Insurance Sales Agents

Summary

What Insurance Sales Agents Do About this section

Insurance sales agents commonly sell one or more types of insurance, such as property and casualty, life, health, and long-term care.

Insurance sales agents contact potential customers and sell one or more types of insurance. Insurance sales agents explain various insurance policies and help clients choose plans that suit them.

Duties

Insurance sales agents typically do the following:

• Call potential clients in order to expand their own customer base
• Interview prospective clients to get information about their financial resources and discuss existing coverage
• Explain the features of various policies
• Analyze clients’ current insurance policies and suggest additions or other changes
• Customize insurance programs to suit individual clients
• Handle policy renewals
• Maintain electronic and paper records

Insurance sales agents commonly sell one or more types of insurance, such as property and casualty, life, health, and long-term care insurance.

Property and casualty insurance agents sell policies that protect people and businesses from financial loss resulting from automobile accidents, fire, theft, and other events that can damage property. For businesses, property and casualty insurance also covers workers’ compensation claims, product liability claims, or medical malpractice claims.

Life insurance agents specialize in selling policies that pay beneficiaries when a policyholder dies. Life insurance agents also sell annuities that promise a retirement income.

Health and long-term care insurance agents sell policies that cover the costs of medical care and assisted-living services for senior citizens. They also may sell dental insurance and short-term and long-term disability insurance.

Agents may specialize in selling any one of these products or function as generalists providing multiple products.

An increasing number of insurance sales agents offer their clients—especially those approaching retirement—comprehensive financial-planning services, including retirement planning and estate planning. In addition to offering insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This practice is most common with life insurance agents who already sell annuities, but many property and casualty agents also sell financial products.

Many agents spend a lot of time marketing their services and creating their own base of clients. They do this in a variety of ways, including making “cold” sales calls to people who are not current clients.

Potential clients often use comparison shopping tools online to learn about different policies and get information from insurance companies. Clients can either purchase a policy directly from the company’s website or contact the company to speak with a sales agent.

Insurance agents also find new clients through referrals by current clients. Keeping clients happy so that they recommend the agent to others is a key to success for insurance sales agents.

Insurance agents may work for a single insurance company or an insurance brokerage.

Captive agents are insurance sales agents who work exclusively for one insurance company. They can only sell policies provided by the company that employs them.

Independent insurance agents work for insurance brokerages, selling the policies of several companies. They match insurance policies for their clients with the company that offers the best rate and coverage.

Work Environment About this section

Most insurance sales agents work in offices, although some may spend much of their time traveling to meet with clients.

Most insurance sales agents work in offices, although some may spend time traveling to meet with clients.

Work Schedules

Some sales agents meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients. Most agents work full time and some work more than 40 hours per week.

How to Become an Insurance Sales Agent About this section

Agents must be licensed in the states where they plan to work.

Although most employers only require agents to have a high school diploma, many agents have a bachelor’s degree. Agents must be licensed in the states where they work.

Education

A high school diploma is the typical requirement for insurance sales agents, although a bachelor’s degree can improve one’s job prospects. Public-speaking classes can be useful in improving sales techniques, and often agents will have taken courses in business, finance, or economics. Business knowledge is also helpful for sales agents hoping to advance to a managerial position.

Training

Insurance sales agents learn many of their job duties on the job from other agents. Many employers have new agents shadow an experienced agent. This practice allows the new agent to learn how to conduct the company’s business and to understand how the agency interacts with clients.

Because changes in tax laws, government benefits programs, and other state and federal regulations can affect clients’ insurance needs and the way in which agents conduct business, employers often expect agents to take continuing professional education courses. Agents can enhance their selling skills and broaden their knowledge of insurance and other financial services by taking courses at colleges and universities or by attending conferences and seminars sponsored by insurance organizations.

Licenses, Certifications, and Registrations

Insurance sales agents must have a license in the states where they work. Separate licenses are required for agents to sell life and health insurance and property and casualty insurance. In most states, licenses are issued only to applicants who complete specified courses and who pass state exams covering insurance fundamentals and state insurance laws. Most state licensing authorities also require agents to take continuing education courses focusing on insurance laws, consumer protection, ethics, and the technical details of various insurance policies.

As the demand for financial-planning services increases, many agents also choose to get licensed and certified to sell securities and other financial products. Licensing and certification requires substantial study time to pass an additional exam—either the Series 6 or Series 7 licensing exam, both of which are administered by the Financial Industry Regulatory Authority (FINRA). The Series 6 exam is for agents who want to sell only mutual funds and variable annuities. The Series 7 exam is the main FINRA series license, which qualifies agents as general securities sales representatives.

A number of organizations offer certifications that show an agent’s expertise in insurance specialties. These certifications are not required for employment, but they can give job candidates an advantage over other applicants. Certifications also can be a source of continuing education credit. For details on specific designations, contact The Institutes and The American College of Financial Services.

Important Qualities

Analytical skills. Insurance sales agents must evaluate the needs of each client to determine the appropriate insurance policy.

Communication skills. Insurance sales agents must be able to communicate effectively with customers by listening to their requests and suggesting suitable policies.

Initiative. Insurance sales agents need to actively seek out new customers in order to maintain a flow of commissions.

Self-confidence. Insurance sales agents should be confident when making “cold” calls (calls to prospective customers whom they have not contacted before). They must speak clearly and persuasively and maintain their composure if rejected.

Pay About this section

Many independent agents are paid by commission only. Sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways: salary only, salary plus commission, or salary plus bonus.

In general, commissions are the most common form of compensation, especially for experienced agents. The amount of the commission depends on the type and amount of insurance sold and on whether the transaction is a new policy or a renewal. When agents meet their sales goals or when an agency meets its profit goals, agents usually get bonuses. Some agents involved with financial planning receive a fee for their services rather than a commission.

Some sales agents meet with clients during business hours and then spend evenings doing paperwork and preparing presentations to prospective clients. Most agents work full time and some work more than 40 hours per week.

Job Outlook About this section

Overall employment of insurance sales agents is projected to grow $pc.toString().replaceAll("^\-","") percent from 2020 to 2030, $gra.

About $tools.number.format('#,###',$op) openings for insurance sales agents are projected each year, on average, over the decade. Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire.

Employment

Employment of insurance sales agents is projected to grow 10 percent from 2018 to 2028, faster than the average for all occupations.

Because the profitability of insurance companies depends on a steady stream of new customers, the demand for insurance sales agents is expected to continue. Employment growth will likely be strongest for independent sales agents as insurance companies rely more on brokerages and less on captive agents as a way to control costs.

Many clients do their own Internet research and purchase insurance online. This practice somewhat reduces demand for insurance sales agents because many purchases can then be made without an agent’s services. However, agents will still be needed to interact with clients to help them understand their options and choose a policy that is right for them. Many customers lack the time or expertise to study the different types of insurance to decide what they need and will continue to rely on advice from insurance sales agents.

Agencies are also implementing “marketing automation,” a set of software tools that allow agents to maintain contact with their clients more efficiently. Although this is expected to improve insurance sales agents’ productivity, it is not expected to substantially reduce employment demand. Agents will still be needed to reach out to new, prospective clients and sell different insurance policies.

Job Prospects

College graduates who have sales ability, excellent customer-service skills, and expertise in a range of insurance and financial services products are likely to have the best prospects. Multilingual agents may have an advantage, because they can serve a wider customer base. In addition, insurance terminology is often technical, so agents who have a firm understanding of the relevant technical and legal terms also should be desirable to employers.

Many beginning agents fail to earn enough from commissions to meet their income goals. These agents may eventually transfer to other careers. Many job openings are likely to result from the need to replace agents who leave the occupation or retire.

State & Area Data About this section

Occupational Employment and Wage Statistics (OEWS)

The Occupational Employment and Wage Statistics (OEWS) program produces employment and wage estimates annually for over 800 occupations. These estimates are available for the nation as a whole, for individual states, and for metropolitan and nonmetropolitan areas.

Projections Central

Occupational employment projections are developed for all states by Labor Market Information (LMI) or individual state Employment Projections offices. All state projections data are available at www.projectionscentral.com. Information on this site allows projected employment growth for an occupation to be compared among states or to be compared within one state. In addition, states may produce projections for areas; there are links to each state’s websites where these data may be retrieved.

CareerOneStop

CareerOneStop includes hundreds of occupational profiles with data available by state and metro area. There are links in the left-hand side menu to compare occupational employment by state and occupational wages by local area or metro area. There is also a salary info tool to search for wages by zip code.

Contacts for More Information About this section

For more information about insurance sales agents, visit

National Association of Professional Insurance Agents

Insurance Information Institute

For more information about insurance sales agents in the healthcare industry, visit

National Association of Health Underwriters

For more information about certifications, visit

The Institutes

The American College of Financial Services

For more information about securities licensure, visit

Financial Industry Regulatory Authority (FINRA)

Information about insurance sales agent licensure is available from state insurance department websites.