Life insurance agents are trained to navigate all the nuances of life insurance products. They understand how to evaluate clients and recommend appropriate coverage. See our home page.
They also know the varying factors that affect policy rates. Depending on the type of agent, they may be captive (limited to one insurer) or independent.
What is a Life Insurance Agency?
A Life Insurance Agency is a company that sells life insurance policies. They work with clients to understand their needs and offer advice on the best type of coverage for them. They also help with the complicated process of filling out insurance forms and explain difficult financial and insurance terms.
They can either work independently and be able to sell products from a range of companies or they can be captive agents and only be able to sell their own company’s products. Independent agents usually have better knowledge of the entire market and can shop around to get the best deal for their clients.
Whether you’re buying a policy from a captive agent or an independent agent, it’s important to choose a qualified professional who can guide you through the whole process. Make sure they’re a good communicator who can answer all your questions and is transparent with you. They should be accountable to you and put your financial interests before their own.
How do Life Insurance Agents Make Money?
Life insurance agents make money through sales commissions. They can also earn income from service fees, financing arrangements, and bonuses. Agents can either sell policies from a single company, known as captive agents, or independently.
A good life insurance agent will never put their commission before your best interests. If they do, they could lose their license and face legal action.
They interview clients to understand their needs and recommend the appropriate policy. They also handle the paperwork involved in policy renewals and submitting changes to beneficiary information or loan applications.
Agents can also help with the comparison shopping process by offering multiple policy options from different companies. However, independent agents are typically not incentivized to sell policies from their parent company like captive agents are. If you want to avoid biased advice, consider working with an independent broker like Policygenius. Their team of experts can walk you through the process while offering transparent, unbiased advice.
How do Life Insurance Agents Sell Policies?
Life insurance agents are typically paid a commission on the policy premiums that they sell. They can either work directly for a life insurance company, known as captive agents, or they can be independent agents that sell policies from multiple companies.
It’s important to know if your agent is a captive or independent agent so you can make sure they’re unbiased when providing advice. Otherwise, they may have an incentive to sell you a bigger policy that will pay them more in commissions.
When evaluating agents, be sure to ask how much they earn in upfront and annual commissions. You should also ask if they have any professional designations, like the Chartered Life Underwriter (CLU). This will help you determine their level of expertise and commitment to the industry. It’s also a good idea to check the agent’s website for complaints. These can be a red flag and indicate that they’re not working in your best interest.
What are the License Requirements for Life Insurance Agents?
In addition to taking a pre-license course and passing the state exam, many states require life insurance agents to undergo a background check. These checks are often conducted by a third-party company and typically cost $35 to $75. The state’s Department of Insurance or agency will usually have step-by-step instructions and links to schedule an appointment online or over the phone.
Once a person has passed their exam, received their pre-license course certificate, undergone a background check, and been assigned a license number they are ready to start working as a life insurance agent. Some people may decide to work independently and sell policies from multiple companies, known as independent life insurance agents, or they can choose to work with one company as a captive life insurance agent.
Some life insurance agents have earned professional designations, such as Chartered Life Underwriters (CLU). This isn’t required, but it can demonstrate an additional level of expertise to potential clients. Click here for more interesting articles.