When the economy begins to slow down, the vast majority of investors will start looking into recession-proof industries. This doesn’t mean that business won’t slow down but that it won’t completely go away. One of the more popular recession-proof industries includes the insurance sector. However, selling insurance isn’t just for those who have a lot of money or those with a lifetime of experience. Anyone can begin to sell insurance if they understand what it takes and how to go about achieving it. Understandably it can be a rather difficult business to go into. Therefore the following includes a detailed guide about how people can start to sell insurance.
Is it Really that Great?
Being an insurance salesperson is difficult, but if you speak to any experienced insurance salesperson, they will tell you that the rewards are worth the work. Although the monetary gain is certainly one of the leading forces that attract people into the industry, it is also the freedom that comes with it. When people work within a traditional corporate job, they are being told what and when to do things by their boss. In fact, most people’s career will be determined by how much their employer thinks they’re worth. In the insurance industry, people don’t wait until someone thinks they’re worth something for them to continue to move up. If a person’s work produces results, their career continues despite anyone’s opinion.
Legal Hurdles
You may not think of insurance salespeople as a business, but the fact is that most states do consider them a business. Therefore much like any other type of new company, an insurance salesperson will need to apply and obtain a license. The training leading up to the exam will consist of general insurance education courses and about 12 hours of ethics courses. You can take these courses online at your convenience, and you will be asked to pay around $500 for them. It should be noted that most states do require people to obtain a license for each type of insurance they are planning to sell. This means you’re going to need an additional license if you’re planning to sell term life insurance, property insurance, product liability insurance, or healthcare insurance. If by any chance, a person taking the exam fails, they are allowed to retake the courses and the exam an additional time for a small fee.
Starting an Insurance Business
If a person is looking to start their own insurance business, they need to first be aware of a few things. One of the most important includes the start-up cost of opening an insurance company. The range of a person’s start-up cost will be between $5,000 and $50,000. If a home is the location for the company, then that would drastically lower the number. However, they would still need to invest in marketing products.
Purchasing a Book of Business
When a new agent is newly certified, they are usually very eager to start finding clients. One of the best ways to begin the process is to purchase a book of business from another insurance agent. No, this isn’t a book about business but rather a book of businesses. This book contains information about businesses and their policies. When an insurance agent purchases this book, they are then in charge of all the clients within it. Agents tend to sell their books due to needing to retire or simply cut down on their workload. However, purchasing this book does not guarantee that you will obtain a commission from it. The book only allows you to have companies then persuade to re-sign after their initial policy ends, at which point the new agent will begin to receive commissions.
You Also Need Insurance
Because being an independent insurance agent is still considered a business, a salesperson will need insurance for themselves. Two of the most common insurance policies include E&O insurance and a traditional business owner plan. The BOP allows people to add on additional protections such as the car an agent is using to drive around town and the equipment they need. The E&O insurance plan stands for errors and omissions, which is similar to the type of insurance doctors obtain for protection against claims of malpractice. Some of the most common lawsuits/complaints against agents include not notifying clients that their policy is up for renewal.
Check out my guide on how to start your business right with tons of useful tips I learned by successfully starting, building, and selling multiple companies.
