam but in reality, these are just as easy as passing taking a spelling test in fifth grade.
Life insurance jobs are all over the place. It’s no wonder that online job search websites are filled with them. Since the majority of companies offer commission-based compensation with no guarantee of income, they don’t have any incentive to restrict hiring. They provide jobs to everyone interested and hope that a tiny percent of the new hires will become successful agents.
Benefit #2: Possibility for High Salary
Life insurance sales provide the highest commissions in the insurance business but this is contingent on the kind of insurance offered. In the case of auto, insurance agents earn portion of the policy purchased. Life insurance is a different story. You get a portion of the policy once it is sold, you earn a second commission every time it’s renewed.
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The U.S. Bureau of Labor Statistics states that insurance sales professionals have a range of wages. The lowest 10% make an average of $28,000 per year, while those in the upper tier (90 percent) make $125,000. The median salary is close to $51,000 per year.
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Alongside the high commissions, certain life insurance companies also offer their agents a certain amount of commission on the basis of the potential earnings of the agent instead of forcing them to treat the commission as earned, however other companies do not.
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As an example for the basis of a $100 monthly policy that has a six-month advance you’d get an amount of $600 on the day that the policy is approved.
The risk is in the event that the policy is cancelled within the first six months. If that occurs the employer will charge you back the portion that was not earned of the advance.
Third Benefit: Renewal Commissions
The commission you receive from the sale of a life insurance policy is not restricted to the initial year. In fact, you will continue to get money for as much as your policy remains in existence. The percentage of commission you earn on an insurance policy decreases in the initial year however, you still earn between 5% and 10% for as long as the owner pays the monthly fee. This is the income that you passively receive every month without needing to leave the bed.
The majority of life insurance brokers don’t last for a full year in their profession and even less are able to last five years. The ones who do persevere and persevere are, however, greatly rewarded with renewal commissions.
