You want to become a life insurance agent? You do not know how to become a life insurance agent? Read on for tips and experience learned after years of joining our life insurance market.
1. Life Insurance Agent Salary
First, LIC doesn’t pay any salary to the agent
You will get some commission when you gets a new business to LIC.
You will be paid Good Commission from the first year premium payment of the customer which you had introduced to LIC. After that, you will get 2.5% of yearly premium as a commission rest of the policy years.
The more you brings new customers, the more you will get.
Comparing to Mutual Funds and life insurance both advisors will get the same commission percentage and in LIC both the customer and agent will be benefitted wherein Mutual Funds only mutual fund advisor and mutual fund manager will be benefitted. At the last customer will have to see some loss or profit along with tax deductions in the maturity you earns.
2. Is become a life insurance agent a good choice?
Become a life insurance agent is one of the most lucrative career options which you can find. It is because of the following reasons:
- It gives you the potential to earn unlimited income
- You can become an agent with a simple qualification of being a Class 10 pass-out
- You can own your own business without investing any capital
- You can work as per your own convenience
- You are your own boss and can decide how much you want to earn
- There is no retirement age
- You can sell insurance along with pursuing any other job or business
So, if you are looking to start your career, become a life insurance agent can give you the ideal platform. All you would need to do is become a licensed agent and your career would start.
3. Is it hard to sell life insurance?
Sales is an art that needs skills and passion. Just like any other type of art.
Sales is wide, some products or services are easy to sell, and others are way harder. Especially when selling an intangible and an unthinked-of gadget, or product. Life insurance is the best example.
Life insurance is an intangible product, ie: it doesnt have a real form that you can touch, see, or hear. It is just a pile of papers that contains terms and conditions and some numbers.
Life insurance is an unthinked-of product. Which means rarely you would meet someone who has thought of buying a life insurance.
So? What shall I deal with it? Especially if I have to sell life insurance to generate income? And how come life insurance selling makes very good income?
First, it is very important to understand that insurance is not a product. It is a service. But modern trainings prefer to call it a concept. So, you are selling the concept of peace of mind, and that the client’s family is safe at least. Once you sell that concept, you can sell anything.
Second, you have to understand that selling life insurance is different than selling anything else since you arent a salesperson in a shop and waiting for a client to step in to sell him. Instead you have to do the prospecting yourself , and try to sell them. So what is the difference?
A person stepping into a shop, a store, a showroom, knows that they need the product or service and they have come to buy it. But rarely one will ever think of stepping into an insurance company and buy a life insurance even if they needed it, most probably they do not estimate or know who much do they need it.
So the skilled life insurance sales person creates a sense of a need and urgency.
Life insurance is not easy to sell, well yes. A week or two may pass without selling any policy, but once you understand how to sell the concept, and create its urgency and need. Life insurance will be much easier.
Tip: watch your ratios! How many calls do i need to do to schedule a meeting? How many meetings shall i do to schedule a closing meeting? And how many closing meetings do i need to close a sale?
This is why the insurance industry pays the highest commissions than any other industry.
4. Advice on how to become a life insurance agent?
First, an agent normally takes at least 3–4 years in getting a taste or feel of life insurance selling. Success also will come after these many years only. So have patience. Mostly private insurers treat agents as a milch cow.
So they may not treat you humanly or may be they may not give you long rope to be successful. This creates avoidable pressure on an agent. Learn to overcome it. For example in LIC an agent gets 3 years to prove herself. This hand holding is needed. So speak to your unit manager or branch manager etc for hand holding.
Secondly, it is very difficult to sell life insurance through cold calling. Go through service route. Provide service to clients( may be dissatisfied clients) of any insurer. Such clients will not forget you.
Thirdly, get proper training . Training provided by insurers are generally not adequate. Learn yourself also. Knowledge is the biggest differentiator. This is the key on how to become a life insurance agent.
Are you sure you are doing something you like? Plus are you sure what you are selling is really good? If both answers are big “YES”, your tone gets confidence. Customer can see it. If any answer is NO., leave the profession or change insurer.
Have you informed all your relations and friends that you have taken this profession? This may give you confidence and social acceptance. Whether they buy insurance through you or not is aside. Seek referrals from them.
Never go for something called soft market by selling insurance to your relations. Only weak persons do it. Nobody knows if you will continue in this profession 5 years hence, so better avoid soft targets, if possible. Are you so helpless that you need such helps?
4.1 Some of habits you might get success with:
- Answers the phone within minutes.
- Do not try to sell you insurance you do not need.
- NEVER has pressured client to buy insurance.
- Brought documents to the client to sign.
- Truly represent the best needs of your clients.
- You will have to start small, even with family.
- Dresses plainly, speaks slowly and kindly.
Try to address groups on insurance. Say for example how to buy an insurance or what is the best term insurance etc. Your nearby college or school may get you a group of teachers to address. You may get a group through several NGOs that might be working in your area. Educate them so that they can take an informed decision. Rest assured, an educated customer will come back to you.
A lot will depend upon what insurer you have chosen to take agency with. If Insurer’s brand is good, you have to explain and sell the product only. If Insurer’s brand is not good, you have to explain and sell insurer first then only you can sell the product. So your efforts have to be doubled for same results.
May be you design a small survey format for customer satisfaction etc. And do door to door survey to get dissatisfied customer or a prospect.
Have you taken license of non life products. Get it. And also take agency of health insurance from a reputed health insurer. Non life insurance( like motor or household or fire) or health insurance are easier to sell. This could give you entry into an household or factory. have you trained yourself for group insurance? Learn it. This gives you access to colleges, factories, offices etc.
Make a list of prospects. Brain storm. From each take referrals. If you don’t sell 10–12 policies each year, your income will be too low to be attractive for you. Focus on number of lives covered, if you want to continue for long time. You may get one client giving 1 Lakh premium or 10 clients giving 10000 each.
Second route gets more referrals and gives you more chances of second sale in coming years. Plus you have at least 10 customers who give you word of mouth publicity. If they have 5 members in home each, at least 50 persons now know you.
If each has 8 friends, then 80 persons will know about you. This is how your prospect base increases with every sale, and you can en-cash it year after year. Branch may pester you for getting huge premium as they have to reach their target. So its a balancing act. Think of your sustained income and NOT this year’s income only.
Just keep your cool. Keep 3–4 years horizon. Acquire knowledge. Remember a customer’s NO does not mean NO, it means NOT NOW. So have patience, too. Now you know how to become a life insurance agent!