Becoming an insurance agent is a highly rewarding job with even higher growth potential. It’s also one of the greatest ways to make a career change, especially if you feel stuck in your current job. Unfortunately, most people don’t know what it takes to become an insurance broker.
Today, there are 412,850 insurance agencies and brokers in the U.S. Joining the field could give you the turnaround you need in your life to grow. Insurance brokerage will give you the flexibility you need to grow in your career.
However, the requirements for becoming an insurance broker often differ from one state to another. But completing the licensing application process is faster and easier than in other careers.
So what do you need to become an insurance broker? Read on below to find out.
- Decide the Type of Insurance Broker You’d Like to Be
The first step to knowing how to become an insurance agent is finding out the type of agent you’d like to be. So you need to know the two different types of insurance brokers in the market today.
Captive Insurance Broker
A captive broker is an agent who only works with a specific company. Such agents often prefer working with large insurance agencies with a wide array of insurance products. The company will be responsible for training the agent and offering them support whenever they need it.
In exchange for this support, the insurance agent can’t sell policies and coverage from other companies. They’re obligated to provide their clients with insurance products from that particular company. This means that you’ll be like an extension of the insurance company’s employees.
Most captive brokers sign non-compete agreements to limit them from selling insurance policies from other companies for a specified period of time. The company pays the agent on a commission based on the agreed terms.
An Independent Insurance Broker
An independent broker works with numerous insurance companies simultaneously. The agent will compare different policies and look for the best insurance coverage based on their client’s needs. Independent insurance agents are more flexible in the products they offer.
However, they don’t have support from the insurance companies they partner with. They also don’t receive any specialized training. So they must build a brand and prove themselves in the insurance marketplace.
Because they don’t have access to training or support from a particular insurance company, independent insurance brokers often have a challenging learning curve. This makes it even more difficult to join the industry as an independent insurance agent.
- Choose the Type of Insurance Products You’d Like to Sell
There are many different types of insurance products in the market today. So make sure you check all of them to find out which best suits you. Deciding the type of products you’d like to sell is also a major step to becoming an insurance agent.
Below is a list of some of the most popular insurance products in the market today:
- Surplus line
- Motor vehicle
- Personal lines
Insurance products are divided into two categories: personal and commercial coverage. Personal policies often deal with the coverage of individual citizens and their families. Examples of personal insurance include car, life, and homeowner’s insurance coverage.
On the other hand, commercial policies often deal with companies, organizations, and even small businesses. Such covers may range from commercial property coverage, liability insurance, and errors and omission policies.
Deciding on the type of coverage you want to deal with is essential. Do your own research about the different types of policies and choose your niche.
- Check the Licensing Requirements to Sell Insurance in Your State
After deciding the types of product you’ll be selling, you’ll need a license to sell insurance in your state. Unfortunately, different states have different licensing requirements. Check your state’s insurance agent license requirements and follow the instructions for the application process to the latter.
Generally, there are two common types of insurance licenses. They may vary depending on the state you live in. These include health, accident, and life insurance licenses, as well as casualty and property insurance licenses.
Health, accident, and life insurance license is for the agents who want to serve consumers in need of individual policies such as health insurance, life, and accident coverage. On the other hand, casualty and property insurance licenses are for agents dealing with business and car insurance policies.
Depending on your state and the selection of products you want to sell, you may need to get multiple licenses.
- Take a Licensing Exam
Before becoming an insurance agent, you’ll be required to take pre-licensing courses. Most of these classes are available online. However, you can also take an in-person course from numerous accepted providers.
The duration of the course depends on your state. Some states may require you to take a 24-hour in-person course, while others require 20 to 40-hour online classes. After completing your classes, you’ll need to schedule your state’s license exam.
Most states hire a third-party organization to set these exams. You’ll also be required to visit the testing site in person on the specified date to take your exam. You could also complete the exam online.
When going for the exam, make sure that you carry proof of completed training. You may need it before sitting for the examination.
- Find Clients and Maintain Them
Now that you’ve already completed all the licensing requirements, it’s time to find your new clients. You can start by selling your policies to the people around you. This is a great way to educate yourself about the system and how it works.
You can also look for ways to start marketing your agency. One of the best ways to market your agent is through cold calling.
Create an effective cold calling script to attract new clients and close sales. If you don’t know how to create a script, check out this guide.
Now You Know How to Become an Insurance Broker
Are you considering becoming an insurance agent? There are a few things you should consider if you want to become an insurance broker. Some of these include your state’s licensing requirements, the type of insurance agent you want to be, and your field of specialization.
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