Are you interested in a career in life insurance but don’t know where to begin? Start by learning what a life insurance agent does, why it would make a good career choice, and how to become a life insurance agent.
Recommended: Interested in getting started? We recommend using Kaplan’s online study packages, which come with a 93% pass rate.
What are the Duties of a Life Insurance Agent?
Insurance is a plan that provides financial payments to beneficiaries when certain events happen. Insurance agents work with clients to determine which type of insurance and plan is best for their personal and financial situation.
There are different types of insurance, but the main coverage plans include life, health, property, and casualty insurance. These are available for both personal use and business use.
A life insurance agent specializes in selling life insurance coverage that provides financial payment to beneficiaries upon the policy holder’s death.
Life insurance agents work with clients to determine what coverage is needed, implement the plan, and follow up to stay informed on the client’s needs. While there are different types of policies within the life insurance industry, the basic duties of a life insurance sales agent always include:
- Meet with new and existing clients to learn their financial and personal profile
- Explain policy options to clients
- Review clients’ life insurance policies and evaluate for needed changes
- Renew policies when needed
- Maintain records and provide documentation to clients
- Marketing their services to potential new clients
Life insurance can also market and sell annuities as part of certain life insurance plans. You may be required to have a special securities license through the Financial Industry Regulatory Authority (FINRA) to sell securities-based annuities and life insurance products.
How Do I Become a Life Insurance Agent?
There are two main steps to becoming a life insurance agent: completing all pre-licensing requirements and passing a licensing exam. Before you begin, you will need to know what kind of insurance you plan to sell. In many states, you can choose to get a life insurance license or a joint life and health insurance license.
Life Insurance Agent License
A life insurance sales agent is required to be licensed in their state. Each license is specific to the type of insurance as well. The path to getting your insurance license varies by state, but can include:
- Insurance pre-license education courses
- Background check and fingerprinting
- Passing the state insurance licensing exam
The insurance licensing exam varies by state in both length and testable material. Taking a comprehensive, state-specific study course can help you prepare for the challenging insurance licensing exam.
Over 81% of our readers use Kaplan’s online courses — which come with a 93% pass rate — when preparing for their insurance license exam(s). For comprehensive study packages, StateRequirement recommends:
Some insurance agents choose to become licensed in multiple lines of insurance. Your state may offer joint licenses for two types of insurance that are often marketed together. These often include life/health and property/casualty.
Find out what your state requires to get your insurance license by using this guide.
FINRA Securities Licenses
Including securities-based products such as variable annuities in your insurance offerings can allow you to provide more customizable plans to clients. You must be licensed by FINRA to market and sell securities-based insurance policies. The type of securities license that you need to pursue depends on your role within your company.
Relevant FINRA securities licenses include the Series 6 and Series 7. They cover the main functions of financial services industry professionals marketing and selling securities, as well as regulations that they must follow.
The North American Securities Administrators Association also offers state securities licenses, Series 63, Series 65, and Series 66. You must also hold a NASAA license alongside your FINRA license to legally market and sell securities.
Series 6 license: The FINRA Series 6 license is the most commonly held securities license by insurance agents. It allows licensees to sell mutual funds, variable annuities, variable life insurance, unit investment trusts, and municipal fund securities. You must pass a 55 question exam to get your Series 6 license.
Series 7 license: The FINRA Series 7 license covers a wider range of securities-based products and is considered a more comprehensive license. At 135 questions, the exam is considerably longer than the Series 6 test. The Series 7 test is often the most advanced licensing exam financial service industry professionals need to pass for their position.
Series 63 license: The NASAA Series 63 license is designed for those who take and process orders for securities-based products. The Series 6 and Series 63 are common licenses held by insurance agents.
Series 65 license: The NASAA Series 65 allows license holders to offer financial advice related to securities. Financial advisors and planners more commonly pursue the Series 65 license.
Series 66 license: The Uniform Combined State Law Exam, or NASAA Series 66, covers all of the functions of the Series 63 and Series 65 in one test and license. With this license, you will be able to offer financial advice on securities-based products, as well as take and process sales orders.
To take any of the securities exams, you must first pass the Securities Industry Essentials (SIE) exam. This introductory exam covers the basics of securities. Passing the SIE exam can be a great way to make your resume stand out when applying for a job in the financial services industry. The SIE exam is also your first look into the format and structure of the FINRA tests.
Anyone can register for and take the SIE exam but you must be sponsored by a FINRA-member firm, company, or organization to take any of the other securities exams. Once you register for the exam, completing a study course will help you prepare to pass it on your first attempt.
Is Selling Life Insurance a Good Career?
If you like working with people and helping clients plan for their family’s financial future, then becoming a life insurance agent may be the right career path for you.
According to the Bureau of Labor Statistics, the insurance sales agent profession is expected to grow by 10% by 2028, compared to just 5% growth in all occupations. While you are not required to have a four-year college degree to become a life insurance agent, taking courses in marketing, sales, and customer relations can all help you develop these important skills.
Knowing a second language can help to grow your client list. There is a large demand for insurance agents who know the technical vocabulary of insurance and can explain coverage and policies to clients who do not speak English.
Captive life insurance agents work for a single company selling their life insurance products. Being part of a larger team comes with benefits, such as a more established company reputation and network, marketing assistance, experienced mentors, retirement plans, and healthcare plans.
Independent life insurance agents start their own business and can market and sell a wider variety of life insurance plans and products. If you prefer the entrepreneurial route, becoming an independent agent may be the right path for you. As an independent agent, you retain control of all business decisions and client interactions.
Consider the pros and cons of working as a captive agent or independent agent as you think about your career path. When you are ready, you will have the knowledge and plan to be an outstanding candidate for an open life insurance agent position.
How Much Do Life Insurance Agents Make?
The median salary for all insurance sales agents was $50,940 in May of 2019. Insurance agents often work on commission. This means that they receive payment when a new or existing client purchases a life insurance policy. The work that life insurance agents can expect to receive a commission for are:
- Purchase of new policies
- Increase of coverage
- Renewal of existing policy
Some insurance agents do earn a set salary, most often when they work for a firm or company. They can also work on a combination of salary and commission. Some even earn bonuses when they meet the company’s sales quotas or goals. Read through your employment contract to determine what pay arrangement your employer uses when you become a life insurance agent.
For more information, have a look at our How Do Life Insurance Companies Make Money article.
How Many Hours Does a Life Insurance Agent Work?
Most life insurance agents work full-time, at least 40 hours per week. Meeting with clients can occur during normal business hours, but many agents find that they need to be available later in the evening to accommodate their client’s work schedule.
Your work will be a mix of meeting with clients and completing paperwork. Successful insurance sales agents work well with people and have great attention to detail. You will meet with clients to develop plans as well as beneficiaries to go over benefits after their loved one passes away. You should be comfortable and reliable working with clients, especially in emotional situations.
Talk to experienced insurance agents to see what skills and training helped them in their careers. These can include training on office tools and computer systems, joining professional networking organizations, or working with a mentor.
According to the Bureau of Labor Statistics, 61% of insurance agents in 2018 worked in insurance agencies and brokerages. Working with more experienced agents can help you develop your own skills and take advantage of the organization’s marketing teams to connect with clients.
12% of insurance agents were self-employed. If you want to work for yourself and build a business, getting experience at a larger firm before venturing out on your own as an independent insurance agent can be a great career path.
Some insurance agents worked directly for insurance carriers, but these made up a small minority of positions: 5% for direct health and medical insurance carriers and 9% for direct carriers for all other types of insurance.
When you are ready to begin your job search to become a life insurance agent, the StateRequirement Insurance Jobs Board can help connect you with potential employers, find the job that matches your skills, and propel you on the path to a rewarding career as a life insurance agent.