Make Money by Selling Life Insurance Policies

Making money as a life insurance agent can be a rewarding and a lucrative job. There are many people who are in need of life insurance and they only need someone who can be able to convince them why they should buy life insurance policies. Many insurance companies are also very generous when it comes to rewarding their insurance agents for a job well done.

The other good thing about working as a life insurance agent is that, your earnings is not limited on your initial transcation. Once you have managed to get some well established clients, you can earn some residual income over a very long period of time or even life time.

How much money a life insurance agent makes depends on many other factors, such as the insurance company commission plan, and how many life insurance the agent is able to sell.

There are two main types of life insurance policies; the term and permanent life insurance policies. Each one of them has its own sub types. Most term insurance policies has a coverage of up to 95 years with initial premium distributed in different terms such as 10, 20 or 30 years. The permanent life insurance, which consists of whole life and universal life is designed to cover the whole life.

The commission that an insurance agent earn depends on the type of insurance that he has selected to sell. On average, insurance agents are paid a commission ranging from 30%-70% on term life insurance and 90%-105% on whole life policy.

This is the average first year commission. For the proceeding years, the commission is much lower and ranges from 6% for permanent life insurance policy and 4% for term life insurance policy.

For example, let us assume that you have a client looking for cheap life insurance quotes. The insurance company that you are selling insurance policy for, offers the following quotes;

For Term Insurance Policy

  • The insurance is valued at $200,000
  • It will last for 30 years
  • Premium payment is $30 per month.

For Permanent Life Insurance Policy

  • The insurance is valued at $200,000
  • Last for whole life
  • Premium payment is $120 per month.

The insurance company is paying you a commission of 40% and 90% for term and permanent insurance policy respectively. Your initial commission would be calculated as follows:

  • 40/100x$30 (premium payment/month for term life policy) = $12
  • 90/100x$120 (premium payment/month for permanent life policy) = $108

This is the average amount of money that the life insurance agent would make each month for a period of one year. For the proceeding years, the rate is slightly lower. At 4% and 6% commission respectively, he would make;

  • 4/100x$30 = $1.2 (for the rest 29 years)
  • 6/100x$120 =$7.2 (for the remaining policy period)

From the above calculations, you can clearly see that permanent life insurance pays higher commission in comparison to a term insurance policy. However, it would be very difficult to find many clients willing to purchase this kind of insurance policy since it is more expensive.

The other reason why most people opt for a term insurance policy is because, they feel they do not need insurance when they are already in old age and since the maximum coverage period of term life insurance can be up to 95 years, term insurance is definitely more than sufficient.

However, the insurance agent should be able to select the best plan that fits well the needs of the client’s without been driven by the monetary gains.

Life Insurance Sales Tips

The best ways to sell life insurance is when you present it as an asset or a tool that can be used to solve unforseen problems in the future. For example, if you are talking with a client who is worried about funding his children education in the future, you would show him how life insurance could be used to fund his children education.

The important point here is that, any insurance agent should make sure a client understands clearly the benefits of investing in a life insurance. Most people are always ready to listen to what an insurance agent says since having a life insurance offers some form of financial security.

Do not attempt to sell a life insurance unless you are licensed. Anyone who wishes to sell life insurance is required to sit for an insurance exam and to obtain an approved insurance licence. After completing the insurance exam and obtaining a insurance licence, then you can apply to different companies to become an insurance agent. Once you are approved, you are issued with an agent number.

You must have a reliable internet connections and a computer or laptop. Most insurance companies use internet to communicate or to send important client information and forms that may need to be downloaded. Since you will be meeting alot of clients in their homes, having a laptop is more convenient.

You should have a reliable means of transportation. Insurance agents tend to travel alot and having reliable and a professional looking vehicle can make a big difference in the way a client perceive you as an insurance agent.

You should possess some good interpersonal skills. Becoming an insurance agent involves dealing and communicating with different people and generating leads for your insurance company. Presenting yourself in a professional way and making sure that your clients understand that, you are there to care for their insurance can have a significant influence between making a sale and leaving empty-handed.

Lastly, if you are a newly registered insurance agent and you are finding it difficult to keep updated with every company’s updates and new products, you can decide to hire a general agency for a small commission.

General agency acts as a middleman between the insurance company and the agent. The work of general agency is to provide all necessary information, research, documents or paper work and to help in generating life insurance quotes for the new clients. By contracting a general agent, the insurance agent can now concentrate on selling more insurance policies.

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