The Complete Guide to Selling Insurance

Do you love being told “no”? Do you love reminding people bad things happen? Do you love approaching strangers and asking personal questions?

These are actual things you have to be okay with as an insurance agent, and while it’s funny to frame them that way, it’s actually impressive!

So . . . do you love a challenge? Do you love helping people prepare for the worst and have peace of mind? Have you never met a stranger?

If so, you’re one of the select few entrepreneurial souls who help the world protect their future by selling insurance—or you could be if you’re not yet.

 

What Is Insurance Sales?

People need insurance, and they’re able to get it because somebody sold it to them. That’s you! Like it sounds, insurance sales is the industry built around selling insurance policies and products to individuals and businesses. Home, life, health, long-term care and auto policies are some of the main policies insurance agents make a living off of, but there are many more.

How Much Can You Make Selling Insurance?

When it comes to how much an insurance salesperson can make, you might hear phrases like, “The sky’s the limit!” And while that’s inspiring and all, it’s important to realize six-figure incomes don’t happen overnight.

In 2022, the median income for people selling insurance was $57,860 per year or $27.82 per hour. Compared to the median salary of all workers, $46,310, you’re still doing well!¹

While a few captive agents earn base salaries, most agents work off commission. Like we said above, it takes time to work up to the bigger income numbers. Because agents make a percentage off renewals of policies they sell as well as annual premiums (like with life insurance), the longer they’ve been selling, the more those annual cuts add up.

 

What’s the Difference: Captive vs. Independent Agent

No, a captive agent isn’t chained in a warehouse forced at gunpoint to sell insurance—although an independent agent does look a lot like a spy with no country. But seriously, there are big differences between these kinds of agents. Take a look:

Captive Agent

These agents work for a particular insurance company selling insurance products for them and only them.

Perks:

• Your office expenses will likely be paid for.
• You’ll receive benefits and continuing education.
• Usually, you’ll be given leads rather than having to find them yourself (although you’ll probably have to pay for them).

Disadvantages:

• You’re stuck selling what the company peddles—which may not be something you believe in.
• Your hours will be inflexible.
• Captive agents tend to make less on commission.

Independent Agent

As an independent agent, you sell whatever kinds of insurance you want from whatever insurance companies you choose. You shop quotes from various insurance companies to find the best deal for your customers.

Perks:

• You’re in control.
• You set your schedule.
• You get to shape a mission for yourself by choosing what insurance products to sell based on what you believe will help people the best.
• You can offer more customization to your customers because you’re not locked into one carrier.
• You make a higher commission on each sale.

Disadvantages:

• You pay for everything to run your business—because it’s your business.
• You have to find leads. No one is going to help you unless you pay them.
• You do your own marketing and networking.

 

Pros and Cons of Selling Insurance

Just like every job, there are the awesome parts that everyone would love to have—and the sacrifices you have to make in order to have those awesome parts. Let’s look at the pros and cons of selling insurance.

Pros

The awesome parts of selling insurance are pretty sweet—that’s why so many people are attracted to the industry.

You probably thought running a business sounded fun—until you realized it would actually run you. Discover the EntreLeadership System—the small-business road map that takes the guesswork out of growth.

Flexible Schedule

If you’re an independent agent, you get to set your own schedule—because you work for yourself. If you want to be free to make it to little Etta’s afternoon ballet recital, just don’t schedule any meetings with clients from 4–5:30 p.m. on Tuesday.

Or if you want to have Mondays off, you can simply choose to keep that time open as well. As long as you can run your business effectively, you’re free to customize your schedule to suit your lifestyle.

If you’re a captive agent, your schedule will probably be a lot less flexible.

Potential for High Earnings

Here’s where that “sky’s the limit” saying pops up. The hardest working agents can make a lot of money. As long as you have active policies, you’ll keep earning commission on them—and that’s where the real earning potential is.

Usually for auto or home policies, an independent agent receives somewhere around 15% of a premium paid by a policyholder in the first year, then 2–15% per year after that if the policy remains active or is renewed.² Life insurance agents make more (as we’ll see later). But as you sell more policies, you build up a passive income stream from those annual commissions.

Low Barrier to Entry

You don’t need a college degree (or in some cases even a high school diploma) to become an insurance agent. You don’t even need prior experience because you’ll learn on the job and through training. All you need is a license and an indominable spirit (that’s fancy lingo that means if you get knocked own, you’ll get right back up twice as strong). You’ll need to love the word “no” because you’ll hear it a lot.

Helping People

People need to feel like they’re doing good with their work. At first glance, insurance might not be top of your list for jobs that help people, but insurance is extremely important. Without it, people’s lives could fall into chaos after just one car crash or one storm. It’s part of every solid financial plan. And you can help make sure your clients get the right coverage for their situation.

Job Security

Whether you’re looking to work for a company or for yourself, there’s no lack of jobs selling insurance. According to the Bureau of Labor Statistics, insurance sales jobs are expected to grow 8% between 2022 and 2032.³

Cons

A job with that many attractive pros doesn’t come without a few cons. But keep in mind, some of these cons are two-sided—they’re also a pro, it just depends how you look at them.

Unpredictable Income

Because insurance agents work off commission, their income is unpredictable. While a very few do make base salaries, the vast majority don’t. And if you work independently, you won’t get benefits either.

But that commission-based pay is what allows your income to grow without limit, so keep that in mind.

High-Effort Customers

Selling boats or hot cross buns is easy because the customer can run their hand along the sleek side of the watercraft or breathe in the hot yeasty bun smell. And they know as soon as they plunk their money down, they get to haul their boat to the water or stuff their face with delicious carbs (hopefully they put butter on them first).

But it’s not as easy to sell insurance because customers don’t get instant gratification. Once they sign the papers, nothing changes externally.

You’re selling ideas, trust, promises—peace of mind. Stuff they can’t hold. And that’s typically a tough sell.

Personality Type

Personality doesn’t determine whether you’re good at this job, but it does play a part in how difficult it’ll be.

Your biggest personal asset when it comes to selling insurance is how well you talk to people. You’ll be talking to a lot of them. So if you’re a people person, this job could be just the thing for you.

Part of your job will be making cold calls to find prospective customers. To be effective at this at all, you’ll need to hone your skills on the phone.

“No” needs to be your new favorite word.

If talking to people doesn’t come easily for you, you can learn, but this job will be harder for you.

No Paid Time Off (PTO) or Sick Leave

As an independent agent, you’ll be running your own business. This means any time you take off for vacation or illness is on you. If you’re a captive agent, there’s a chance you may get PTO and sick leave.

 

Decide Which Products You Want to Sell

There’s a lot of choice in this area. Like candy, there are many types of insurance and then many flavors within those types. Are you going to sell chocolate bars or gummies? Or rather, are you going to sell personal insurance or commercial insurance?  

If personal, will you sell life insurance, home insurance, auto insurance or another type? Or maybe you want to sell many kinds of personal insurance. That’s totally possible too—you’ll just need multiple licenses.

What Is the Most Profitable Type of Insurance to Sell?

Life insurance is the most profitable—and the hardest—type of insurance to sell. With the highest premiums and the longest-running contract, it brings in cash over a long period of time. In the first year, agents make the largest annual sum on a policy, bringing in anywhere from 40–120% of the policy premium. As long as the policy remains active, agents keep getting around 2% on annual premiums.⁴

 

Get Your Insurance License

Are you pumped to sell insurance now? Well, you’ll need a license! Thankfully, like we mentioned above, getting qualified to sell insurance is pretty easy.

All in, it takes about three to six weeks to get your license. Each state’s requirements are a little different. In some states, you need to take a pre-exam education course, while in others you can go straight to the exam. If you want to sell insurance in multiple states, you’ll need to get a license in each state.

Here’s a list of everything you need to sell insurance:

• Be 18 years old or older.
• Finish prelicensing education.
• Pass the state insurance licensing exam.
• Pass a background check.

Find an Independent Marketing Organization

If you’re working as an independent insurance agent, you’ll want to partner with an independent marketing organization or IMO. Why? Well, there are a few reasons.

But first, let’s look at what an IMO is.

IMOs work in partnership with both carriers and independent agents to link the two. In the olden days, most agents were captive, but the industry changed. As more customers favored working with an unbiased insurance broker or agent and insurance carriers tried to reduce overhead, IMOs formed.

On top of being the connector between agents and carriers, a good IMO will also provide support to agents, helping them with marketing, training and contracting. IMOs are paid directly by the insurance carrier, so you still get the full commission on every policy you sell.

All of these are good reasons to work with an IMO, but beyond that, sometimes it’s the only way you can work with a carrier. Some carriers will only work with an agent through an IMO.

How do you know an IMO is a good one? Here are a few things to look for:

Longevity: How long have they been around? A crappy one will probably fail pretty fast. Also, if the IMO you’re looking at is brand spanking new, there’s no way to tell if they’re any good because they have no track record. So look for one that’s established and has lots of experience.

Carrier options: As an independent agent, you’ll want access to as many options as possible so you have more options to offer your prospective clients.

Programs: Do they offer marketing programs and are they any good? You should choose an IMO that can help you market effectively.

Reputation: This one kind of goes back to the first sign of a good IMO. An IMO that’s been around for a while should have a reputation—and a good one at that! Either way, you should pick one with a good track record.

 

Find Insurance Leads

How you find leads (prospective clients!) will depend on what type of agent you are. Since captive agents are fed insurance leads by their company, we’ll spend our time looking at what you can do to generate leads if you’re an independent agent.

Tell everyone. Probably the least attractive way, this old-fashioned method of drumming up business is still tried and true. Tell everyone you’re an insurance agent.

If you needed to buy something important, who would you be more likely to use—the guy on the sidebar ad on the website you bought Snuggies from or the guy your friend at church used and recommends? We’re betting it’s the last one. Other people are your best bet for leads. So talk to everyone—family, friends and neighbors. Even if they don’t need insurance, they might know someone who does.

Cold-call people. Okay, this actually might be the least attractive way to find clients, but it’s also a tool in your box for finding people who realize their need for insurance and are willing to buy.

Purchase lead lists. You can buy lists of leads from vendors online, but these are usually not exclusive lists, which means a lot of folks on those lists have already heard from a bunch of agents.

Create a good website. Not all lead generation is about finding the leads—you can also get them to come to you. That’s where a good website is really important. Remember, you’re a business owner now—you should have a website!

Use social media. Like we just said, part of being a business owner is promoting your business, and that includes on social media. One way is to create educational content on social media. The best insurance agents have the heart of a teacher.

Join an insurance association. Being part of an industry association can help create visibility for your business.

Request people directly: It isn’t fancy or high-tech but going door to door is still one way to find customers. If your knees give out, try setting up a booth at a fair or market.

Purchase exclusive leads. Join a program like RamseyTrusted that provides you exclusive leads. Exclusive leads are more expensive, but the prospective customers they offer are much higher quality. For example, the leads RamseyTrusted sends have high intent to buy and are sold out on Ramsey’s teaching to buy insurance.

Building an insurance business takes a lot of work. Going out and gathering leads is a multipronged effort that pays off over the long haul—so don’t expect your business to explode overnight. You’ll probably have to use many (if not all) of these tactics for a long time. But don’t get discouraged! Arnold didn’t get ripped lifting one afternoon in his garage. Everything worth doing is hard.

Tips for Selling Insurance

Okay, so you’re still keen to sell insurance, and you want to be the best at it. So what can you do to set yourself apart from the rest? Here are a few tips on how to sell insurance like a pro:

Serve People Well

People can smell a self-server from a mile away. If you bring a servant’s heart to all your interactions, you’ll build trust and people will see you care about them. And selling insurance is all about trust.

Become an Expert on Insurance

Remember trust? Well, people tend to trust experts. Also, if you know your stuff backward and forward, you’ll be able to serve your customers better by helping them pick the exact product that fits them best.

Focus on Solving Problems for Your Customers, Not Explaining Features

Now, it might be tempting to word-vomit all that expertise you just gained to make people trust you, but people generally aren’t looking for an insurance deep dive. They just want to know they’re getting the best policy for them. People don’t care how much you know until they know how much you care. So, major on what they need and how you can meet that need and minor on the insurance jargon.

That said, having the heart of a teacher is really important. Always take the time to explain (in simple terms) why the policies you’ve found are the best fit for them.

And there is a place you can show off your knowledge—we mentioned it earlier: social media! Making educational content is a great way to establish your authority, build trust and gather leads.

Build a Network

We’re not suggesting you fill your calendar with networking events in sterile conference rooms where business cards and fake connections are the main course and people can only keep eye contact with you for two seconds because they keep scanning the room for someone more valuable to talk to.

Those are awful, and they rarely work anyway. But real relationships with the people around you are truly valuable.

What’s the difference?

A networking event is transactional—all about what the other guy can do for you. But true trust-building is relational. It takes time and involves a lot of give and take. You’re investing in others as people and forming a connection.

When your network starts looking like friendships, that’s when stuff starts happening! Get to know other agents and send them leads that you can’t help. Get to know people in other parts of the financial industry—you may have a client who needs help in other areas, and those people might be able to return the favor!

Get Involved in Your Community

Don’t know how to meet people? Find community events to engage with—like a farmer’s market, fitness class or park improvement project. If there’s nothing happening that suits you, start your own! Maybe you’re an avid runner: Start a running group in your neighborhood. Maybe you’re a dancing queen: Start a salsa class in your area. The possibilities are endless!

Not only will you meet new people and form new connections that could turn into leads, but you’ll also provide value to your community.

Be Professional

As an independent insurance agent, you probably won’t be in an office building with a strict dress code. It could be easy to let your vibe slip into casual, weekend mode. Don’t do that! Meet prospective clients in business settings and dress professionally.

Believe in Your Work

What good is an agent if they don’t have a mission? Yes, yes, you’re an insurance agent, not a secret agent—but it still applies!

Successful businesspeople have this in common: They view their work as a mission, and they believe in that mission. Remember, insurance is an essential part of a good financial plan, and people need it. They also need an expert with the heart of a teacher who wants to make sure they get the right policy—not just whatever policy makes the agent the most money.

Be an agent on a mission.

 

Set Yourself Up for Success

We’re not going to lie—selling insurance is hard. And if you’ve been in the industry any length of time, you know it. If you’re one of those agents who’s been out there doing the hard work but needs a new way to get quality leads, we can help.

We have, you know, a few fans (that was a joke—we have a lot!), and these folks know they need insurance. They also need an agent they can trust to find them the perfect policy. That could be you! Through the RamseyTrusted program, we’ll match you with exclusive property and casualty insurance leads online. We’ll even coach you through the process so you can serve your leads in the best way possible.

Ready to level up your insurance business? Apply here.