Insurance Leads Blog

Thursday, December 5, 2013

How To Start Your Own Life Insurance Agency

When you think of insurance most people think of health insurance (especially now) and/or auto insurance. If you are thinking about starting a career as an insurance agent you might want to consider becoming a life insurance agent.

This does not mean you should only sell life insurance. Many producers will sell multiple lines of insurance including auto, home, health and sometime crop depending on your location.

If you are wanting to know how to start a life insurance agency, the following information, tips, and ideas will help you get on your way.

Like any business you will need to first consider your start-up costs. This is especially important if you are planning to be an independent insurance agent considering you will not have a base salary or budget. Captive agents (Farmers, State Farm, New York Life, etc.) are provided with career training, a little base salary, and a small budget to get started. You can be successful as independent insurance producer or a captive one, but it is important to know what you will be in order to better establish start-up costs. (Difference between captive agents and independent agents)

Since captive agents are given a start-up budget, we will discuss what costs can be expected by an independent life insurance agent when they start their business.



There are key component to your business that you must have and there are things that can be beneficial but not necessary at first.

The musts:

1. State Insurance License - To get an insurance license you must pass the corresponding test that your state requires. For instance, if to be come a life insurance agent, you will take the life and health insurance test (pass with 70% or better). You will have to pay to take this test, but it usually is not too expensive. Once you have passed you must pay for your insurance license, but again, it is only a small fee. You must renew your insurance policy every other year, but confirm this with your state insurance department

2. Creating a Business Partnership, LLC, or Corporation - It is recommended that you seek legal advice to determine what type of business you should create. It will depend on your current financial, marital, and partner situation. You will pay for legal fees as well as fees to the state in which you incorporate. You also must take into consideration annual state business fees and taxes.

3. Computer, Printer, and Phone (internet) - It goes without saying that you will need these items. One tip, consider getting a lap top, small printer, and mobile phone so you can take them with you if you have to travel. Make sure you have a good internet connection.

4. Errors & Omissions Insurance (E&O) - You will need this to protect you and your insurance business from mistakes that could be made. Check with the individual insurance companies that you become licensed with to see how much insurance to get. Example: My E&O insurance for $1,000,000 is $450 a year, but expect prices to be anywhere from $500 - $800 per year.

5. Leads/Prospects - This is probably the most important thing to have in order to start a career as a life insurance agent. As a captive agent, you might receive a few leads from your home office. As an independent life insurance agent you will need to find leads in other ways. There are many ways to go about getting leads, but there are two ways main ways I recommend for any new agents. First, your family and friends. Do not badger them constantly, but just make sure they all know what you are doing. They will come to you in their own time. The second way is using internet insurance leads. I say internet insurance leads because they are much cheaper than generating leads thru direct mail and much easier to work that cold calling people.

Beneficial, but not necessary:

A Website - In today's tech savvy world, this is borderline a must have. The good thing is that you can probably get started with a free website you can get on sites like Wix.com or 1and1.com. Facebook is also a good place to send your clients when they search for you on the web. When you begin to progress in your career you can look into having a professional website built for lead generation purposes. To begin, a good information website will do.

Lead Management System - If you plan on auto-dialing or keeping track of hundreds of leads you will need a good lead management system. These systems can purchased as a one time software install or a monthly subscription. With Leads To Insure your agent profile comes with a basic management system with built-in ROI tools.

Office Space - To get started you can work from home. If you have some seed money you can look into getting an office. Make sure you office is easily accessible to your target market. For example, if you live in a big city and plan on targeting only a certain area of that city make sure your office is close so that clients can easily visit you.

There are other items that you might need as you become a life insurance agent so do your best to be flexible and patient. Please do your research! Countless numbers of agents have failed by underestimating how much time and money it can take to become a successful life insurance producer. We found this article by agent-equity.com (https://www.agencyequity.com/guide-to-starting-an-independent-insurance-agency?showall=&start=1) to be helpful for people looking to become an independent insurance agent. They go into a little more detail about certain aspects of the start-up process.

Feel free to try our life insurance leads. We are always hear for support and would love hearing from you. Call us at 888-400-2756.




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