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Selling Life Insurance: Road to Riches or Poverty?

 

Even during times of recession, sales is one career path that seems to always be accepting applications, even for those without much experience. Salespeople are often regarded as the last employees to get laid off. But sales can be tough during an economic slowdown, in which the income is almost nonexistent until the salesperson has established himself and built confidence. The situation is no different in selling insurance, a career path that some see as lucrative but others consider only slightly more reputable than a pyramid scheme.

 

The Pros

In order to sell life insurance successfully, it helps to be confident, know plenty of people in your area, and believe in your product -- just like virtually any sales job. Liberty National, an insurance company that’s been around since 1900, touts many of the perks it offers agents: a long track record of success, opportunity for growth, a potentially lucrative career and an intense training period. Employees can also receive low cost plans for group life insurance, health insurance, scholarship programs for training courses, both short-term and long-term disability and sales incentive trips. According to one of its calculators, if you sell three group term policies a week, you can earn $57,000 a year. If you sell five cancer expense policies a week, you’ll earn $92,560 a year.

 

Liberty National’s Web site also states a fact that most would agree with: customers are always looking to purchase insurance. Another advantage in working with a company that sells life insurance is that the agent doesn’t have to just sell one product when working with a company that offers life insurance. For example, Liberty National can help customers with supplemental health and accident expenses, estate settlement, special business needs, tax-sheltered plans, Section 125 cafeteria plans and payroll deduction plans.  And even if the agent sticks with just life insurance, he has plenty of options to offer the customers, from whole life to term to convertible term to return of premium.

 

The Cons

A brief search on Google will come up with several sites that accuse life insurance companies of being similar to multi-level marketing companies that focus on recruiting and get-rich schemes. Several commentators accuse insurance agents of getting a substantial commission off the permanent policies, contending that the amount is so large that it’s virtually the same as theft.

 

Of course, just because there’s criticism doesn’t mean that the company isn’t legitimate. Several bloggers aren’t shy about criticizing companies such as Liberty National, even though the company has passed the test of time, and is now moving toward its 100th birthday.  But there is cause for concern when a recruiter talks much more about the money to be made in the business than the product itself.

 

And the turnover rate in life insurance sales is actually quite high. According to www.agent-central.com, 85 percent of those selling life insurance don’t last longer than 18 months.  Does this mean that selling life insurance isn’t for you? Not necessarily. There are still plenty of successful and honest agents out there who have persevered.

According to Police Chief Magazine, the turnover rate is much lower in other professions, including some of those careers recognized as the most stressful: teaching and law enforcement. An article on Police Chief Magazine states that the average tenure of a new police officer is 33 months. The average turnover rate for nurses is about 12 percent, and for teachers the turnover rate is about 13 percent, according to the Police Chief Magazine article.

 

Conclusion

Ultimately, it’s up to the individual life insurance salesman to be successful. According to Liberty National’s calculator, an agent who sells 10 whole life policies a week -- two a day -- will be earning more than $150,000.

But then again, an agent that sells nothing makes nothing.

The best option for a starting salesman is to research the company and its track record, get to work on a contact list as soon as possible and be ready to work hard.

 

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