How to Become an Insurance Agent

The insurance industry is growing, and employment opportunities remain wide open. If you’re passionate about helping people, personable, adaptable and determined, you have the makings of a great insurance agent.

While you don’t need a college degree, meeting the qualification standards and becoming fully prepared will take some time. You’ll need to learn about the field and customize your career path.

Use this article to help you get started, as we provide a brief overview of the steps you need to take to launch into the industry.

Choosing the Type of Insurance to Sell

In the broadest terms, there are two main license types an agent can obtain:

1. Life and Health – Can sell personal insurance policies — such as life, term-life, general health, vision, dental and more.
2. Property and Casualty – Can sell personal and business insurance policies — such as auto, home, business owners, general liability, commercial property and more.

Here are a couple of other considerations:

• Offer multiple policy types – This will open you to more prospective customers and allow you to bundle an existing client’s coverage into a more cohesive insurance program, strengthening the relationship.
• Look into opportunities for niche offerings –Explore all the possibilities the industry has to offer. You may find something that’s perfect for you!

This step requires extensive reflection on your interests, what you will be good at and how much you can handle. There is no need to rush your decisions at this stage; it’s important to be 100% sure of the path you choose.

Reviewing State Requirements and Obtaining Licenses

The pre-licensing courses and certifications you need depend on the states and sometimes cities where you’ll sell insurance. If you plan to do business out-of-state, you’ll also need to obtain licenses for those locations.

You can visit the National Insurance Producer Registry (NIPR) to review your state’s education and license requirements. You should expect to take a pre-licensing course of between 20 and 40 hours; some states and license types require up to 90 hours. After you’ve completed the course, you’ll schedule and take your exam.

Becoming an Independent Agent vs. a Captive Agent

Once you pass your exam, you can legally sell insurance. Now it’s time to decide how you’ll do it. You can either open your own business as an independent agent or join an independent agency — commonly known as an insurance broker — or work at a captive agency.

The main difference between becoming an independent and a captive agent is the carriers you will sell. If you go independent, you can sell from as many different carriers as possible, while a captive agent only sells their company’s lines.

Here is a quick overview of the advantages and disadvantages of each route:

Independent Agent or Agency (Broker)

Pros:

• Total control over your business
• Choose your work hours and make your schedule
• Choose exactly what kind(s) of insurance to sell and find a niche audience
• Able to offer more flexibility and customization, as you can work with multiple carriers
• Earn a higher commission on each sale
• Won’t be required to meet sales quotas or force sales on clients

Cons:

• Pay for everything to operate your business
• Responsible for finding your leads
• Handling your marketing and networking
• Unable to enjoy the same benefits you would get at a company
• Ongoing training and continuing education (CE) is your responsibility

Captive Agent

Pros:

• Office expenses are covered
• Receive better benefits
• Receive ongoing training and access to discounted or free continuing education (CE)
• Usually provided leads
• In-depth knowledge of your company’s products, policies and processes
• Having the support and resources of your company

Cons:

• Can only sell one carrier’s policies, limiting the options you can offer to your clients
• Must abide by the company’s work hours
• Will make less on commission
• Will always be pushed to meet certain sales quotas and sell more expensive policies
• May be pushed to close deals rather than working in the customer’s best interest
• Must work with a predetermined set of policies set to the exact structure your company sells them, limiting how low the prices go and the options you can offer

Researching Carriers and Getting Appointed 

If you decide to become an independent agent, you must get appointed to sell a carrier’s policies. You’ll need to research and evaluate which carriers are a good fit for your practice.

After you decide which companies you’re interested in selling, you must apply for an appointment and binding authority. If approved, it will show on your license, and you can start selling!

If you join an insurance company as an agent, you’ll get appointed through their process. They’ll also likely require you to sign a non-compete agreement preventing you from working with other carriers. This is why captive agents are also known as “exclusive agents.”

Create Plans To Earn and Retain Customers

As soon as you are appointed by the insurance carriers for which you want to sell, it’s time to create a solid plan to earn and retain business. The first step of such a plan is to master the lessons new insurance agents need to learn ASAP, as they will help you with everything from making a good first impression to putting the client’s mind at ease. If you want to be the best new agent in the business, then mastering these lessons is a big step toward your goal.

Part of your plan to earn new customers should include a website for your business. Websites are crucial because they allow customers to learn more about your offerings and get in touch with you quickly. Your website should have forms to gather information about prospective clients, including their name, email address, phone number and the products they’re interested in. You’ll also want to establish a social media presence: this helps create easy and affordable marketing and gives customers another easy way to contact you.

Once you have a steady pool of customers, you need to focus on keeping their business with some reliable retention strategies. This includes showing empathy, adapting to customer needs, and offering tangible rewards for those who keep renewing their policies.

If you’re struggling to get started with earning new business, be sure to try these options as well:

• Reach out to friends and family
• Explore options for digital and local advertising
• Cold-call people
• Join an insurance association
• Check with your carrier for leads
• Purchase leads from a third-party service
• Write blog posts to show your expertise and enhance your search engine optimization (SEO)
• Enhance your website with more information about your offerings
• Host a webinar or Zoom call

For more in-depth ideas, read 100 Insurance Marketing Ideas, Advertising Tips and Ways to Market Your Insurance Agency.

Many people enter the field expecting to make a lot of money right away. New agents make the common mistake of trying to sign as much new business as possible. This approach is not only risky but is also not as lucrative as it may seem.

It’s important to understand that insurance is about helping clients, and real success is achieved by playing the long game.

Purchasing Errors and Omissions (E&O) Insurance

As a practicing agent, E&O claims will always pose a severe threat to your business and livelihood. A client can try to hold you liable for inadequate coverage advice, administrative errors and more at any time.

The National Association of Professional Agents (NAPA) provides insurance agents and agencies affordable coverage from an “A” rated carrier. Visit our E&O webpage to learn more about our options for newly licensed agents.

By purchasing a policy with NAPA, you will also have immediate access to NAPA member benefits, such as savings on business essentials and services, free continuing education (CE) courses and other resources to help you launch your career.

The information contained herein is offered as insurance Industry insight and provided as an overview of current market risks and available coverages and is intended for discussion purposes only. This publication is not intended to offer legal advice or client specific risk management advice. Any description of insurance coverages is not meant to interpret specific coverages that your company may already have in place or that may be generally available. General insurance descriptions contained herein do not include complete Insurance policy definitions, terms and/or conditions, and should not be relied on for coverage interpretation. Actual insurance policies must always be consulted for full coverage details and analysis. Gallagher publications may contain links to non-Gallagher websites that are created and controlled by other organizations. We claim no responsibility for the content of any linked website, or any link contained therein. The inclusion of any link does not imply endorsement by Gallagher, as we have no responsibility for information referenced in material owned and controlled by other parties. Gallagher strongly encourages you to review any separate terms of use and privacy policies governing use of these third party websites and resources. Insurance brokerage and related services to be provided by Gallagher Affinity Insurance Services, Inc. (License No. 100310679 | CA License No. 0783129).