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How to Start Selling Life Insurance in 2022

Insurance Agent Development
Jan 6, 2022
20
minute read
Amy Sterling Casil
How to Start Selling Life Insurance in 2022

Life insurance sales can be a challenging profession, but it can also be financially and personally rewarding. Diverse individuals from a wide range of backgrounds can be successful in the field. If you've been seeking a career where you can set your own hours and interact with many people, life insurance sales will allow you to do both of those things. 

Still, it's not a career for everyone, and it's good to be informed before you jump in. In this article, we'll cover what it takes to succeed at selling life insurance. You'll learn some of the positives of life insurance sales, as well as the challenges that are part of the profession. 

How Much Money Can You Make Selling Life Insurance?

The median wage for agents in 2020 was $52,180, while the top 10 percent of agents earned over $127,840 during that time.  

With such high potential earnings, it makes sense that so many people gravitate toward this career path.  However, it's imperative to understand that those earnings are directly dependent on individual performance.  

Is Selling Life Insurance a Good Career?

Before getting started in selling life insurance, it's a good idea to consider the type of work you'll be doing. Selling life insurance can be an amazing career, but you should consider how comfortable you are with some of the unique aspects of the profession first.

Benefits of selling life insurance

There are many of positives about a career in life insurance sales. Here are just a few.

Low barrier to entry

Life insurance salespeople come from a wide range of backgrounds, and there are no specific educational requirements beyond a high school diploma. You can get certified and licensed to sell life insurance without completing a degree program. Requirements vary by state, but attaining licensure and certification usually only takes a few weeks or months at most.

Flexible hours

Life insurance sales isn't a typical nine-to-five job. You need to be available when your clients and prospects are available. Often, that means you're free to take off during the day and meet with a client in the evening or on a weekend.

Job opportunities

Life insurance has been around since Roman times, and the first life insurance companies in the U.S. started during the 1700s. As the population grows, so does the field of life insurance. According to the U.S. Bureau of Labor Statistics, the number of insurance sales agents will grow by 7% per year between 2020 and 2030.

High commissions

Because purchasing a life insurance policy is typically a long-term commitment, the commission for life insurance agents is much higher than for other types of insurance. Agents might earn as much as 100% of the first-year premiums for a life insurance policy, before dropping to more standard rates of around 5%.

Passive income

Because life insurance policyholders tend to favor annual renewals, ongoing commissions can become a form of passive income for agents. You still need to work to maintain relationships and encourage ongoing renewals, but these ongoing commissions can add up to steady income.

Challenges of selling life insurance

Before you start a career in life insurance, it's important to consider a few downsides, too.

A commission-based career

Life insurance agents earn their living on commission. That means that starting pay isn't as high as some other jobs, and your primary earnings are based on commissions for the policies that you sell. Life insurance sales earnings build over time, but it can take a while to get going.

Not a back-office job

Successful agents are able to communicate effectively with potential customers, in person, over the phone, or online. If you have trouble asking others to complete financial transactions or make a commitment, life insurance sales could be challenging for you. 

Hunting for leads

When selling life insurance, you're responsible for finding prospects and converting them to sales. Because your compensation relies upon commissions, the more prospects you can locate and convert, the more money you will earn.  The opposite is true, as well.

Uncomfortable conversations

Life insurance benefits are paid when the subscriber dies, so you'll need to be able to ask customers questions like "If you died tomorrow, would your family be able to pay their bills and continue their lifestyle?" Not everyone finds it easy to be that direct with others when talking about a difficult and emotional subject. 

Communication skills are critical

You'll work with diverse people in presenting life insurance policies. If you don't have good communication skills — or you aren't at least willing to develop them — life insurance sales may not be a fruitful career for you.

Types of Life Insurance Products to Sell

When you're considering a career selling life insurance, it's helpful to know the products you'll be selling. Here are some of the most common types of life insurance products.

Term life insurance

This is the most common type of life insurance, and it's popular due to its simplicity and low premiums. Term policies pay out only if the policyholder dies during the policy period (usually 20 or 30 years) and offer no cash value otherwise. These policies are ideal for young, healthy buyers who can secure affordable rates and use the savings to invest in other financial securities.

Whole life insurance

Also known as permanent life insurance, whole life policies never expire. They pay out whenever the policyholder dies, regardless of how old, and they build cash value over time. They come in several forms, such as universal life or variable universal life, but they all work in essentially the same way. The insurance company invests a portion of the annual premiums, and this investment produces a cash value that the policyholder can tap into when they need it.

These policies are ideal for clients who don't like the idea of only receiving a benefit if they die, but they're much more expensive than term policies.

Final expense life insurance

Final expense life insurance is a type of whole life policy that's designed to cover the costs of funeral and burial expenses when you die. It's less expensive than other whole life insurance policies because it covers a much smaller amount. It's a great option for policyholders that want to supplement their existing coverage to ensure these final expenses don't eat into their beneficiaries' payments.

Mortgage protection life insurance

This type of coverage is designed to protect the policyholder's family from the burden of paying off a mortgage if they die prematurely. Unlike other types of life insurance, the beneficiary is actually the lienholder, not the family members. If the policyholder dies, the policy would pay off the remaining mortgage balance, freeing the family from any future monthly payments or liability. This coverage is ideal for someone who is underinsured and unable to afford more life insurance due to poor health qualifications.

Indexed universal life insurance

Another form of permanent life insurance, indexed universal life offers the greatest flexibility as an investment product. Returns are based on the chosen stock index and can be higher than in other whole life policies. However, that potential return also comes with a higher risk. These products are best suited for policyholders who want to be actively involved and treat their life insurance as a major part of their investment portfolio.

Other types of life insurance

These are just a few of the primary types of life insurance you can sell. Within the broad categories of term and whole life insurance, there are many different policy types to consider. Group life insurance policies are also a great way to boost your sales success. There's a policy to fit any type of prospect you work with during your career as an agent.

How To Get Started Selling Life Insurance

If you want to sell life insurance, the first thing to do is get familiar with the rules and regulations. Study and learn the licensing information in your state or other states where you want to sell, and pass the licensing exam. The life insurance licensing exam can be challenging, but with study and effort, you can be successful. Not all states publish the results of insurance exams, but you can see the pass rates for different exams and states by visiting the National Association of Insurance Commissioners (NAIC) website.

Another starting step is to apply for and receive an NPN (National Producer Number) through the National Insurance Producer Registry. An NPN number is essential to selling life insurance. Fortunately, companies that hire people to sell life insurance are experienced in helping prospective salespeople through the process of passing exams, licensing, and registration.

Other steps in getting started in selling life insurance are less formal. For instance:

  • Prepare for rejection — possibly a lot of it. Prospective customers might be contacted many times a day with sales opportunities, and discussing the reasons why people need life insurance can be uncomfortable.
  • Work on your relationship skills. When someone decides to buy life insurance, part of their decision will be based upon the product, but much of their decision will be based on their confidence and trust in you as the salesperson. Get the strongest start you can by building up your relationship and communication skills.
  • Find a mentor. Working with a successful mentor in the industry can help a lot when you're getting started. A mentor can give you a good idea of how to initiate conversations with prospects and how to close sales.

Top Sales Tips for New Life Insurance Agents

If you've chosen to become a life insurance agent, you've picked a challenging and rewarding career. There are many different tips to help you to get started successfully and grow your career. We've put together a few of the most important ones to help you as you get started.

Tip #1: Specialize in a product

Insurance agents tend to be more successful when they master a few products up front instead of trying to be a jack of all trades. Mastering a product means knowing more about it than your competition and providing clients with valuable insight and tips on that product.

Learn about the various types of life insurance we covered above, as well as the many subtypes you can sell. Choose one or two that fit your passions and your target market. You can always add more as you have success. Keep in mind, too, that life insurance also has different market customer levels, from entry-level to mid-level to elite or high-end policies and customers.

Tip #2: Understand your target market

Once you've chosen your area or areas of specialization, it's time to complete one of the most important life insurance selling tips: study your target market. Understand their challenges, goals, and how your product can help them.

For example, term life insurance is most prevalent in people aged 25-45 who are working their way through key life events. This is typically the age group buying homes, getting married, building families, and saving for kids' college funds. They usually have a lower net-worth than older age groups and higher debt-to-income ratios.

Knowing these facts can help you understand the market on a more personal level. It's fairly easy to see that many people in this age group worry about what would happen to their families if they passed away. A wife and mother of three, for instance, is likely concerned about whether her family could stay in their home and pay bills if she were to lose her income.

As such, she is probably looking to ensure that her spouse has everything they need to take care of these things. Insight makes it much easier to determine your target market's needs and help find potential solutions.

Tip #3: Gain knowledge through real-life experience

Any time you start a new job and go through training, you have the opportunity to ask questions. Unfortunately, it's common to have few or no questions at all during training, as it can be challenging to be aware of your knowledge gaps until they come up in practice.

For example, if you were to start a job as a server in a restaurant, you might think of a few questions while in training. However, you likely wouldn't think about the ingredients in a particular dish until a customer asks about them.

The same goes for selling life insurance. You can read all of the books and training materials you can get your hands on, but they will only teach you so much. Much of your knowledge will only come from experience.

Don't think you need to learn it all before you head out into the field. Gather all of the knowledge you can from your available materials, but know that every day is a learning experience.

Tip #4: Be strategic

Think about how you can market your products and yourself as a life insurance agent. This can also help you to determine your strongest specialty area and how to prioritize prospects. 

The life insurance field is complex, but it also rewards experience and commitment. As you gain experience and knowledge, you can develop a specialized focus on specific products or customer demographic groups. Not only will this help you to narrow down your prospects, it will also help you to be more effective in closing sales and presenting products to customers.

Tip #5: Be consistent

It's important to prospect consistently. You will not sell to every single prospect you meet, but the more you prospect, the more you will sell. Try these tips to help:

Determine whether you want to sell life insurance full time or part time. This decision will impact everything from the number of leads you generate to the number of people you meet with regularly.

Set a goal for a specific number of sales presentations to do each week. Full-time life insurance agents should aim to complete anywhere from 10-15 presentations each week. Part-time agents might aim to complete five to seven each week.

Sell to large markets to have plenty of leads. It's hard to complete 10-15 presentations each week if you don't have a large enough market. Choose mass-market products, such as term life insurance or final expense life insurance.

Tip #6: Have a strong work ethic

We've all heard the saying, "Hard work pays off." When it comes to selling life insurance, successful salespeople focus on a strong work ethic, setting goals, and sticking to a busy schedule. Writing down your own expectations of yourself in the form of a business plan can help you to identify the steps you need to take to meet your work and productivity goals selling life insurance.

Tip #7: Seek ongoing education

Life insurance may seem straightforward, but the field changes rapidly. It's important to stay up on trends in the industry and understand the different products that you specialize in and can offer to customers. 

There are also other factors to consider when working with your prospects and presenting policy alternatives. Your ability to understand the issues that your customers face in their daily lives — as well as concerns they may have about their family's future — could be the key to making a sale and building up your earnings as a life insurance agent.

Tip #8: Know your product

You must be knowledgeable of the life insurance products you sell to be effective in a sales presentation. Review all of the policy options thoroughly and be prepared for any questions the client may ask you.  

For example, be prepared to explain all the different types of term and permanent life insurance and what the advantages and disadvantages are for each type.  

Some talking points include the costs and benefits of term and permanent life insurance policies. For instance, term life insurance is less expensive, while permanent life can be more expensive but it also provides a cash value.  

You can also stress the benefits to young couples of purchasing life insurance while they are young and healthy and qualify for cheaper life insurance premiums.

Tip #9: Consider tools to help you grow your business

On top of a lead-generation partner, there are several other tools you should consider to set yourself up for success. These include:

  • A customer relationship management (CRM) system to keep track of your prospects and customers and manage your book of business
  • A website for marketing yourself and your products
  • Life insurance quick estimator tools that will allow you to quickly build and modify quotes based on your clients' needs
  • A client profiler like Prudential's — a comprehensive fact finder to help you uncover any and all life insurance needs with a client
  • A HIPPA Authorization form for clients to ensure you maintain HIPAA compliance with the release of health-related information

Tip #10: Get to know your clients

Invest some time in getting to know your customers and their objectives so that you can present the ideal insurance options to fit their unique circumstances.  

Then, conduct a needs analysis to determine how much life insurance your client requires to meet their goals. Once your clients realize you care about their future and developing a long-term relationship, they will begin to trust you and be more willing to buy your life insurance products.

Tip #11: Build trust and relationships

As with any type of sales, relationships are critical to your success as an agent. Life insurance deals with a sensitive area of people's lives. That makes it even more important to establish strong relationships and build trust with your prospects and clients.

If someone feels like you care more about landing a commission than you do about their family's needs, they'll quickly lose interest in your life insurance sales pitch. Focus on getting to know them, learning their concerns for their family's financial future, and finding the right product to meet their needs.

Reviewing the client’s personal life insurance goals will build trust, which is a vital part of the agent-client relationship. If your client trusts you, you've already won half the battle.

As you build strong relationships, you open the door for more opportunities with that client in the future — and you increase the likelihood that they'll refer you to others.

Tip #12: Sell solutions

As a life insurance salesperson, you develop the ability to solve problems. Often, people come to you with concerns about the well-being and financial stability of their families. You can provide solutions to their problems.  

When a client expresses concern, pitch them on your life insurance products as well as the answers to their financial difficulties. If prospects perceive life insurance as a way to assist them in solving a problem, you improve your odds of selling them a life insurance policy.

Tip #13: Thoroughly explain the options and premium costs

In making your sales presentation, be sensitive to how much life insurance your client can afford. Not everyone is in the same financial situation. Don’t pressure a prospect to buy a life insurance policy that's out of their range. You're not doing your client any favors.

That customer may run into money trouble down the road and won't look favorably upon you for putting them into a financial bind. Life insurance is available in many different varieties, and there is a policy available to suit every type of family budget and financial situation.

Tip #14: Highlight benefits with a visual presentation

People remember presentations better if you include visual materials such as charts showing costs or a page of highlighted policy benefits. If your clients see and hear your presentation, it helps them understand it better and sticks with them long after the meeting is over.  

Don’t be surprised to find that including visual aids with your life insurance sales presentations helps you close more sales.

Tip #15: Practice your presentations

There is no shame in doing a practice run of your sales presentation. Your presentation should be smooth and flow naturally, although you don’t want it to look like it's rehearsed. Stand in front of a mirror and make note of your facial expressions. You want to look friendly, confident, and well prepared.  

Taking a video recording of yourself is a great way to see yourself as clients see you. Review the video and work on any presentation points you may need to improve. Just remember, you still need to be prepared to change your presentation based on the client's concerns and questions.

Tip #16: Prepare for overcoming objections

It may take some time to become comfortable with overcoming objections, but it's an important part of your life insurance sales presentation.  

It is important to stay relaxed and respond naturally when presented with an objection. Keep your tone of voice even and respond confidently with information that can change the prospect’s negative perception to a positive one.  

The most important thing about an objection is to acknowledge it. Once you’ve given your best answer, ask the client if they have any additional questions and do your best to answer each objection in the same calm, confident manner.

Tip #17: Ask the right questions

The only way you are going to find out about what the client hopes to gain by purchasing life insurance is by asking the right questions. What are the client’s life goals? Are they looking for a policy with a cash value option to help with retirement savings?  

Once you know what the client’s goal is and what they expect from a life insurance policy, you can present the product portfolio of your life insurance products that best fulfill the client’s needs. Once you present all the options, ask the client if these options will help fulfill their goals.

Tip #18: Leave some reading materials behind

You won’t always make a sale on the day of your presentation. Leads may need some time to think things over and decide what options fit with their current situation. If you leave some reading materials behind that go over all their options, this will help the client make an informed decision.  

Make sure you also leave your contact information behind, so the client can give you a call if they have more questions.

Tip #19: Thank your clients for their time

Your client’s time is valuable, and you should show your appreciation that they have agreed to hear your sales presentation. Be respectful of the scheduled time allotment for your presentation and don’t go over it.  

Acknowledging that you value the client’s time will go a long way toward building trust in your professional relationship with them. A small token of appreciation, such as a hand-written thank you card, is a personal touch that will let prospective clients know you value their time.

Tip #20: Don’t forget to follow up

According to a global research firm, LIMRA, there has been a steady decrease over the last 10 years of employers offering employer-paid group life insurance.  With this in mind, that opens up the door for more life insurance sales opportunities.  

However, to secure the sale, you should never forget the importance of following up after that initial customer contact. If you fail to follow up, it shows the prospective client that other things are more important to you than getting back to them on their life insurance purchase.  

All it takes is a simple call to ask if the client has any questions to help you make the sale.

Tip #21: Have a consistent flow of new leads

When it comes to being a successful life insurance agent, the biggest challenge is lead generation. There are several steps you can take to find quality leads:

Conduct your own marketing

You can create a website for yourself or your agency and leverage various marketing strategies to help generate more life insurance leads, but it takes a lot work.  

Making this effort is worth the reward, and establishing a converting website should certainly be part of your lead generation plan. However, building the website, getting your marketing channels to drive quality traffic, and building a following takes time. You likely will not see the results of this effort for a while.

Ask for referrals

Another useful way to generate leads is to reach out to your current clients. You can ask them for referrals (friends and family members) who might benefit from using the life insurance products you sell.

It's also important to remember that your current clients' needs will adapt as their lives change. While they may have needed term life insurance when you first started doing business, you can revisit them later to discuss the benefits of switching to a whole life plan.

Work for an insurance company

Many life insurance companies provide their agents with leads. This can be helpful, but it also comes with a price: a lower commission. The company takes part of the money you make in exchange for giving you the lead in the first place.

Join Assurance as an independent agent

If you prefer to work for yourself but would benefit from strong support, especially when first getting started, consider working as an independent life insurance agent for Assurance.

The Assurance platform empowers you to sell life insurance whenever, wherever, and however you want. With Assurance you will have access to Assurance's User Engagement Specialist Team who will help you sort out things like carrier issues, and you'll never be left to figure things out on your own.

You'll also have access to a wide variety of training sessions made available each week to broaden your knowledge and skills on selling life insurance. Assurance will also assign you a dedicated sales manager, who will work closely with you to help you reach your sales goals.

And most importantly, Assurance will relieve you of the pressure to have to source your own leads. Instead, Assurance sends you pre-qualified life insurance leads. With Assurance's leads you'll be speaking directly with people who have already expressed interest in finding life insurance coverage.

These leads cost you nothing — you don't have to worry about paying for marketing or other limits on your earning potential. Instead, you can focus entirely on what you do best, and that's selling life insurance. Learn more about selling on the Assurance Platform.

Buy your leads

Following each of the tips above can provide benefits, but maybe you prefer not to work through someone else's platform or need time to get your website and marketing going. If you need a helping hand with getting started on your own, consider buying life insurance leads.

Buying leads is a great option for agents who are less enthused about marketing and networking or are simply looking to grow their book of business without eating up too much of their valuable time. Nectar even offers live-call transfers — real-time buyers looking for your product, piped directly to your office phone. We vet these leads and direct their calls to you on your schedule so you can focus on selling.

Start Growing Your Life Insurance Business Today

During the course of selling life insurance, you will meet a wide range of people. Everyone's situation is different, yet they all share one thing: All of your prospects are interested in using life insurance to protect their loved ones and valuables. You'll be surprised that most Americans do realize the value of a life insurance policy.

And if you don’t have time to spend marketing and nurturing leads, Nectar can provide you with qualified life insurance leads who are eager to buy life insurance from you. We'll only send you leads that meet your chosen criteria. This way, you can start growing your insurance business right away.

Talk to shoppers today

This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.

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