How to Become an Insurance Agent and Build Your Career
Insurance is a part of all of our lives. From automotive to health to homeowner’s insurance, most Americans hold at least one insurance policy.
The insurance industry can provide steady work, great wages, and a good work-life balance. If you’re interested in an insurance career, becoming an insurance agent is one of the most common paths.
Wondering how to become an insurance agent? This guide covers everything you need to know.
What do insurance agents do?
An insurance agent’s primary role is to sell insurance. Agents contact potential customers directly, respond to incoming leads, and close sales for insurance products.
As with any sales position, insurance agents must also explain the different types of products and services they are selling — and help customers choose the best options for them. And since insurance can be somewhat complicated, insurance agents play an important role in helping clients understand what’s available to them.
Insurance agents can also serve as the primary contact point for existing customers. For instance, if you’re an agent who signs up a new customer, that customer might later contact you to file a claim, switch plans, or manage their account.
Agents don’t typically handle the claims process, but they may serve as customer service agents or general liaisons for their clients.
How much do insurance agents earn?
Insurance agents can make good money.
According to data from the Bureau of Labor Statistics (BLS), the mean annual salary for an insurance agent is $76,950, and the mean hourly wage is $37.
However, insurance agent salaries can vary significantly. Some agents are paid a flat salary. Others are offered a salary plus commission. And still others might be 100% commission-based.
Plus, there are insurance agent jobs at existing agencies or brokers — but there are also opportunities to start your own business as an agent.
All of these factors can influence how much you might earn as an insurance agent.
Is becoming an insurance agent right for you?
Before diving into how to become an insurance agent, it’s worth pondering whether this might be a good role for you.
Becoming an insurance agent can be lucrative, particularly for self-starters who are skilled at sales. But it’s not an easy job.
If you’re thinking about becoming an insurance agent, the following skills are helpful:
Communication and interpersonal skills
A friendly demeanor
Attention to detail
Insurance agents must often think like business owners rather than employees. They must hustle to find new leads and land new clients. And they have to constantly make sales in order to keep their income high.
How to become an insurance agent
Let’s explore the steps to becoming an insurance agent, from just getting started to expanding your career as a thriving agent.
1. Explore the different types of insurance agent positions
The first consideration is what type of insurance agent you want to be (and what type of position you’ll seek out).
Captive insurance agent
“Captive” insurance agents typically sell insurance products for one company only. These professionals usually work with large national or international insurance providers, like Progressive, Nationwide, or Liberty Mutual.
Captive insurance agents are often provided training, resources, and support from the insurance provider they represent. In exchange, they typically must sign a non-compete agreement, which prevents the agent from representing another insurance company or selling other insurance products within a certain period.
It’s often easier and faster to become a captive insurance agent — mostly due to the training and resources the big insurers typically provide. On the other hand, the commission rates in these positions can be somewhat lower.
Independent insurance agent
Independent agents can sell insurance products from multiple companies and are not committed to representing any single insurance firm. This means they have more autonomy and freedom to sell a wider variety of insurance products.
While they may potentially earn higher commissions, independent agents typically receive less support from insurers — as well as minimal training.
2. Determine the type(s) of insurance you want to sell
Insurance is a broad category of financial products that includes auto, home, life, business, and other categories of insurance.
Agents may benefit from picking a specialty area or at least deciding whether they want to primarily target business or consumer clients.
Insurance agents typically sell a wide variety of products; however, the licensing, training, and even clientele for these products can differ. Because of this, it’s a good idea to start with a focus area and expand from there.
3. Review state-level insurance licensing requirements
Each state has rules when it comes to who can be an insurance agent, the necessary training, and the license/testing process required. Requirements may also vary by insurance type (for instance, the requirements to sell life insurance might be different than those needed to sell homeowner’s insurance).
In most states, licensing requirements are set by the Insurance Commissioner or a similar office. You can research the details in your state to see which requirements you’ll need to fulfill.
4. Take the insurance license exam
Most states require some sort of exam to be passed to receive licensing to become an insurance agent. Again, the requirements vary, so check with your state government for details.
Some states offer training to help you prepare, either online or in person. Likewise, the test itself may be completed online or required to be done in person; it all depends on where you live.
5. Submit your exam and consent to a background check
Once you’ve completed your insurance licensing exam, you will likely need to undergo a background check. This will be similar to an employer background check, in which the state will look at your criminal history to ensure you don’t have a history of fraud or other financial crimes. Certain crimes on your record may prevent you from becoming an insurance agent.
Once you’ve submitted an exam and passed a background check, you’ll have to wait for your state to process your application. Once they do, you’ll be a licensed insurance agent!
6. Apply for appointment at insurance companies
Before you can actually start selling insurance policies, you need to apply for an “appointment” at the insurance provider(s) you wish to sell for.
You’ll have to research each carrier’s requirements and process for this, but generally, you’ll need to submit an application and prove that you’ve received the appropriate license and training. The appointment process usually starts with an online application and may also require an interview.
Each insurance carrier has its own process. If you’re going to be an independent agent selling policies from multiple carriers, you’ll need to complete the relevant appointment process at each carrier.
7. Search for insurance agent jobs or find clients directly with your own business
Once you’ve been appointed to sell insurance products from at least one company, you’ll be ready to start finding clients!
There are two main approaches here. You can be an independent insurance agent, which essentially means running your own business, or you can find an insurance agent job with an existing agency.
Finding an insurance agent job is best done online, where you can search for available positions in your area. As an agent, you’ll still need to drum up business and find clients, but working for an agency offers a stable place to work, some walk-in/call-in clientele, and, perhaps, training.
With that said, many existing agencies are run by independent insurance agents, and the jobs available at those agencies are more for assistants and admin staff than actual agents. Be sure to read the job descriptions closely to see what responsibilities and job titles are available.
The alternative to working for an existing agency is to start your own. This involves obtaining a business license, an office (or working from home), and everything else you need to get a business off the ground. Then, you’ll have to get out there to generate leads and find clients.
If you plan to be an insurance agent long-term, becoming an independent agent with your own business can be lucrative. With that said, many people who are just starting out in the insurance industry choose to start off working for another agent to learn the ropes before branching out on their own.
8. Build your insurance agent career
Now it’s time to continue building your career as an insurance agent. This will involve finding new clients, keeping existing clients happy, marketing yourself, and efficiently running your business.
Good insurance agents will also invest in ongoing training and career development to further their careers. They might also explore new relationships with other insurance carriers who may offer different products and/or different commission structures for agents.
Agents can also benefit from researching career advice, attending industry conferences, and continually examining their businesses and careers for ways to improve.
Plus, remember that there are many different career opportunities beyond being an agent to explore in the insurance industry.
FAQs about becoming an insurance agent
Here are some commonly asked questions that prospective insurance agents might have:
Is it easy to make money as an insurance agent?
Most insurance agents make money based on commission. This means that when they sell a policy, they earn commissions from the insurance carrier. Because of this, how much you earn — and how easily you can earn it — really depends on how good you are at sales.
Marketing is also important, as that’s how you attract potential customers and generate leads. Folks who are skilled at sales, marketing, and interpersonal skills often thrive in insurance agent roles.
What is the most profitable insurance to sell?
Life insurance tends to be the most profitable form of insurance to sell. Commissions are higher for life insurance — particularly term life insurance — than for homeowner’s insurance or general liability insurance, for example.
Do insurance agents make residual income?
Some agents earn residual income from existing clients. Residual income is ongoing income that keeps coming in as long as a client maintains their policy. Each insurance carrier has its own commission structure, but a common model is to pay agents a significant amount when they initially make a sale, plus a small yearly residual income stipend so long as the customer keeps their policy.
Is being an insurance agent a good career?
A career as an insurance agent can be lucrative, fulfilling, and versatile! It’s not an easy job, but for folks with the right skill set, it can be a fantastic career.
Become an insurance agent today to start your new career
Becoming an insurance agent can open up a world of opportunity. Whether you want to get a job working for an agency or start your own independent business, insurance can be a lucrative and fulfilling career.
Ready to find your next job? Check out the Jobcase Job Board for the best job opportunities in your area.
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