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What is an Insurance Agent/Broker?
An independent insurance agent and broker works with many insurance companies to provide the optimal coverage for each client. They are not employed by insurance companies, but rather they might receive a commission based on the sale of each policy sold. Insurance brokers will work with all types of insurance, including home, life, business, health, property, and more.
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Steps to Becoming an Insurance Agent
Each state and employer will have their own requirements to become a insurance agent. In most cases, an employer’s requirements for insurance agents will be more stringent than the state’s requirements. You will be required to complete a state license to become an insurance agent regardless of your education level. Most employers do not expect you to have direct work experience as an insurance agent as you will receive company training to learn on the job. It is possible that you might have to complete a certain number of hours in training before you can apply for licensure. You might also be required to continue your education.
Step 1: Earn a Bachelor’s Degree
Step 2: Complete an Internship
Step 3: Obtain a State Broker’s License
Step 4: Secure a Job
Step 5: Continuing Education
Step 1: Earn a Bachelor’s Degree
Most states do not mandate that an insurance agent complete a bachelor’s degree, at this time; however, most reputable employers prefer potential candidates that have a higher education degree. You might choose a degree in finance, degree in business, risk management, or economics to prepare yourself in the best way possible and to seem most appealing to potential employers. Keep in mind that specific courses will highly benefit you in your job, such as accounting, business law, communications, financial planning, investment management, psychology, public speaking, and sociology. You should select any elective that will help you learn more about the insurance industry and its policies.
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Step 2: Complete an Internship
Many states require that you have on-the-job training before you can obtain an insurance agents license of any kind. If you complete an internship while you work on your bachelor’s degree, you can more easily obtain a job upon graduation. It is possible that you might be offered a full-time position by the company with which you complete your internship. An internship also helps you determine whether or not you would like to pursue another type of insurance agent and the type of company for which you would like to work. These are all important aspects to consider in order to improve your overall job satisfaction and work-life balance. Keep in mind that, while you are evaluating and observing your internship, the company is evaluating you to report back to your higher learning institution on whether or not you will receive credit for your internship.
Step 3: Obtain a State Broker’s License
All states require you to possess at least one broker’s licensure to become a fully employed and licensed insurance agent. In some states, you will require several insurance agents licenses for each type of insurance with which you intend to work. If you manage other insurance agents, you might also require additional licensure to do so legally in some states. While you only require a high school diploma or GED to take the state insurance agents license, you may greatly increase your chances of successful licensure by completing the licensure prep work. It might also be a good idea to find a mentor who is already a licensed agent to help you through the process if you do not have any formal training or a degree.
Step 4: Secure a Job
You are unlikely to become a fully operational and independent insurance agent without a significant amount of experience. Most people will begin their careers in entry-level positions, such as a insurance agents assistant or in customer service. You must gain industry know-how and become familiar with the best practices of your employer before you can advance in your career. The time it takes to get to work without supervision will be entirely dependent upon your initiative and comprehension abilities and position availability at your employer or other potential employers.
Step 5: Continuing Education
To maintain your licensure and to ensure career development, each state requires continued education. Each state will recognize different types of continued education to qualify. While these courses, seminars, certificates, etc., are critical for your license, it is also a way to secure your professional development, career advancement, and pay increases. It is also a great way to specialize your expertise. You might consider a number of certificates that are recognized by the National Alliance for Insurance Education and Research, such as to complete the Certified Insurance Counselor, Certified Insurance Service Representative, or the Certified Risk Manager. You can complete any number of specialized certificates from accredited colleges and universities. You might even consider working toward your next degree to make your path toward managing a branch or owning your operation more easily attainable.
What Does an Insurance Agent Do?
An insurance agent is a liaison between insurance companies and the clients of the insurance agent. The goal of the insurance agent is to find the best insurance coverage at the best price for their clients. The daily responsibilities might vary somewhat from employer to employer. If you work for a small firm, you might have to cover more areas of insurance and responsibilities; whereas, individuals who work for larger firms may specialize in one or two areas.
Daily tasks will vary from day to day; however, the expected job responsibilities will be similar at each position. It is also important to note that you may be required to travel and work outside of the office at various times throughout the week. As an insurance agent, you will be responsible to schedule and attend meetings, build and maintain client relationships, research insurance, maintain computer records, negotiate policy terms and costs, prepare reports, advise clients on claims, generate marketing initiatives, and renew existing client policies.
Insurance Agent Skills to Acquire
An insurance agent requires a unique and highly specific skill set to be successful. The best insurance agents will excel with both soft and hard skills. You must be analytical and understand the complexities of the insurance industry and the finance industry. You must also be technical and be able to pay attention to detail, be highly organized, make decisions quickly and prioritize your clients, claims, and daily tasks.
You must also be able to work with people in both a gentle and firm manner. You must be able to stand up to tough negotiators and relate to and be compassionate with people who are emotional about their claims. You will work with all types of emotions in this job. You must be able to remain professional at all times and remember who you are working for before you act. This industry has many gray areas. You must be willing to do the right thing over the easy or tempting thing each and every time.
- Negotiation Skills
- Time Management
- Organizational Skills
- Interpersonal Skills
- Superior communication Skills
- Analytical Skills
- Empathy and Compassion
You do not have to complete a bachelor’s degree in an insurance-friendly field to become an insurance agent. While it is highly recommended as a way to speed up the process and to earn more money, you do not have to follow the path of least resistance. In fact, plenty of people take non-traditional routes to become an insurance agent. Some people might have a completely unrelated bachelor’s degree and work for an insurance company for several years in another capacity before they decide to become an insurance agent. Some people might even work in another industry entirely before they make the switch. These individuals must be trained like everyone else and start in a supervised position; however, it is one way to transition into becoming an insurance agent.
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It is also possible to start with a high school diploma or a GED, though you will still have to pass the licensure exam. You can take various licensure prep courses online, hire a tutor, or find a mentor to help you pass more easily. In some states, you must have some experience before you can take the licensure exam. If this is the case, you will have to work from the bottom up and it will likely take longer than if you had a degree. Keep in mind that you can always work to complete a degree while you gain experience. And if you do not have a degree, insurance agent companies often hire people with exceptional sales experience. So, you might consider a sales job after you graduate from high school if you do not pursue a degree.
Insurance Agent Career & Salary
Where Might You Work?
An insurance agent can work for a variety of potential employers. Most agents will work for either a small or a large insurance brokerage company. These companies are entirely dedicated to representing as many insurance companies as possible to ensure their clients receive the best policies, rates, benefits and more as possible. Insurance agents at small firms will often work have far more diverse roles and responsibilities; whereas, a larger firm will hire people to focus on specific and somewhat limited areas of the business. It is also possible to work for yourself from your home, which is growing in popularity with the help of technology.
Potential Career Paths
Many people start in an entirely different career before they become an insurance agents. You will find people who worked in a variety of fields find their way into insurance, such as teachers, sales reps, real estate agents and other non-insurance-related positions. Once you do find yourself as an insurance agent, you will have to make career advancement decisions. Most people do not remain an insurance agent in the long-term as it is a highly stressful and time-consuming position. If you wish to move up within the area of brokering, many people will become the manager of a insurance agent branch or start their own brokerage firm. It is also possible to become a department supervisor. Another possibility is to move into other areas of insurance or finance.
An insurance agent is similar to an insurance agent expect for agents only represent one insurance company. They are often employed by the insurance company to sell their insurance plans to potential clients. Agents are also required to be licensed.
An insurance underwriter is hired to evaluate the risk of a client. They also work to determine the exact coverage a client should secure, the price of the coverage and if the risk is acceptable to cover. These individuals look at facts, data and statistics rather than human emotion.
A claims investigator is hired to protect insurance companies from fraudulent claims. Policyholders file claims for a variety of reasons, such as medical expenses, liability, injury, worker’s compensation, property damage and more. The claims investigator determines whether or not the claim is legitimate.
An insurance appraiser assesses the value and the cost of any item that is insured. They will also be responsible for examining property and vehicles after an accident. They will then determine the estimated repair costs and present the findings.
An actuary determines the financial repercussions of risk based on intense analysis. These professionals will use financial theory, mathematics and statistics to examine potential future threats to pension and insurance programs. This is a highly in-demand field that requires a highly technical skill set.
A risk manager will be responsible for the identification and the assessment of threats. They will also develop plans to implement if a threat does occur, and they will create strategies of ways to minimize, transfer and avoid risk. They will be responsible to protect all parties from risk, including the company, employees, reputation, assets, customers and stakeholders.
Real Estate Agent
A real estate agent works with clients to guide them through the entire transaction of the real estate process. They might represent a seller or a buyer. Some responsibilities include listing the property, advertising, arranging and overseeing open houses and financial preparation.
Insurance Careers Salaries
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The career outlook for insurance agents and agents tend to be categorized together in most studies and statistics due to the similar nature of their jobs. It is expected that these careers will continue to grow by roughly 10% by 2026. Insurance agents will become more and more important to both insurance companies and the companies they wish to insure as the insurance industry continues to increase in competition. Pay will increase based on experience and education. As greater importance is placed on insurance agents, wages will become higher, and the more people will enter the job market.
Advancing From Here
The insurance agent career path can be frustrating and time consuming. There is a high learning curve for low pay that everyone must overcome before they can work on their own as an insurance agent. The hours tend to be long if insurance agents are to generate a large client base and increase their pay. Once insurance agents are ready for career advancement, they will usually break out on their own or shift to another insurance area, such as actuary, adjusting, or underwriting. It is also possible to become a supervisor or manager. Executive jobs are possible; however, they are highly competitive, and it is often easier and faster to start your own firm to reach this level of pay and responsibility.
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Frequently Asked Questions
How many hours per week does an insurance agent work?
Some insurance agents work full time and some work more than 40 hours a week. Hours can vary based on clients schedules including nights and weekends.
What is on the insurance examination?
The insurance exam will be different in each state. The test will likely have around 50 to 200 multiple-choice questions about insurance. The test will have a time limit of around 1.5 to 2.5 hours to complete depending on the test.
What do property and casualty insurance agents do?
Property and casualty insurance agents sell insurance policies that help protect businesses and people from financial loss that was the result of fires, theft, automobile accidents, and other events that damage property.
What does a life and health insurance agent do?
A life and health insurance agent sells and prepares insurance policies that protect clients from financial loss due to medical issues and loss of life. A life and health insurance agent may work with insurance companies to present their products to the client.
Do insurance agents need a degree?
A degree is not required to sell insurance. Some employers may require a degree but it will depend on the individual and the specific position.