Selling Insurance – The Ultimate Guide for New Insurance Agents
Selling Insurance – Everything You Need For Success
The number one reason to switch gears and get into the insurance business is the Passive Income Stream that comes with our industry. However, that’s just the beginning! It is extremely important that you know exactly how to enter our industry and have immediate success, “without going through the pain and struggles that most of us had to go through”. Selling insurance isn’t that complicated or difficult. You’ll need to have all the right tools and work with a legitimate and honest insurance marketing organization. Oh yes, and you must have access to a top-notch training platform. Selling the right products in the senior market will give you access to those lifetime residuals too! In this article we’ll be going over exactly what you need to get started including the following.
Licensing – IMPORTANT
Multi-Level Marketing vs working with a Broker
Medicare Advantage Sales – Why and How
Final Expense Insurance – Why and How
The Learning Curve while Selling Insurance
Basic Mistakes New Agents Make
Insurance Sales Success – Step by Step
Simple mistakes “and companies” to Avoid
Commissions – BEWARE
Selling insurance – Independent vs Captive Agent
Insurance Agent Licensing
A lot of insurance agents are recruited into the industry by different organizations. They’ll often want you to get a health license to sell their health products, or a life license to sell life products. I learned the hard way that you are better off getting a license that allows you to sell both. When The Hartford recruited me, I was directed to get a life license. That was great for my first few years but eventually, I realized that a health license was necessary too. This turned into a nightmare. I was told to give up my life license and get a combo license to sell both, life and health insurance products. By doing this, I was without a license for months. Want another reason to get the combo license? The testing is actually easier! FYI, I suggest a Life/Health/Variable Annuity license.
What is Final Expense and/or Medicare Advantage Insurance?
Final expense insurance is an extremely popular type of insurance. It is designed to cover funeral/burial, cremation, and/or any other costs that are remaining when someone passes. Fixed income seniors are the target buyers. These folks have either procrastinated in taking care of their funeral expenses or have had the insurance before and lost it. Unfortunately, this market has a high turnover ratio due to the lack of education and/or income of the clients. I’ve met with people that have had the insurance, lost it, bought it again, and then lost it again. Over and over! This isn’t usually the case, but it is with around 25% of our usual target market. By the time our prospects have interest in this type of insurance, they usually have multiple health conditions. High blood pressure and diabetes are common.
Medicare advantage and Medicare supplements are products that everyone needs once they’ve turned 65 years old. These products either add to what Medicare gives or they replace Medicare through private companies. We’ve all seen the commercials that pop up between October and March each year. The Medicare advantage products usually have the ability to replace Medicare and even offer more that what you would get if on Medicare. These products are available for different folks with different situations. A lot of our clients are living below poverty and/or have crippling disabilities. When this is the case, they can apply for Medicare even if they are under 65 years old. A lot of these products tend to be easy to sell because you can usually sell them without the client having to pay any money out of pocket. These products are necessary and easy to sell.
Selling Insurance Through A MLM Company
Half of the insurance agents in our industry tend to be recruited. I was lucky. I was brought in with good people who had a great product and sales system. Unfortunately, most agents are not. The Multi-level marketing insurance agency platform is your typical pyramid set up. You have the guy on top, then others below him who have others below them. Everyone makes money when the people below them sell insurance or recruit insurance agents who sell insurance. There are many problems with this type of system. First, the downline managers tend to sell new agents on the good/pros, but are not at all transparent on the cons. This is not the only place where there is a lack of transparency. We work a lead driven industry. Without exclusive leads available in your areas, you’ll end up working someone else’s old leads.
It gets worse. I called an MLM company because they advertised how they had heavy lead availability. First I signed up with them. Then I spent time and money traveling to get their (Fake) training. Eventually, I realized this wasn’t what I signed up for. Things got worse. Over a 2-month period I had only received 1 lead that hadn’t been sold to another agent. Out of hundreds! What’s worse, these scumbags wouldn’t release my contracts. Beware, compared to some of the stories that have been shared with me throughout the years, I was let off easy. Most of these types of companies have tiers for the commission levels. They will start an agent at a Sub-100% Commission level contract using the carrot on a stick, claiming you can easily work up to 140%, or even higher. There’s more, but we’ll save that for another time.
Selling Insurance Through a Broker
Most brokers lack in one area or another. They usually have good and fair commission levels for their products but usually don’t have training or leads. FYI, when we started our national insurance agency, we decided to have it all. We are not the only brokerage that does this. The important thing to keep in mind when going through a broker is to ask about these things. Yes, it’s important to have it all. Including the products! There are brokers that seem to have everything, but when you speak with them, it’s as if none of them have ever sold insurance before. When we bring on new agents, we want them to have the easiest products to sell. The same ones that I use when I go out in the field. This is Key to success, especially for new agents. Selling insurance successfully works when you follow a proven system.
An insurance brokerage can be great for experienced agents. But they’re usually limited for newbies! A good broker will have an open release policy, unlike the MLM’s. They tend to offer the highest commissions available just like we do. This is why agents often jump into working with a brokerage. Yeah, this is great but when you need the right leads or training, you’re usually on your own. Not good! We do our own mail drops so our agents never have to buy someone else’s leads. Good agencies like ours also have an inhouse training platform that includes the ability to get you in the car with a master agent. Someone who not only sells but sells at a high level. My experience doing ride-a longs with agents was terrible. Doing a ride-along with someone who is selling insurance at a low level, doesn’t will not help you.
Selling Final Expense Insurance
We love selling final expense insurance for the big up-front advanced moneys. Warning, advanced money should be considered a loan until your client has been on the books to cover the nine months. Working the senior market means the people you are selling to are usually pretty easy to sell. Think about it. If you’re a new sales pro, would you want to try selling products to Doctors and Lawyers, people who think they know more than you? Or would you be better off selling something to older folks who are on a fixed income and actually need the insurance/help? When I went from selling driveways, to selling mortgage protection, I though it would be easy. It wasn’t. But when we got into final expense sales, I couldn’t believe how easy it is for anyone who had talent at sales.
The lead availability for final expense insurance is great too. Think about how many seniors are turning 50 years old, every single day. This is why agencies like ours are able to guarantee fresh/unsold leads to our agents. Exclusive leads are the only leads I’ll work. There is nothing worse than working leads that have already been sold to other insurance agents. There are also multiple types of leads for selling final expense insurance. We work with a company that can even teach you the basics of advertising on Facebook. There are agents who write hundreds of thousands of dollars in premium each year from their self-generated Facebook leads. Telemarketer leads work too, and they are cheap. However, since the pandemic the tele-market leads have exploded and worked to death. The quality is not what it used to be. Beware – most of the offshore marketers are selling Illegal/un-scrubbed leads.
Selling Insurance – Common Mistakes New Agents Make
First, always ask to see your commission up-front. Beware of anyone that tells you this isn’t important. Transparency is necessary for your success so expect it with anyone you decide to work with. Ask about release policies. Unfortunately, most insurance agencies will tell you that you are an independent agent however, that’s not the case. There is nothing wrong with asking the agency you’re about to work with for a copy of their release agreement. It should be general and should say that as long as the new agency will accept any debt that could roll up from any bad business. Any mention of lawyers is a no-no. You can always email me the release and I’ll tell you if it’s legit or not. The MLM’s tend to have super shady release agreements that no one in their right mind will sign.
IMPORTANT! If you’re going to sell Medicare advantage, make sure that you are vested on the first day. This isn’t the only thing to beware of. One of the largest insurance agencies in the country recruits unlicensed agents. They help the agents get the license and train them. Some of these agents don’t realize their renewals are being shared until they’ve been selling for years. When we don’t know better, we tend to make silly mistakes like signing agreements that specify how we are giving up our commissions. Your Medicare Advantage commissions should be similar to this. In 2021, new Medicare Advantage sales pay $539 for the first year and $270 per year, for the life of the client. In 2022 the pay structure will be even more and will keep increasing each year based on inflation.
Selling Insurance as a Captive Agent
There are pros and cons of selling insurance as a captive agent that you need to know about. Let’s start with some of the pros. One of the things that I loved about being recruited as a captive Hartford Life insurance agent was the training. When you are not an established sales professional, training can be the most important thing. If you’re looking at a captive shop, here are some tips. Are there ongoing daily/weekly training meetings? Is the product your selling competitive? Will you be able to do ride-a longs with top producing agents? Is there an established sales system that the other agents in the office are using? FYI, being a captive agent without an office to go to for your daily training, is like selling gym equipment to someone who isn’t allowed to work out. It just doesn’t make sense.
The cons! If you’re going to be selling insurance as a captive agent, keep this in mind. There is usually a two or three-year vesting period. This means if you leave the company before that, you don’t get your back-end moneys months 10, 11, and 12. The residuals will be gone too! Another negative is the commission levels are usually a lot lower than that of an independent agent and in many cases, there either isn’t any residual income or none at all. In my opinion, this is a fair exchange for hand holding throughout your learning curve. We all have to start somewhere, and we’ve all got to pay our dues if we want to be successful. Understand, if you’re getting high commissions as an independent agent but don’t have a successful system including exclusive lead availability, your commission level doesn’t matter.
If you expect to have a lot of success selling insurance, here are my suggestions. First, expect to put everything you have into your insurance business, including all of your time, and at least $4,000 to $5,000. Part timers rarely have any success and usually just get into debt. Insurance agents without money or the ability to come up with money never get anywhere and always fail. One after another! That’s the hard truth but I said it! Second, expect a learning curve. If you want to get through the learning curve quicker, withing a few short months, you’ll need to work a lot of exclusive leads, every single week. Commitment to weekly leads can make or break an agent. I suggest working no less than 30 Exclusive Direct Mail Leads. It doesn’t matter if you’re selling Medicare products or Life insurance products, you must have leads.
There are 2 reasons you should get anything less than 110% First Year commissions for the main life/final expense product. You’re either getting free leads or they are giving you a lot of hand holding and face to face training in exchange for those lower commissions! For Medicare products, there are 2 levels. The first level is full commission with full renewals. The second is a shared/lower comp with limited renewals. Make sure you know which one you are at why. Agencies that take part of your commissions have a tendency to lie or manipulate you into thinking that this is how it is everywhere. Four or five thousand dollars for leads is not for asking much. If you can’t come up with five thousand dollars for your business, you probably won’t be talented enough to be successful until you change.