The simplest definition of an insurance agent is simply: A person employed to sell insurance policies.
In the real world, “insurance agent” gets used as an umbrella term describing any licensed person in the agency, but the more specific definition describes the agent as the “principal” of the agency.
The agent is the owner of the agency and is generally the person contracted with the insurance company to sell the products that they offer.
Example
There is a local Allstate Agency called the Jensen Agency. Sarah Jensen owns the agency, rents the building, and is the employer of Barb, the CSR (customer service representative), and Thomas, the producer. They all hold the same licenses with the state, but Sarah is the person who holds the contract with Allstate to sell their products, therefore, she is the agent.
Insurance Agent Job Description
A description of the duties performed by an insurance agent may be better summed up by examining the life of a busy agent:
Meet Sarah.
Sarah is the owner of the Jensen Agency, a local Allstate agency.
Sarah got into insurance sales a few years back while working as an insurance producer for a different agency in her town.
Through the years, she became a well known name in her community. People came up to her in restaurants all the time, just because they knew her from her work as the local insurance person.
One day, Sarah was approached by a representative from Allstate, and was offered an opportunity to open her own agency, selling exclusively Allstate products.
Sarah was sad to leave her agency, but she saw that this opportunity to own her own business looked too good to pass up.
Now that Sarah has owned her own agency for a couple of years, she has the ability to directly influence her income much more than she could as a producer. She sees that the more business she can generate for her agency, the better the business’s bottom line looks.
She has two employees, a customer service representative, and a producer, so the phones are covered, and when a new customer walks in, the producer takes care of the sale (most of the time).
Sarah’s main job is to make sure that the agency has a steady flow of new business coming to it. She is a member of several different community organizations, and much of her time operating the business is spent outside of the office.
She also makes sure that her internet leads and other inbound marketing practices stay operational, and that her producer stays busy with new sales.
Since she has the most responsibility in her office, she also has some stresses that her employees don’t feel. She has to make sure that her accounting is always in order, that the bills are always paid, and that she can always make payroll. She is, in fact, a true business owner.
Requirements to be an Insurance Agent
- You must be at least 18 years old
- You need a license to sell insurance for every state that your agency will sell in
- Some insurance companies will require you to hold a securities license (ex. Series 6 license) so that you can market and sell variable life insurance products
- There are no education requirements to get your license, but some insurance companies may require a certain degree in order to contract with them
- There will be a background check in the licensing process, and possible extensive interviewing depending on the insurance company you will be contracting with
Necessary Skills of an Insurance Agent
- Be a Self-Starter — No one will be looking over your shoulder to make sure that you are producing. You are responsible for your time
- Excellent Phone Communication — Much of your time will be spent on the phone with customers or prospective customers
- Excellent Written Communication — Many of your customers may choose to communicate by email instead of the phone
- Sales Skills — You can’t be bashful when it comes to insurance sales. You need to be able to ask for the sale, without being pushy
- Punctuality — If you say you will call someone at 3:00, and you call them at 3:10, you will lose the respect of your customers
- Positive Attitude — You will be working directly with the public at large. Some people are grumpy, and you have to handle yourself in a professional, positive manner
- Determination — As with all sales jobs, you will hear the word “no” a lot. You can’t become discouraged by this word
- Be an Extravert — If you have a difficult time starting conversations with people, this job may not be right for you
- Strong Business Acumen — You will be running a business, and therefore need to know the ins and outs of business operation
- Managerial Skills — Since you are the “boss”, you need to know how to properly manage a staff
- Stress Management — Being an insurance agent isn’t always a picnic – If you have a bad sales month or a member of the staff leaves, you have to be able to hold yourself and the business together in a professional manner
Insurance Producer Salary (By State)
Who pays an insurance agent? The agency, in most cases, pays the insurance agent. So then, who pays the agency? Depending on how the contract is set up, the agency is usually paid a percentage commission based on the insurance premiums that they sell.
The average percentage of the premium paid is generally between 6% – 15%, again, totally dependent on the agreement between the agency and the writing insurance company.
How a small business owner decides to pay their own salary is up to them. Here are the best numbers that we could find describing the salaries of insurance agents in each state.
| State | Salary Range of Insurance Agent | Average Income Per Capita |
|---|---|---|
| Alabama | $24,000 – $68,000 | $23,500 |
| Alaska | $28,000 – $39,000 | $33,000 |
| Arizona | $24,000 – $33,000 | $25,700 |
| Arkansas | $29,000 – $82,000 | $22,800 |
| California | $24,000 – $105,000 | $30,400 |
| Colorado | $30,000 – $68,000 | $32,300 |
| Connecticut | $30,000 – $67,000 | $39,300 |
| Delaware | $24,000 – $62,000 | $30,400 |
| Florida | $32,000 – $174,000 | $26,500 |
| Georgia | $24,000 – $105,000 | $26,600 |
| Hawaii | $38,000 – $65,000 | $29,700 |
| Idaho | $31,000 – $59,000 | $28,300 |
| Illinois | $29,000 – $180,000 | $30,400 |
| Indiana | $25,000 – $115,000 | $25,100 |
| Iowa | $31,000 – $83,000 | $28,300 |
| Kansas | $26,000 – $78,000 | $27,800 |
| Kentucky | $31,000 – $105,000 | $23,600 |
| Louisiana | $28,000 – $84,000 | $24,800 |
| Maine | $28,000 – $58,000 | $27,900 |
| Maryland | $25,000 – $59,000 | $36,300 |
| Massachusetts | $33,000 – $83,000 | $36,500 |
| Michigan | $24,000 – $103,000 | $26,600 |
| Minnesota | $24,000 – $84,000 | $32,600 |
| Mississippi | $34,000 – $76,000 | $21,000 |
| Missouri | $24,000 – $94,000 | $26,100 |
| Montana | $34,000 – $38,000 | $25,900 |
| Nebraska | $30,000 – $53,000 | $27,400 |
| Nevada | $33,000 – $82,000 | $25,700 |
| New Hampshire | $33,000 – $104,000 | $34,600 |
| New Jersey | $35,000 – $71,000 | $37,200 |
| New Mexico | $29,000 – $78,000 | $23,600 |
| New York | $29,000 – $137,000 | $33,000 |
| North Carolina | $29,000 – $166,000 | $25,700 |
| North Dakota | $26,000 – $48,000 | $33,000 |
| Ohio | $25,000 – $116,000 | $26,900 |
| Oklahoma | $29,000 – $179,000 | $25,200 |
| Oregon | $24,000 – $132,000 | $27,600 |
| Pennsylvania | $26,000 – $114,000 | $29,200 |
| Rhode Island | $25,000 – $52,000 | $30,800 |
| South Carolina | $25,000 – $156,000 | $24,500 |
| South Dakota | $24,000 – $26,000 | $26,900 |
| Tennessee | $29,000 – $206,000 | $24,900 |
| Texas | $29,000 – $157,000 | $27,100 |
| Utah | $24,000 – $107,000 | $24,800 |
| Vermont | $33,000 – $63,000 | $34,000 |
| Virginia | $25,000 – $170,000 | $34,000 |
| Washington | $24,000 – $67,000 | $31,800 |
| West Virginia | $29,000 – $55,000 | $22,700 |
| Wisconsin | $29,000 – $204,000 | $28,200 |
| Wyoming | $40,000 – $44,000 | $29,600 |
The information in this table is gathered from a couple of sources. Salary ranges were provided by individual members of Glassdoor.com. Income per capita figures are based on the year 2014, and gathered from this Wikipedia page.
The comparison between the salary and the average income is helpful in showing how this job type stacks up against the average job in the state. Take the information with a grain of salt, as the salaries are submitted by private individuals, and the average income per capita does not take state unemployment rates or other factors.
How to Become an Insurance Agent
There are a couple of different ways to become an insurance agent. The biggest decision you will make when exploring the opportunity is whether to become a captive agent (selling one brand) or an independent agent (contracted with multiple companies).
Each different company that you wish to contract with will have different requirements that you must bring to the table.
One thing that is a requirement for any direction that you take is licensing. You must have your insurance license to become an insurance agent.
Be sure to do your research before you jump into a contract with a company. Every opportunity is different, so be sure to pick the one that will suit your situation the best.
Insurance Agent Job Opportunities
If you’re looking for new job or to start your career in insurance, find an open position on StateRequirement’s Insurance Job Board.
Insurance Agent Summary
Benefits of the Job:
- Can be a great paying job
- You get to call yourself a business owner
- A large amount of control over your schedule
- Low physical labor
- Opportunity to build a sellable asset
Disadvantages of the Job:
- Can be high stress
- Can be repetitive
- Lots of responsibility resting on you
- Must obtain and maintain an insurance license