17 Pros and Cons of Selling Insurance

Selling insurance is a career opportunity which is enjoyable, flexible, and lucrative. When you enjoy interacting with other people every day to provide them with a policy that can protect their investments and lifestyle, then you are doing something meaningful in your profession while earning a robust income at the same time. The secret to success in this industry is to work hard, stay true to your values, and embrace the drive you have to reach your goals every day.

This profession is one that many people consider when they first begin to evaluate their career options. There are usually multiple positions available, you have an opportunity to start a business if you wish, and it may not require any experience to start the training process. You can then earn a reliable income each year without dealing with the stresses that other career opportunities provide.

There will be times if you start selling insurance that your paychecks may not be as high as you want them to be. You might discover unexpected adjustments to your pay because of customer actions that can affect your finances too. Most people who work in this industry discover that the advantages typically outweigh the disadvantages when they become active.

List of the Pros of Selling Insurance

1. You can choose to represent one carrier or multiple brands through your agency.
If you decide to become an independent insurance agent to start selling policies to your community, then this business opportunity allows you to create multiple layers of representation. You could affiliate with a specific insurance brand, such as Allstate or Farmer’s. There are also times when you can feature your independence by offering multiple policy types from several different carriers.

Insurance agents in this situation typically earn an income through commissions. You may find that the need to balance politics is much higher when you are independent, but there is also more freedom to be found in your decisions.

2. Residual income from selling insurance can be very lucrative.
When you sell an insurance policy to someone, then they will receive the coverage that they want for a specific time – usually 6 months or 1 year. Once that policy expires, your customer will have an opportunity to renew their coverage for the same amount of time. Most policies can automatically renew when the individual makes their next monthly payment. Every time a renewal comes through for you, then another commission comes in for your income.

Since the big-ticket items for insurance are homes and vehicles, the only way that you lose this passive income from renewals is if your customers can find a better rate with a different agent. A little work on your end to continue securing competitive rates is often all that it takes to build a successful book.

3. Selling insurance allows you to control your calendar.
When you create an insurance agency, then you dictate what the schedule will be for your office hours. If you need to run to the doctor, take a sick day, or manage a few errands, then you get to make the call. This advantage may not apply to new agents who work for an agency in the traditional sense, but independent contractors and self-employed agents can balance their work and life schedules more effectively with this career option.

There are moments when you cannot be flexible, like when a client is filing a claim or needs to meet with you about their policy. You still need to put in the hours each week to earn an income, but there is more flexibility available in that process.

4. You can almost always find a job selling insurance.
It may not be a glamorous job at times, but someone needs to do it. The first couple of years can be a challenge as you establish your book, but as the policies start to sell, you can develop a nice income that is fairly secure. Then you can keep building those new policies and renewals upward to increase your compensation. You can choose to manage claims or sell policies over the phone if you prefer.

It can be a lot of work to obtain your insurance license to start selling policies in the first place. Many of the people who break into this industry discover that the initial hard work for lower wages isn’t an investment they want to make. If you are willing to pay your dues when you first get started selling insurance, then this job almost guarantees long-term employment.

5. Paid training is often available as part of your employment.
Insurance professionals hold several different licenses, certificates, and/or degrees to verify their knowledge and experience for this industry. If you can catch on with a formal employer, then there is an excellent chance that they will pay for these expenses if you can pass the state exams. In North America, the full package of licenses that you may need to start selling insurance can run between $600 to $1,000. Renewal fees apply as well, which may or may not be covered by the employer.

6. You can choose from several career opportunities when selling insurance.
When you decide to start selling insurance, then there are a variety of different policies from which to choose that you can represent to your community. Corporate positions allow you to train new workers while servicing your best customers to ensure the best possible experience. Independent agents can decide to become an independent affiliate of a national or foreign provider. You can decide to run an agency to see whatever insurance products you prefer. There are even different policies and items available for sale too, such as general liability, homeowners’ insurance, or surety bonds.

7. You are not forced to stay at the office when you start selling insurance.
Each community offers a marketplace that stays fairly consistent. When you can develop the skills that are necessary to begin selling insurance, then you can work almost anywhere. You can start a new business in almost any community, work remotely, and visit your customers instead of having them come to you if that is your preference. Although selling the same items every day can bring its own challenges, you do have the option to change your environment as needed while offering people access to the protective products they require.

8. There are numerous leads available to you when you start selling insurance.
Customers always look for insurance online or in their community based on their particular needs. There are several sites, including employer-owned pages from your affiliate or national brand, which help to funnel warn leads to your office. That means you can spend more time closing a sale rather than searching for them. Because insurance is a need for almost everyone, there is an excellent chance that a brand-new client will stride right through your doors and ask about a policy.

You will also have visitors to your site every day. Most customers have already done their homework about the policies you offer, which means your goal is to give them the best deal possible.

9. Selling insurance provides you with employment security.
Families require insurance to protect their assets. They’re going to want their policies to remain active over a lengthy period because that is what guards their overall net worth. That means you have plenty of options to consider when you start selling insurance in your community. Health insurance works to offset planned and unexpected medical expenses. Homeowners’ or renter’s insurance protects their property and structures. Automotive insurance does the same thing for their vehicles.

Unless our planet experiences a complete shift in asset management over the next couple of decades as you start your career, you will find that the job security in this industry can be quite comforting.

10. Your commissions are extremely competitive compared to other industries.
If you are willing to put in the hours during your first years as an insurance agent, then it is possible to earn six figures right out of the gate. Selling insurance requires high levels of personal motivation, discipline, and some luck to reach that level, but it is possible. Some agents work on a salary that receives a supplement through commissions, but many earn a percentage of what they sell only. You also have access to incentives and bonuses which can stretch an annual income even further.

List of the Cons of Selling Insurance

1. Your income levels when selling insurance are unpredictable at times.
The compensation package you receive when selling insurance is usually 100% commission-only. That means you receive compensation when you can close the deal on a sale. If you consistently sell policies and earn renewals, then you can begin to take away the sting of this disadvantage somewhat, but it will always be a potential threat. With the use of online insurance tools, your community may not feel like there is a need to work with you since they can get what they need at home. It is not unusual to go a month or two when you first start working without receiving a check at all in some segments of this industry.

2. The benefits package you receive may be lacking – or non-existent.
Selling insurance is often treated as an independent contracting position, which means your employer may not offer benefits like vacation time or health insurance. Although you have more freedom as a contractor to work with your prospects and clients, it will also become your responsibility to pay for any needs you might have. If you want to take a sick day, then you’ll need to make up the income somewhere else to keep your paycheck stable since there will not be any compensation.

3. There is a lot of bureaucracy to navigate when selling insurance.
If you decide to open an insurance agency that you control, then your options are to work independently or become an affiliate. Should you choose the latter, then your business will become akin to a franchise. The home company will tell you how to market your agency. Regional managers might instruct you to pursue some clients while leaving others alone. There are specific rules in place on how you can market your name, use the brand, and when you can advertise. You receive the benefit of instant recognition, but the price can sometimes be too high.

4. It is up to you to start prospecting for future customers.
One of the most significant benefits of selling insurance is the chance to build a portfolio of renewals. This outcome can create enough of a residual income that there is predictability in your monthly checks. If you are not willing to start the prospecting process (which includes cold calling), then it becomes impossible to maximize your success. Many people enter this industry thinking that they can call people and close deals. The reality of this job is that you will call a lot of people, and they will decide to hang up on you more often than not.

5. The commissions you earn are upfront compensation.
When you sell an insurance policy to a customer, then you’ll receive between 50% to 80% of your commission on an upfront basis. That means you’re earning an advance from your employer or affiliate based on an expected customer payment. Once the money starts coming in to pay for the policy, the remainder of what you’re owed hits your paycheck.

If the customer decides not to pay their monthly premium for any reason, then the policy is cancelled, and your employer will recall the commission already paid. When a significant sum is involved, it could be a couple of paychecks before you make it back to even.

6. There are times when selling insurance does not feel fulfilling.
When you start to sell insurance, it can feel like this work takes up your entire world. There are long hours to work, new policy terms to learn frequently, and a lot of downtime waiting for someone to respond. Most people have the goal of starting their own company one day, so achieving it can feel like there is nothing more left to accomplish. At some point, the sole motivation for working becomes the need to earn an income while trying to figure out what a potential client needs to protect their assets. Some agents find that work rewarding, but it can also feel like there is a lack of meaning to what you are doing.

7. Expect your customers to start shopping around.
Your customers are going to be loyal to your agency or you as their representative for as long as you can provide them with the best deal. If another firm can offer a similar policy with better terms, then they are going to jump ship to save some cash. Even when you offer a great quote, it can be days or weeks before you receive a response because that prospect is getting “bids” from other insurers too. There are times when you cannot negotiate, so it can seem like your policies are priced too high. As with any other profession today, these circumstances can lead to poor reviews (even when someone doesn’t become a customer) that impact future opportunities.

The pros and cons of selling insurance are essential to review because this career can be lucrative, but it is also very challenging. If you love to interact with other people, solve puzzles, and help others, then you might find an opportunity in this industry to be too good to ignore.