Photo credit: ambimb
Here are the reasons why I believe selling insurance is a profitable business
Perpetual Income
Insurance agents are paid commissions for every policy they sell. As long as the first client stays with them and pay insurance premiums, they will receive the commission. Imagine you have been an insurance agent for 10 years and on the average you have 50 new clients a year. In the first year, you have 50 clients. In the tenth year, you have 500 clients and everyone is paying you a commission! This means that you get rewarded up to the first deal you gotten.
Multi-Level Marketing
Once you have established yourself, you can even open up an agency with your own agents working for you. Like any other Multi-Level Marketing (MLM) model, you get a part of your agents’ earnings! This means that on top of your own clients, your agents’ clients pay you too! The more agents you recruit and train to become great sales machine, the more leverage and earnings you will have!
Growing Market
Many people have the perception that most have already got their insurance policies and hence, there is little business left on the table. You should know that in every year, there are newborn babies which translates to population is renewing and new business being generated each year – Not to even mention the population is growing. As with better healthcare, people are living longer and they need more funds for retirement and healthcare, which all can be plan for through insurance.
New business
Given that Singapore Government is making annuities compulsory for every Singaporean, this is going to be a big market for you to tap!
Besides the advantages that I mentioned, there are some prices to pay before you can succeed as an insurance agent.
Integrity – you need to have integrity to offer suitable products that meet your clients’ needs and not because you want to increase your sales.
Responsible – you have to be responsible to your clients and respond to them when they need you. You also need to review their status periodically, even potentially there is no new business.
Discipline – as you are almost working for yourself, you must have the discipline to wake up and start work regularly. It is always easy to avoid work when no one is enforcing it.
Personal development – you need to continually improve yourself in terms of product knowledge and soft skills.
Handle rejections – like any other sales job, you need to handle rejections and persevere to make deals.
Agents who are armed with these values and skills will be able to retain their clients and at the same time, attract new clients to increase their earnings.
{ 9 comments… read them below or add one }
hi alvin, so u are considering to be an insurance agent as ur 2nd career ?
Haha, currently I do not forsee myself becoming one :)
Hi Alvin,
sorry but I would need to correct the misconception of agent’s commissions. Nowadays, commissions don’t go beyond 5 – 6 years (some companies pay up to 3 years only!). And even within this period of 5 – 6 years, the bulk of commissions are usually in the 1st 3 years, of the policy. That’s why agents have to continually sell, in order to survive.
Having said that, only hospital & surgical plans / accident (or Shield Plans) pay a recurring commission, as such plans are deemed “Yearly Renewable”, unlike the Whole Lifes, The Terms or The ILPs…
James
http://futures-trading.blogspot.com
Thanks James for your clarification! I think even if commission is for 3 years, it is more rewarding and pays longer than most sales jobs.
Hi Alvin,
to be fair, it’s different from most other sales jobs, cos’ as a Life Insurance agent, you incur expenses, which you can’t claim against your company (only against your income tax). And in reality, you are running a business, and not holding a job. In truth, the closest comparison would be a Real Estate agent.
James
http://futures-trading.blogspot.com
Alrite James. It’s good to see you have great pride in your (job) business! By believing in whatever you do, you tend to do better!
Sorry if I’m beginning to sound like a nag…LOL
Actually, my personal goal is to be a full time trader, in the next few years. My mid life crisis came early and since mid 2004, I’ve been planning this alternative career path.
James
http://futures-trading.blogspot.com
Alvin, you got good understanding for my industry yea. It is true that Insurance job pays well. However, as you already said that it is based on renewals, customer service is very important.
Alot of agents focus on “1 night stand” relationship and never follow-up. This is one of the main reasons why my industry is seen as very “sales” orientated rather than professional work like Doctors or Lawyers.
To me, repeat business is one of the greatest market any agent can have. Imagine you got 500 clients. Everyday 1 client will celebrate birthday. Just doing servicing the agent will die of exhaustion! haha. Furthermore, if 50% (250 clients) refer you 1 case per year, you will be doing very well!
This is definitely a relationship business. Long term wise, the business can autopilot by itself!
That’s what I like about this career!
Cheers!
Hi Ryan, thank you for your clarification. I do believe there is a price to pay to be good in every field. And most importantly, passion is key to success which I can feel from your writing. All the best!