It’s a rewarding and meaningful career.
You have to love helping and serving people.
You have to love studying, and using your acquired knowledge to help and serve people.
You want to be vigilant and compliant to rules. (because sometimes, life happens and we get complacent and things expire!)
First things first, you want to apply for a license.
What is a Life, Health and Accident Insurance License? (also known as a “General Lines Agent License”) #
It is a license that allows a person to sell, and give advise on Life, Health and Accident Insurance Products.
Having this type of a license, someone can be a “Captive Agent” or an “Independent Agent / Broker”.
What is a “Captive Agent”? #
A “Captive Agent” is someone who works for one Insurance Company / Carrier, and is only authorized to sell the Insurance Products of that specific Insurance Company. They often have a base salary and they earn smaller percentage of commissions as well from the Insurance Products they sell. Their “leads” or prospects are usually assigned or provided to them.
What is an “Independent Agent / Broker”? #
An “Independent Agent / Broker” is someone who usually partners with an Insurance Marketing Organization (IMO) who facilitates the processing of contracts of agency with different Insurance Carriers. The IMO earns an override percentage out of all the sales that the “Independent Agent / Broker” makes. The Independent Agent / Broker also has to spend for acquisition of leads and prospects, independently. It’s an all commissions type of work. (That’s why I wrote “you have to love and serve people”, because “an Independent Agent / Broker” has to have that entrepreneurial spirit in their being to gain that intestinal fortitude to ride out the ups and downs of this career.
What does it take to be a Licensed Life Insurance Agent? #
1) You have to prepare for the State Exam. There are Exam Preparation Courses you can take (use goo gle). You have to enroll in a Course Provider accredited by the State, so you only prepare and study. Give yourself a good week to FULLY dedicate to studying (there’s a lot of topics to cover and understand). Some do 2 weeks of dedicated study time, but for me personally, that’s what I did. Gave it my full undivided attention and understood concepts.
2) Go to your State’s Department of Insurance and print out the requirements for “General Lines Agent” exams (includes, Life, Health, Accident and HMO).
3) Schedule FBI Fingerprinting. Keep the receipt number, you will need this to complete your State Application for your License.
4) Schedule your State Exam 7 days out.
5) Study, study, study.
6) Take the State Exams. It’s a proctored 4 hour State Exam. You’ll know the results right after the 4 hour test. The Proctor will print out the Test Results with your picture in it.
7) When you get home, you can go to your State’s Department of Insurance and send in your application, giving your Test Results Code, and your Fingerprinting Receipt Code.
8) Wait for their email to let you know your License is Active.
9) Go to the the National Producer Registry also to get your National Producer Number. (Different from your State License Number).
10) Look for an IMO to partner with. AND HERE IS WHERE I WILL WARN YOU, so pay attention:
10.1) Interview THEM first,
10.2) Ask how many Insurance Carriers they are contracted with,
10.3) Ask what their Commission Structure is with these Carriers,
10.4) Ask if they provide some type of sales training (or do you have to watch tons and tons of youtube videos to figure things out for yourself)
10.5) Ask if they themselves (the IMO) sell leads.
What I have learned, in my first go round more than 2 years ago, was “I did not know what I did not know”. Don’t waste money on buying “aged leads” because you are going to go down that sad sad place of getting yelled at over the phone by people who have been harassed with phone calls for many many years!
Unless you want to “practice”.
Getting yelled at.
And not crying.
Like Rambo.
So in this go round, for me at least, I’m pulling my MBA hat out, and putting it on.
I’m doing the good old marketing and advertising the business myself through paid ads.
Direct Mail.
Those who want it, will respond.
Simple.
11). So when you find an IMO, pick your Insurance Companies to contract with. The IMO will check this first and then when everything is in order, they will submit your Applications to the Insurance Companies.
12) One by one, you will receive the Welcome Emails from these Insurance Carriers that will usually include:
12.1) Your Agent Number – different companies call us differently, some call it “Producer #” “Writing #” “Independent Consultant #”
12.2) The Company Agent Portal where you create a Username and Password, and then you can Run Quotes on the products, Create Product Illustrations to give to your prospects (Usually products that have Cash Value like Whole Life Insurance Product or Indexed Universal Life Insurance Products require Illustrations to be attached to the Life Insurance Application). You can also go into specific product trainings and order sales materials and they all ship it to you free.
13) Do good business, help and serve people, help protect their families with Life Insurance.
14) Be a product of the product. Make sure YOU have Life Insurance, so you can be confident in selling what you yourself have.
And with all the face to face interaction you would do when you schedule interviews, make sure you are also protected because we never know what lies ahead.
Who Pays the Independent Life Insurance Agent? #
The Insurance Carrier, in the Agency Contract, stipulates the Percentage of the Commission Payments directly deposited to the bank account of the Agent. The IMO, who is also considered like an “upline” of the Agent, also gets a percentage of the Agent’s Sales Production, also paid directly by the Insurance Company to the IMO Upline’s bank account.
The Consumer / Client DOES NOT PAY the Agent Directly. It is the Insurance Company who processes the Insurance Payment Premiums.
The Life Insurance Policy Contract is between the Consumer / Client AND the Insurance Company. The Insurance Agent only facilitated and assisted in the processing of the Life Insurance Policy Application. Some Cases require more research and Underwriting, but it depends on the Health Status of the Client / Consumer / Applicant.
The Insurance Company gives an “Advance” to the Agent.
What happens if .. #
If the Client decides to cancel the policy within a year, the Agent pays the Insurance Company what is called “clawback” or “chargeback”, “insurance debt”.
If the Client dies within a year, the Agent also pays the Insurance Company what is called “clawback” or “chargeback”, “insurance debt”.
If the Agent doesn’t pay the “insurance debt”, this debt “rolls up” to the “upline IMO”.
That’s why there is also that risk to the IMO.
What are other business costs for maintaining your General Lines / Life Insurance Agent? #
1) Most AM Best Carriers require Errors and Omissions Professional Insurance of at least 1 Million/3 Million Coverage.
2) Continuing Education Courses – Classroom Equivalency 24 hours. Usually 4 hours of Law and Ethics, and at least two Hours of Anti Money Laundering (AML) Courses.
3) Sales and Marketing Budget – either buying leads, or self generating leads through advertisements or Direct Mail drops in bulk.
4) Technology Expenses – domain names, webhosting. (I don’t and will not pay for any CRM because I developed my own. Also with all this deepfake AI things going on now, it is kind of scary how there are autodialers that can call hundreds of numbers at the same time, and then a recording is automatically played – and you think you’re speaking to a live person, yikes). Anyway, it’s a person to person transaction. So, it’s all shiny ball syndrome. Reminds me of the gold rush. It wasn’t the gold miners who got rich, it was the people selling the shovels and wheelbarrows. I learned the hard way when I started three years ago or so, and those that get victimized that way, really just have to be careful next time.
Don’t get duped. Generate your own leads and market to your own prospects. It might take time, but hey, that’s what being an INDEPENDENT Broker Agent is all about.
5) DBA permits, not required, but it’s useful when or if you want to build “business credit”. You need a DBA at least, to open a business savings account.
6) Gas money – for all the driving you would be doing. If you are doing tele-sales, then you’d need …
7) Pizza money. Kidding.
This was supposed to be “Knowledge Base”… it got personal a bit sorry, but my personal experience became Knowledge to me. And I want to share 🙂