An insurance agent is a person who sells the company’s product for the sake of commission. A significant aspect of dealing with an agent is that he/she sells only one company’s insurance policies, and is thus usually unable and uninterested in comparing the costs and specifications of other products on the market.
An insurance agent usually receives a salary paid by an insurance provider, and a sales-based commission or bonus may also be earned. An agent would also be interested in selling additional goods from the same business (for example, initially selling you a small-term life insurance policy and then providing you with disability insurance and/or serious disease protection). Some firms, such as State Farm, operate exclusively with agents, and their goods are therefore not included among the products provided by brokers.
Types of Insurance Agent
There are three types of insurance agents.
- Captive Agents
- Independent Agents
- Insurance Broker
Captive agents are those persons who work for a single insurance company or a specific group of the same insurance company, which means they can only give you one insurance policy quote or price.
Captive agents are easily recognized because their insurer name is placed in front of their buildings.
In general, captive agents are not employees of the insurance firm they are representing. The insurance companies pay commission to their insurance agents.
Independent agents generally represent more than one insurance company. Similar to how a mortgage broker can shop your loan around with different lenders, an independent agent can shop the insurance premium with all the insurance firms they represent.
Independent agents don’t advertise any company. They are not employees of the company they represent. The companies pay commission to their agents according to the paid policy.
There are no clear examples of these kinds of agents that you will be aware of through name recognition since they can be as distinctive as the name of an individual agent.
The insurance broker represents the client instead of the insurance company. There is a slight difference between a broker and an insurance agent.
These organizations may be named after a particular person or by any variety of other names, just as with independent entities.
Role of Insurance Agent
Insurance Brokers are responsible for recognizing insurance contract distribution opportunities and managing a consumer portfolio. These practitioners are also known as Insurance Sales Agents and are responsible for defining risk management techniques, managing renewals of policies, and monitoring claims.
Responsibilities of Insurance Agent
- The insurance agents help to sell and promote the products of the insurance company. They also give services to their customers.
- They not only deal with the individuals but also families and businesses too.
- They advise finance and customers support to the clients.
- They keep a good relationship with the clients.
- They also give general information about the market.
- Marketing plans must be drawn up and re-drawn from time to time, taking into account the desires of companies.
- It is important to chalk out well-crafted strategies and plans.
- Exercise in the construction of public relations should be given importance.
- It is important to actively follow business growth tactics.
- The insurance agent has the responsibility of producing leads for insurance as a salesperson, usually paid on commission. This could involve inserting advertising in a local newspaper or website, going to community gatherings, making cold calls, and purchasing lists of contacts. He makes an initial call to talk about policy needs or to set up a face-to-face meeting with the prospect after he receives names and numbers of prospects.
- An insurance agent asks questions and listens to details about the prospect’s expectations during an initial phone call or meeting with a prospect. To find out the forms of insurance and policy words that make the most sense, he attempts to determine the buyer’s situation. Among the basic items addressed during this initial meeting are coverage needs, numbers, payment priorities, and budget.
- An insurance agent should be trained in the art of persuasion, as all sales practitioners. When he knows a prospect’s needs, to see what is the right fit, he will look over product choices. He then provides the prospect with a suggestion. It is necessary to take a long-term orientation when attempting to influence the prospect.
- Larger insurance providers also have contact centers or support teams that deal with queries and lawsuits about basic customer care. However, as the first point of service contact, individual agents and even those in offices of larger providers usually work. He also calls his agent to negotiate options or to get details if a customer has a concern about coverage or a claim.
A life insurance agent is also responsible to give some insurance to their clients like causality insurance, health insurance, disability insurance, etc.
Pros and Cons about a career as an Insurance Agent
There are a lot of reasons to enjoy becoming an insurance agent like monetary rewards, flexible hours of service, rapid growth, etc. but this profession has its own set of obstacles, like any other career.
Every other profession, being an insurance agent has many ups and downs. Just like every other profession. Depending on your personality, beliefs, and motivation, a career in this field may be highly lucrative or a total catastrophe. To work with many people, insurance agents are needed. So, if you have a talent for engaging and selling goods with people, then this might just be the work for you! But first, understanding all that goes into this kind of work is important. Here is a look at both the advantages and disadvantages of being an insurance agent:
Build up Client Base
It is not a straightforward job to locate customers. In seeking quality leads, businesses spend a lot of time and money. To find potential buyers, you will have to make cold calls, create an online presence, travel and meet people, etc. However, there is no assurance that the person will purchase a policy from you simply because you have encountered a prospect. A lot of the time can be absorbed by all the activities involved in developing a customer base. There’s also a risk that the work hours could extend beyond the usual 9-5 office days. Depending on their availability, the team leader or manager can also ask you to meet customers during the weekends.
The pressure to sell Products
There will be a certain amount of stress and pressure to sell that comes with the job, regardless of which form of agency you work for. Your commissions will take a hit if you are unable to reach the sales target. Since your earnings are highly dependent on how many and what types of insurance policies you sell, you are likely to make less money. Moreover, the rivalry in the sector is very tough. Your strategy can be incorrect if you do not recognize the advantage you have over other agents.
Awareness with Changing Regulations
A list of regulations has been set out by the government and insurance regulator for the players in the industry to obey. Laws relating to insurance are updated or adjusted, often daily, to meet changing needs. Keeping up with them if you’re not completely trained and prepared might seem like a daunting challenge. To ensure you provide your customers with the best possible support, remain on top of the industry-related updates. Keep going via online insurance-related news or subscribe to blogs and newsletters covering this segment’s news.
If you plan to start selling insurance, we highly recommend that you be a person. Much of this job includes interacting with clients, so this may not be the career path for you if you don’t like working with people. You would most likely need to make cold calls to obtain customers. You will also have to take the requests of your customers into account, as the cornerstone of this job is to find them a plan that suits their needs. This will take time and effort on your part, but to narrow down your options, you can use Ritter’s Medicare Quote Engine or your consumer-facing Medicareful platform.
Although the insurance industry is stable and the revenue is high, planning and anticipating where the next paycheck will come from can often be challenging, because your income is solely dependent on transactions made. You must be a go-getter to excel in this sector. Your income would show this if you’re not motivated or don’t push yourself to succeed. That being said, insurance agents who work hard, keep up to date with the market continuously, and make an effort to acquire loyal customers in this industry will be highly successful. You’re in business on your own when you become an independent insurance provider, but that doesn’t mean you are in business on your own. FMOs such as Ritter Insurance Marketing will provide you with the tools you need to be successful, such as dedicated team members and your website to quote and register plans for customers.
The drawback of this job is a license which varies from state to state. If you move to any other state then you must need to get a license again. The insurance companies only pay commission to their customers. This means you only get paid for a sale you make. This is a very difficult task particularly in those companies that provide health insurance because they provide a specific enrollment period.
One of the key reasons many people become an insurance agent is that it provides the opportunity to make a lot of cash. Considering that you will be employed in sales, your commissions are a strong motivation to produce better numbers. Although captive agents collect pay, in the form of commission for the sale they produce, they can earn extra. The independent agents take a commission for the policies they sell. In general, how much an insurance agent can make from commissions is not limited. The more you sell, the higher the commission will be. There are also other perks, such as incentives and international vacations that companies give to top-performing agents.
As an independent insurance provider, the hours you put in will give you a great deal of versatility. It is entirely up to you how much time you want to give your work a day or a few hours to work. You don’t have to make it clear to a superior. Also, you can find that certain customers are only available on nights or weekends. You can plan your schedule according to your clients when they will available. Various studies have also shown that the flexible schedule is the key reason that young insurance agents enjoy most about their work.
Start Earning at Early Age
A person who wants a license to operate as an insurance agent or a composite insurance agent must hold the “minimum qualification of a pass in the 12th standard or equivalent examination conducted by any recognized board,” according to the regulations set out by the IRDAI. If the applicant resides in a location with a population of 5000 or more, this is the case. If the applicant lives in some other country, he or she would have to pass a recognized board’s “10th standard or equivalent examination.” Hence, it can be seen that a person can start his or her insurance career with a modest formal education. This opens up jobs in the industry for even college students’ work.
One of the wonderful things about the insurance industry is that you have the right to determine what kind of products you want to sell once you are a licensed health and life agent. We find the Medicare market to be a stable one with great growth potential, but life insurance, cancer insurance, final cost, and many other options are also available to choose from.
If you are an independent agent then you have the right to choose that whose product you want to sell. This is a perfect way to diversify your investments because insurance policies are not “one size fits all.” The multitude of plan options that you can offer them would be appreciated by your clients. Help them succeed in the field.
People need insurance policies particularly health care. The long-term prospect of sales of private life and ancillary insurance is still strong even in a divided political environment. It doesn’t hurt, in our view, that insurance is a profitable business. You will earn commissions on the plans you sell, so how much you want to hustle is completely up to you. With consistent renewals, you can also make more money, so it helps to have faithful customers in the long run. To get started, you don’t even need a college degree; you just need to put in your effort.
Qualities of good Insurance Agent
If you want to become an insurance agent then some are good qualities that you must have to adopt.
Provide good customer service
A good insurance agent provides good customer service. You have to answer the call of your customer whenever they do. You are answerable for every question they ask. Whatever you say to your customer you have to do. If you are unable to do then you will have a reasonable excuse for why you cannot do it.
High Energy Level
One of the most important characteristics of a good insurance agent is that, at all times, they seem to be enthusiastic and willing. A worn-down or dreary disposition will rub off on consumers instantly and deter them from buying something.
Insurance brokers who use fraud to close business rarely remain for very long with the same company, and in some cases can end up behind bars. A good agent knows that revealing the truth upfront will win the love and trust of customers and will stay with the company over time.
Give Priority to Clients
A good insurance agent place the clients need first. An agent who is just trying to receive a commission, regardless of the client’s needs, is not likely to last in the company for a long time. Agents and brokers who carefully listen to what their customers and prospects say will be able to win their confidence, which is the most challenging part of their work.
A good insurance agent should be emotionally intelligent. This requires the opportunity to listen and empathize with clients on a deeper level, to concern what they want and need. A good agent is tactful and knows how to support a client, even though the client is dead set against it, see financial realities.
Perhaps this is the most important attribute of any good insurance provider. Many who work in this area simply must be able to cope with rejection regularly and do so with a smile throughout their careers. Good insurance brokers know that any “no” only gets them closer to someone who says “yes.”