Learning how to sell insurance can take a while but if you have a passion for helping others and follow your state’s regulations and rules you should find life insurance sales rewarding. In this article, we outline the steps for starting a career in life insurance sales and which skills will help you be as successful as possible.
TABLE OF CONTENTS
- Skills For Success
- Types of Life Insurance
- Earning Potential in Life Insurance Sales
- Getting Started
- Sales Tips
- Frequently Asked Questions
Skills For Being Successful at Selling Life Insurance
Since you’ll be working directly with customers, having great customer service skills and good communication skills are essential for success.
Customer Service Focus
Getting used to rejection and dealing with difficult customers are important skills to have when selling life insurance. If you have experience working in retail sales, you’ll be well-equipped to deal with common issues life insurance representatives have.
Great Communication Skills
Being great at communicating and setting clear expectations is essential when working with potential customers, especially if you are cold-calling leads. You need to be able to quickly make your pitch and have the ability to respond naturally and appropriately to a potential customer's response.
Networking Skills
Feeling comfortable networking with other life insurance professionals will contribute to your success as many insurance professionals have attested to. Whether that’s helping you find a new position or learn new strategies, sharing your experiences and aspirations with others in your field will benefit your career.
The Kaplan Financial Education team interviewed over 100 insurance professionals to develop an exclusive eBook for those considering the insurance industry. We asked each of our eBook contributors these three questions:
- What advice would you give someone entering the insurance industry?
- What skills are essential to success in insurance?
- Where do you often see unsuccessful insurance professionals fail?
We then combined their responses to form this one-of-a-kind free resource about launching your insurance career.
Download Our Free Launching Your Insurance Career eBook
Types of Life Insurance Products to Sell
There are many different types of life insurance products, however, most of them can be categorized into two different categories: term life insurance and permanent life insurance.
Term Life Insurance
Term life insurance is temporary coverage that usually lasts for a specific duration of time such as 15, 20, or 30 years. This type of coverage offers a fixed payout if the insured person dies within the coverage period. Of all the life insurance policies, term life insurance is typically the most basic and easy-to-understand.
Some of the differences between term life insurance policies and permanent life insurance policies are in premiums (cost per month/year) and cash value (does the payout amount increase over time?). Usually term life insurance has lower premiums compared to permanent life insurance and term life insurance does not build cash value over time.
Permanent Life Insurance
Permanent life insurance provides coverage throughout the insured’s entire life as long as the premium continues to get paid. This type of insurance can build cash value over time and usually has higher premiums than term life insurance. Depending on which type of permanent life insurance, policyholders can qualify for loans and even withdraw cash from some policies.
Some examples of permanent life insurance are:
- Whole life insurance - offers a fixed premium, guaranteed death benefit, and a fixed interest rate on the cash value of the policy.
- Universal life insurance - offers more flexibility than whole life insurance. This type of coverage allows you to adjust your premium payments sometimes and choose how the cash value of the policy accumulates. Standard, variable, or indexed interest rates are available for universal life insurance.
Life Insurance Add-ons
There are many add-ons for life insurance that provide additional coverage. One example is final expense life insurance which provides additional coverage for burial costs.
Another add-on is mortgage protection, designed to protect the policyholder's family in case they pass away suddenly. The policy will pay out the insured’s remaining mortgage balance ensuring their family inherits a home free of mortgage debt.
Earning Potential in Life Insurance Sales
Life insurance agents have the potential to make a good living especially when they are successful and have a passion for their work. Compensation from life insurance sales usually comes from commissions and bonuses as a result of the policies sold.
According to the U.S. Bureau of Labor Statistics, median salaries for Insurance Sales Agents are about $60,000 USD and can reach as high as six figures for top earners.
How To Start Selling Life Insurance
Getting started to sell life insurance is pretty straightforward. You’ll need to complete your state's pre-licensing education requirements, pass an insurance licensing exam, apply for a license with your state, receive a National Producer Number (NPN), and then either find a job with a life insurance company or start your own.
Complete Your State’s Pre-Licensing Education Requirements
In conjunction with preparing for the life insurance licensing exam, you’ll want to have a basic understanding of local and national laws about selling life insurance. This way you’ll have some familiarity with the concepts being taught in your life insurance licensing prep.
Prepare for the Life Insurance Licensing Exam
Plan to prepare for the life insurance licensing exam for 3 months. Look for course options that offer flexibility and include essential study items like a pre-study assessment, study calendars, Qbanks, performance trackers, and state-specific resources to help master state laws and regulations needed to pass the licensing exam.
Apply for a Life Insurance License With Your State's Insurance Department
After you pass the life insurance licensing exam, you’ll need to submit your fingerprints, pay a small fee, and designate an Errors and Omissions insurance provider with your state’s insurance department. Once that is complete your license will be approved and the National Insurance Producer Registry (NIPR) will automatically assign you a unique NPN.
Your NPN number will identify you in the national producer database and allow you to actually sell life insurance in your state.
Find an Employer or Start Marketing Yourself
After receiving your NPN number you’ll be ready to start working. You can decide to find a job with an employer or start out on your own.
Tips for Selling Life Insurance
Below are some helpful life insurance sales tips.
Generate Leads
After earning your license and choosing how you want to sell life insurance, you’re ready to start selling. You know you need to help clients understand differences in insurance policies so they can choose the plan that’s right for them, but first, you need to get those clients. So, how do you do that? Well, you will need to generate leads.
If you’re working as a captive agent, your employer may provide you with leads, usually by selling them to you. If you’re working independently, you will need to generate leads in other ways. Many independent agents purchase lists and some even engage insurance marketing organizations or field marketing organizations to help them with marketing and lead generation.
Even with help from another party, it’s always a good policy to make sure you also get leads the old-fashioned way—by networking and using referrals. Encourage family and friends to refer you.
Participate in insurance and other community events to get the word out that you’re an insurance agent. Remember to create a website and profiles on Facebook, LinkedIn, TikTok, and Instagram, and keep up with them regularly, engaging as much as you can.
Develop Your Sales Pitch
Selling life insurance to your leads is all about the pitch. You need to present yourself well, speak in the language your prospects understand (no slang or jargon), and demonstrate empathy with their situations. When you put yourself in their shoes, you can better explain how your insurance products will benefit them.
Potential clients are looking for a solution and benefits, not a list of features. Therefore, you should examine and understand how the features you offer solve problems so you can make appropriate solution recommendations. This is called solution selling, and it is more effective than just listing features like a 24x7 helpline or a one-click accounting report.
Many leads might think they don’t need life insurance or are reluctant to commit to the best policy, fearing the cost. Or, they might be required by a bank or law to purchase insurance and want the lowest-price option. In those cases, you should ask questions that will get them to focus on what could happen without the proper amount or type of insurance:
- If you passed away, how long would your family be able to live on your savings?
- How much do you think a funeral costs?
- What would happen to your job if you were permanently injured?
- If you’re injured or hospitalized for a long period of time, how would you and your family be supported?
After you get answers to those questions, you can explain how the life insurance solutions you provide can help them safeguard for those situations.
Partner With Other Insurance Professionals
Like lawyers and accountants, who can answer client questions that you can’t. Then, offer to answer insurance questions that they can’t as a way to get referrals.
Frequently Asked Questions About Selling Life Insurance
Below are common questions we hear about selling life insurance.
How to Sell Life Insurance From Home?
To sell life insurance from home you will need to either be licensed and insured as an independent life insurance salesperson or you will need to find an employer that will allow you to work from home while selling life insurance.
Is Selling Life Insurance a Good Career Path?
Selling life insurance can be a rewarding career path if you have the right skills, interests, and personality traits. Life insurance sales can provide lucrative commissions, the flexibility to work from home, and job stability as the demand for life insurance is generally consistent.
Is it Hard to Sell Life Insurance?
Yes, selling life insurance can be difficult especially if you struggle with discussing death and have a hard time dealing with rejection. To be a successful life insurance salesperson, you should be comfortable with sales technology, get a sense of satisfaction from helping people, and possess self-starter skills like persistence and confidence.
What are the Benefits of Selling Life Insurance?
Selling life insurance can offer both financial rewards and personal satisfaction. Some of the key benefits of selling life insurance are:
- High earning potential
- Flexible work environment and schedule
- Job stability
- Fulfilling work
- Opportunities for growth personally and professionally
What are the Challenges of Selling Life Insurance?
Selling life insurance can be difficult especially if you struggle with difficult conversations and rejection. Some of the other challenges that life insurance salespeople may encounter are:
- Competitive market
- Establishing trust with someone you just met
- Navigating regulatory compliance requirements
- Long sales processes
Ready to Start Preparing for the Life Insurance Licensing Exam?
If you’re excited about helping people plan for the future with the right life insurance products, your first step is earning your license. Health and life insurance license exam prep packages can help increase your chances of passing, so you can start your exciting new career.
