This article explains the nature of the job of an insurance agent, types of insurance agents, their average income and how to become an insurance agent.
Insurance sales agents sell different insurances as auto, home, life and health insurance. In this highly structured field of work, the agent must be licensed by his state. Insurance has always become a prominent subject in social media. They represented the most remarkable TV ad promotions. Nobody can overlook the appealing jingle “Nationwide is on your side” or Allstate’s memorable “Mayhem” character that left an appealing impression in the mind of the audience.
Most of the insurance agents work independently or brokerage, as company employees buy or sell goods for clients. Independent agents most of the time have irregular hours but in comparison with the agents who work for an insurance company in an office with a fixed salary, they may have more controlled work plans. The reason behind this is to get the revenue in their career and to earn an appropriate commission income that can be used in some other occupations.
However, 20 % of insurance agents are self-employed and take commission with every single
client. The commission is the most important attractive part for the agents that gives them the motivation to work with more determination. The more effort they will make, the more commission they will attain.
Some prominent types of insurance
Home insurance is a subtype of property insurance that fulfils the damages of a person’s house and belongings. It usually recovers four types of damages of an insured home; these are interior and exterior damage, damage of personal possessions, and injury that arises while on the property. When an insured homeowner will claim for any of these damages, he will get the payment from the insurance company.
The purpose of life insurance is to give the protection of the family members of the dead one while covered by the policy. The life insurance policy is usually designed to pay the cash or other financial objectives of the grieved family. However, families should evaluate their life insurance packages and plans frequently and make amendments to meet changes according to different situations.
Health insurance is also known as medical insurance is a kind of insurance that goes when a person is suffering medical expenses. It deals with the insurance due to the damage from accidental death, covers all kinds of medical expenses and provides the best suitable treatment in the case of disability. There are two types of health insurance. The first covers the Indemnity Plans and the second is best applicable for the Definite Benefit Plan. The indemnity plans include hospitalization costs from the sum assured. While on the other hand, Definite benefit plans recommend lump sum payment on the discovery of illness.
The use of Travel insurance is to cover your losses when you face major problems during your holidays or when you are travelling abroad. Travel insurance could save you a handsome amount of money if something unexpected happens. The sufferings during travel can be trivial, like a delayed suitcase or it can be substantial when you face the difficulties of last-minute trip cancellation or having a medical emergency out of the country.
The purpose of car insurance is to cover your damages even when you are at fault during a car accident. It is a requirement by law to have car insurance in most of the states. The car insurance company pays the other party’s medical bills, recovers the impairments to their vehicle and pays the losses or other damages.
Commercial insurance agents are bound to sell property damage and liability policies. Commercial agents work in the field with customers. In simple words, commercial insurance works to protect businesses that are responsible to cover different types of insurance, such as public liability insurance, professional indemnity and employers’ liability insurance.
Just like health insurance provides medical facilities to humans, Pet insurance gives money relief during the veterinary treatment of your pet. It also pays you the cost of a dead, lost or stolen pet. If your pet causes damage to someone’s property or harms someone, you will get paid by the insurance company.
What are the requirements for an insurance sales agent?
High school graduates qualify for most types of insurance positions however, certain specialized Sales positions require college graduation. Adequate knowledge of specific lines of insurance is mandatory and continued education is required to retain state license and to stay updated on knowledge of the insurance field. In case you are interested in helping protect the well-being and security of the public then Being an insurance agent will give you job satisfaction. Entry into the insurance agent field is comparatively easy and you can choose your work environment and this career provides rich economic dividends. Knowledge of core responsibilities and educational inclinations will let you decide whether a career as an insurance agent is suitable for you?
Roles and responsibilities of an insurance agent
As It is discussed earlier that an insurance agent is responsible to sell insurance policies according to their company’s demand in case of a customer’s calamity. They develop strategies of insurance to assess the needs of a business or individual and offer insurance plans that meet their criteria and provide them financial benefits in difficult situations. Furthermore, agents usually focus on a certain type of insurance for instance that is related to health, disability, property, casualty or long-term self-care.
Moreover, some sort of insurance agents also work to offer financial planning services to retired clients or those who want to invest their pension for future safety. The task of an agent is to pick out some specific policies or to sell other business packages or goods. They help their client to choose the best suitable policy. Similarly, they acquire new clients through various modes of contact like mail, phone, or other online media solicitation. They also work to upgrade beneficiary’s information when it is needed. Most of the time, the insurance agents are the best communicators and provide their excellent communication skills to convince their customers for certain insurance plans.
How much does an insurance sales agent earn?
The average salary of an insurance agent varies according to different countries and companies that offer insurance policies. However, if we talk about the expected salary per hour or every year, the estimated pay for an Insurance Agent as of Oct 2021 in the United States is $24.64 per hour. While at this time, the majority of Insurance Agent earnings range from $14.66 to $29.09 across the United States. The differences between pay ranges for an Insurance Agent differs significantly (by as much as $14.42), which is a clear sign that chances for improvement and increased pay depend on skill level, education, certification, location, additional skills, years of experience and your professional attitude.
According to the 2019 review of the US Bureau of Labor Statistics, the expected income of an insurance agent is $50,940 per year on average. The lowest 10% in the industry produced more like $28,000, and the highest 10% got over $125,000. Your earnings depend on the company and the type of insurance you work for.
Average base salary of insurance agent
The latest estimation of the average base per year salary according to the United States as of 30th Oct 2021 is $56,392 per year. However, the range normally falls between $47,768 and $59,000.
Best-paying cities for insurance sales agents
In the United States, some cities pay more than others. Specifically, in metropolitan cities, the average income is the highest for this profession. These famous cities include San Francisco, Birmingham, St. Cloud, New Bedford, and Fond du Lac. The average salary’s estimation of San Francisco, California per year is $109,960 while in New Bedford it is calculated as $103,050 which is a bit less than San Francisco. In Birmingham, an insurance agent per year income is $97,130. Similarly, St. Cloud comes in the fourth number and the salary of the agent here is estimated as $95,970. The Fond du Lac estimation of a yearly income of insurance agents is @95,710 which is almost the same as St. Cloud.
Likewise, some other highest paying cities of the United States are Sunnyvale, Santa Rosa, Cambridge, Vacaville, New York City, Fairfield, San Mateo, Lynn, Anchorage and Baltimore.
The top best-paying states for insurance sales agents
The highest paying states for insurance agents in the United States are Massachusetts, the District of Columbia, New York, Wisconsin, and Minnesota. In these states, the salary of an insurance agent is considered higher than in other states.
Pay of average insurance sales agent vs. other best jobs
According to the average estimation of 2019, the comparison between the pay of insurance sales agents with other best jobs in the United States was made and some very interesting results were found. The results revealed that the earning of an insurance sales agent in the year 2019 was $67,780. Though, if compared to other jobs like Sales Representatives who made $71,110 in 2019. Nevertheless, the Customer Service Representatives earned in the year of 2019 not more than $37,320. On the contrary, the Receptionists earned less than insurance agents in 2019 and their average salary estimation is about $31,250, which was about half of the insurance sales agents. In the same way, the salary of a Retail Salesperson in 2019 was $29,360. Thus, The difference can be seen in the salaries of sales agents and other prominent job applicants.
Ranking in best sales and marketing jobs
In all sales and marketing jobs, the insurance sales agents ranked as # 2. They are ranked according to the services they offer and other abstract factors.
How much job satisfaction does an insurance agent have?
The middle-aged man in America works well and Most of the time they enjoy this job and adopt it as a career. The employees as insurance agents are usually satisfied as they have a job with low-stress level, with the chance of promotion and a handsome salary. But some factors reduce their job stress and make them satisfied. These factors include bonuses, tips, commission, overtime pay based on their work experience.
For instance, at the start of work, the insurance Agent with less than 1 year of experience can earn an average total pay of $34,601 based on 229 salaries. Similarly, within 4 years of experience, an Insurance Agent can make an average compensation of $36,146 based on 1,344 payments. Likewise, an Insurance Agent with 5-9 years of experience can produce an average total compensation of $40,023 based on 594 payments. It increases day by day and with 10-19 years of experience, he makes an average total benefit of $44,119 based on 753 salaries. On the contrary, in 20 years of experience, an employee’s average total compensation is $48,194.
Insurance agents salary of 2020
As of 2020 salary estimation of an Insurance agent according to the U.S. Bureau of
Labor Statistics is $50,600 per year. But there is the fluctuation of figures according to experience. For instance, the lowest 10% salary is less than $27,500, and the highest 10% salary can be estimated at more than $125,610.However, it depends on the company where they work and the type of insurance they are working on. Equally, it also depends on other extra benefits like commissions, bonuses and other tips etc. However, the commission is one of the best-earning factors for the insurance agents and most of their income is based on commission.
Type of insurance agent
The two prominent types of agents are captive agents and independent agents. Their
salary differs according to their type and nature of work.
1. Captive agents
Captive agents are bound entirely to one insurance company’s products. They have a
limited margin and can sell only one policy of an insurance company. However, it is difficult to achieve a sale for the captive agents. They usually have commission according to per sale and their earnings depend on the yearly or seasonal bonus.
2. Independent agents
On the other hand, the independent agents work for their benefit and do the marketing for them. Although they can not get the benefits from any insurance company, they have multiple opportunities to grow their business. The biggest advantage of an independent agent is that their development depends upon their struggle. The more they will work hard, the more they have the chance of growth.
Volume of commission
The percentage of each commission increases the level of earning as an insurance agent. If you are working as an independent agent, you can largely earn a much higher ratio of your commission. While a captive agent will receive a smaller percentage of the policy price. The average commission of the captive agent is around 5-10% of the policy sold, while an independent agent may receive a 15% commission of the policy sold.
The transition from captive to an independent insurance agent
Usually, an insurance agent starts working as a captive agent and remains happy to work with the company’s policies. But some feel frustrated because they want to provide better customer services with improved choices. They feel that their hands are tied and they are unable to present what they need. The central feature of the insurance industry is to help people to improve their investments and manage risks. So, the transition from captive to an independent agent is often more logical. It gives you the freedom to work as you want and offer the customer the best suitable plans.
Independent agents can suggest their customer’s many deals at different price points. They know that customers will choose the more comfortable plans. In the same way, they can gain more commission than the captive agents. Due to these mental and financial incentives, many independent insurance agents encourage others to switch from captive to independent insurance agents and work with freedom.
Starting an insurance agency from scratch or buying an existing agency?
When you start your insurance agency from scratch, you might face difficulties in making bestselling marketing plans, hiring other employees, building customers’ trust and generating initial cash flow. To create the best reputation among customers and provide them with the best services among other insurance companies needs lots of effort and planning.
Purchasing an insurance agency involves unique risks and difficulties that are not relevant to other industries. Many important issues are involved in purchasing an insurance agency. Therefore, it might be a better option to buy an existing agency rather than to create a new one. The reason behind this is that you become familiar with the current cash flow, can work with already familiar and experienced employees and can work with already existing clients. However, you still need to build your reputation for better results.
Therefore, either you are starting from scratch or buying an existing agency, it should be kept in mind that both require good planning and better customer service. There is no easy way to get the progress quickly without any determination and there is no shortcut to success.
How do you stand out as an insurance agent with so many competitors?
When you work with your insurance agency, the most challenging task is to stand with your dignity and face the competition. With the changing environment and diverse business strategies, it is tough to build a good reputation in the business industry. Completion is everywhere in all kinds of business and cannot be overlooked.
However, there are three simple elements of business that can distinguish you from your competitors. These are:
- Sales presentations
- Generating leads through social media
- Immediate response
The first important thing is to present your sales differently. You should focus on the demands and requirements of the customer’s needs. During your sales presentation, you should deliver what your client wants to know. You should learn about their needs and stay focused on them. You have to work as a psychologist and read the mind of the client. Therefore, working as an expert, build a strong relationship with your client. Nevertheless, when one client is satisfied with you, then definitely he will tell others about your products.
Generating leads through social media
Spend time with other people and build your trust among them. Be active in social media platforms like Facebook, Twitter, LinkedIn, Instagram etc. Make your website, hire an SEO team and find your potential clients from the internet. The more you will be social, the more you will be trustworthy and can sell your product easily.
You should offer superior customer services and make yourself available to the client. Your immediate response when answering the call, responding to their emails and messages should be a must.
Being an insurance agent is not an easy task. Whether you love it or hate it depends on the abilities of the workers. If an insurance agent is motivated to make this job his career, he will work hard to gain his goal either to work as a captive or independent agent. But it is not realistic to think that everyone can do this job with a good salary.
If an employee is motivated, has excellent sales skills and is ready to generate leads through social media networking, then he will generate a good position in this field. Your passion to meet and convince others about your policy will make you superior to your competitors. But the most important thing is to make you visible and distinguished in internet marketing and save your future lead generation.