Insurance Sales Agents Overview
Insurance sales agents offer insurance policies, sell mutual funds, securities and annuities. They also offer financial planning services, such as estate or retirement planning services. Most insurance sales agents need to obtain licensure from the State where they operate. In addition to licensure, many insurance sales agents have an associates or bachelors degree in finance, economics or business. College graduates who have sales experience and expertise in insurance and financial services should enjoy the best opportunities.
Nature of the Work for Insurance Sales Agents
In the insurance business, insurance sales agents are often referred to as “producers.” They are usually the first person in the company that a client has contact with as they devise insurance packages specifically catered towards each individuals needs. They sell a variety of insurance such as life, disability, casualty, health and long-term care. Those who work in property and casualty sell insurance that protects people and business from financial loss that stems from fire, storms, theft, automobile accidents and other occurrences that can damage a property. At a business, insurance may cover product liability claims, medical malpractice claims or injured workers’ compensation.
When a policy holder dies, life insurance agents pay beneficiaries to designated persons. Agents who sell health insurance policies cover the cost of medical care and loss of income during an injury or illness. Health insurance agents also sell dental care, which provides similar coverage to medical care. An insurance sales agent may specialize in one department or become a generalist and provide many different types of coverage to a client.
Insurance agents who give advice to their clients about decreasing risk in addition to providing them with an all-inclusive financial planning services usually also become licensed to sell variable annuities, mutual funds and other securities. Such services they may provide include estate planning, retirement planning and helping businesses establish pension plans.
Writing reports, maintaining records and searching for new clients are also duties held by insurance agents. When a policy holder experiences a loss, agents are assigned to help them settle their insurance claims. Some insurance agents have a contractual agreement with insurance companies and work exclusively for them, while others are independent insurance agents represent many insurance companies, helping their clients find the best rate possible.
Due to advancements in the Internet, making searching for price quotes and completing applications quicker and easier, the insurance business has evolved. Clients are able to take a more active role in selecting their insurance policies, which means insurance sales agents spend less time interacting with clients. For this reason, insurance agents must maintain regular contact with their clients to ensure their needs are being met, as many of their new clients come from referrals.
The use of customer service representatives who are available around the clock to make small changes in policies, process claims and answer questions is growing due to the increased competition in the insurance industry. This gives insurance sales agents the opportunity to cross-sell new products and focus on finding new clients and maintaining relationships with old ones.
Insurance sales agents may work alone or with others, depending on the size of the office. Independent agents, also known as brokers, may spend the majority of their time traveling to close sales, investigate claims or meet with clients. Many agents create their own schedule and sometimes set meetings for evenings or weekends to adapt to the clients needs. Many agents work a standard 40-hour workweek, however some work much longer.
Training, Other Qualifications and Advancement for Insurance Sales Agents
Most companies prefer to hire insurance sales agents who hold an associates degree or bachelors degree in economics, finance or business. If a high school graduate has experience in sales, they may be hired as an insurance sales agent. Some insurance agents receive on-the-job training from other agents, learning how to conduct business and how the agency interacts with clients.
There are many courses on insurance offered at colleges and universities, and a small number offer bachelors degrees in insurance. Other college courses an individual should pursue are in mathematics, accounting, finance, business law, economics, business administration and marketing. These courses, in addition to courses in sociology, public speaking and psychology help a student understand the fundamentals of the insurance industry, as well as improve sales techniques.
Continuing education is becoming more important as the diversity of financial products expands. Insurance agents must remain informed on issues that concern their clients, such as changes in government benefit programs, tax laws and other State and Federal regulations. Some agents may choose to take courses at a college or university on insurance and financial services or attend conferences and seminars sponsored by insurance organizations.
Insurance sales agents are required to obtain a license in the State in which they work. They must obtain separate licenses in order to sell health and life insurance and property and casualty insurance. Some States require applicants to pass specific prelicensing courses or pass State examinations that cover State insurance laws and the basics of insurance. Some also have mandatory continuing education requirements every two years.
Many insurance sales agents are gaining proper licensure and certification to sell securities and other financial products. This requires a large amount of studying to pass the examination administered by the National Association of Securities Dealers (NASD). The Series 6 exam is made for insurance sales agents who want to sell only mutual funds, while the Series 7 exam is the main NASD exam that qualifies them to be general securities sales representatives.
Prior experience in sales or insurance jobs is useful, and this is why many insurance sales agents are older than most other entrants. They must also be enthusiastic, disciplines, hard working, flexible and willing to solve problems. Excellent communication skills are required to promote confidence in their customers. Insurance sales agents must have good time-management skills because they often work unsupervised.
Many organizations offer professional certification programs for insurance sales agents who wish to specialize in a specific area. Certification is not necessary, but it instills confidence in clients and employers that the insurance sales agent has extensive knowledge on their specialty. Those who complete certification usually must complete a certain number of hours of continue education. The National Alliance for Insurance Education and Research offers many different designations for insurance agents.
Insurance sales agents who also help clients with financial planning may obtain certification from the Certified Financial Planner Board of Standards, which offers the Certified Financial Planner designation. Or, they may choose to earn the Chartered Financial Consultant (ChFC) or the Chartered Life Underwriters (CLU) credential, which are offered by the American College in Bryn Mawr, Pennsylvania. Beginning insurance sales agents may take an introductory course teaching insurance fundamentals called the Life Underwriter Training Council Fellow (FUTCF), also offered by the American College. In addition, property and casualty insurance sales agents may earn the Chartered Property Casualty Underwriter (CPCU) title provided by the American Institute for Chartered Property Casualty Underwriter. Each certification has its own requirements for obtainment, but most require passing an examination and taking specific courses. Most have continuing education requirements.
To advance in this career, many insurance sales agents who show leadership ability become a sales manager in a local office. Some move up to executive or managerial positions. Those who have an established client base may remain in sales work, while others may open their own independent agencies or brokerage firms.
Top 10 Most Popular Insurance Schools
1. Columbus Technical College (Columbus, Georgia)
2. University of Georgia (Athens, Georgia)
3. Georgia State University (Atlanta, Georgia)
4. Mississippi State University (Mississippi State, Mississippi)
5. Temple University (Philadelphia, Pennsylvania)
6. University of Mississippi (University, Mississippi)
7. Boston University (Boston, Massachusetts)
8. Walden University, Minneapolis (Minneapolis, Minnesota)
9. Florida State University (Tallahassee, Florida)
10. Illinois State University (Normal, Illinois)
See All Insurance Schools
Employment and Job Outlook for Insurance Sales Agents
Number of People in Profession
Changing Employment (2008-2018)
Employment is projected to grow about as fast as average (increase 7 - 13%).
About 51 percent of the 325,710 jobs held by insurance sales agents are found in insurance agencies and brokerages. Another 21 percent work directly for insurance carriers. The majority of insurance sales agents work specialize in one type of insurance, while others offer a variety of insurance policies. A few insurance sales agents work for banks and securities brokerages. Close to 21 percent of all agents own their own agencies.
Insurance sales agents should expect an employment growth of 12 percent over the next decade, which is as fast as average for all occupations, which is about as fast as average for all occupations. Demand for health insurance and long-term-car insurance should expect to increase significantly as the population ages. The expanding population will also add to the demand for insurance for homes and automobiles. As new businesses are established and older ones increase their coverage, more insurance sales agents will be needed.
Many insurance agencies are cutting costs by laying off the agents that work solely for a particular insurance carrier and are beginning to rely more heavily on independent agents and brokers. Most likely, the Internet will not affect insurance sales agents positions because clients prefer to have personal contact with their agents.
Those with an associate or bachelors degree with excellent sales ability and interpersonal skills should expect the best job opportunities. Multilingual agents and those who have a firm grasp on technical insurance language are desirable to employers. Many job openings will come from those who retire or leave the industry for other reasons.
Competition should be expected from traditional securities brokers and bankers who also sell insurance policies.
Independent agents who incorporate new technology into their established business will continue to be competitive. For example, those who use the Internet to touch base with a broader client base and offer better customer service will have a competitive edge over those who do not.
Earnings and Salary for Insurance Sales Agents
The median annual wage of wage and salary insurance agents is $45,500. The highest 10 percent earn more than $114,910, while the lowest 10 percent earn less than $25,800. The median annual wages for top employing industries of insurance sales agents is $48,150 for insurance carriers and $44,450 for brokerages, agencies and other insurance related activities.
Most independent agents are paid commission only, however workers who are employed at an agency or insurance carrier may be paid by salary only, salary plus commission or salary plus bonuses. Many receive company-paid benefits such as continuing education, training, office space, clerical support services and group insurance.
Annual Salary for Insurance Sales Agents
On average, Insurance Sales Agents earn $45,500 per year.
Source: Bureau of Labor Statistics Occupational Outlook Handbook