When the teacher goes around an elementary classroom and asks what kids want to be when they grow up, a string of predictable answers typically follows: police officer, firefighter, nurse, teacher, astronaut, etc. It’s not at all likely a student will jump up and exclaim proudly, “I want to be an insurance agent!” The late old-school comic Rodney Dangerfield’s signature line was, “I get no respect.” Due to often humorous stereotypes (the Ned Ryerson character in the movie Groundhog Day), a career in life insurance may not be viewed with the respect it deserves.
There are many types of insurance including life, health, property, casualty, automobile, etc. For this article, we’ll focus on life insurance agents and health insurance agents (specifically, health insurance agents who sell supplemental health insurance).
The Importance of Supplemental Health Insurance
Many if not most people obtain their primary health insurance coverage (major medical) through their employer. For some people, this may be enough, but for others, their circumstances may make it desirable for them to obtain supplemental health insurance coverage such as cancer, critical illness, hospital, or accident insurance. Some employers also make supplemental coverage available to their workers separate from the primary health insurance. The difference between supplemental coverage and major medical coverage is that the supplemental products belong to the employee and are not tied to the employer in the same way as major medical. Supplemental coverage goes with the employee even if they change jobs and pays the individual directly rather than a provider, and it pays in addition to any other coverage an individual may have.
Individual Life Insurance is Based on Specific Needs
Many employers also offer their employees some form of group life insurance which often may terminate if the employee leaves the company. In any case, life insurance available through an employer is designed for the broad needs of the group rather than the individual needs of each employee. For example, the life insurance needs of a young, single person are typically quite different from those of a 35-year-old married worker with children, or a single parent. Taking advantage of life insurance offered by an employer is a smart idea but it also makes good sense to look into individual life insurance coverage that can be tailored to an individual’s specific needs.
Where do insurance agents fit in?
By law in the United States, insurance must be sold by individuals licensed to sell in their state. Not only that, but they must be specifically licensed to sell the types of insurance they offer. The insurance professional’s job is to help clients navigate what many people believe is a complicated array of products. This is done by meeting with clients in person, virtually, or by phone to discuss the unique needs and budget of each client, and matching those needs to an appropriate insurance product.
Most provinces will require ongoing Continuing Education (CE) hours each year to maintain your license. Check with your province’s insurance regulator website for information on how to get the CE hours you’ll need.2
What are the requirements to become an insurance agent?
Although the process for becoming a life insurance agent in Canada is similar throughout most of the provinces (except Quebec), it’s always a safe bet to get the most current information regarding certification and licensing through your provincial insurance regulator. Doing so will ensure you are on the right path to achieve success in your new career selling life insurance!
Becoming an insurance agent is not as complicated a process as you might think. Individuals need to:
- Be at least 18 years old1
- Have a high school diploma or the equivalent, such as a GED2
- Complete pre-licensing education ‒ determined by the state in which the aspiring agent wants to sell
- Pay licensing fees and pass the state licensing exam
- Pass background check, including fingerprinting in some states
- Complete continuing education to keep or renew your license
What else?
- Decide which type(s) of insurance you want to sell. Remember that you will need a separate license for each product.
- Decide where you want to sell. If you want to sell in multiple states, you will need to complete the licensing requirements for each state.
- Research opportunities for agents your area. Some companies may hire you before licensing and may have their own processes to follow in addition to the general state requirements.
- Depending on the structure of the company you choose to work for, you will be either a captive agent or an independent agent.
- When you are a captive agent, you represent only one insurer or carrier; you are exclusive to that insurer. Typically, these are larger national or even international insurance companies that offer the advantage of having a strong marketing identity; brand recognition. Also, because it’s only one carrier dealing with its own products, the company likely has streamlined processes that can make it easier for the agent.3 If you want to open your own agency office, in most cases, the company will provide you with training and operational support. A captive agent must follow the rules and guidelines of the company they work for.4 Captive agents may be full-time employees or independent contractors.5
- An independent insurance agent sells insurance for multiple companies and because of this, they can compare rates among similar products to get the best fit for their clients. This type of agent is often referred to as a broker, and they represent their clients. If you are an independent agent and you want to offer a line of insurance that you currently don’t carry, you find a company that provides it, contract with them, and begin writing for them as well.4
Whether you want to sell life insurance, health insurance, or other insurance products, the employment of insurance sales agents is projected to grow five percent from 2019 to 2029, faster than the average for all occupations.6 Although many clients do research and purchase insurance online, agents still needed to help clients understand their options and choose a policy that’s right for them.6 With no special degree required and average median pay of $50,940,6 insurance sales deserves more consideration as a career choice … and more respect.
- CPMI Professional Development, How to Become a Licensed Insurance Agent , (October 21, 2020)
- Chron, What Degree Do You Need to Be an Insurance Agent? (October 21, 2020)
- Indeed Career Guide, Guide for How to Become an Insurance Agent, (October 21, 2020)
- State Requirement, Captive Agent vs Independent Insurance Agent (October 21, 2020)
- Investopedia, Captive Agent (October 21, 2020)
- U.S. Bureau of Labor Statistics, Occupational Outlook Handbook (October 21, 2020)
Categories: Careers in Insurance, Insurance Agents