Is Life Insurance a Good Career Path? What You Should Know

Having a career in life insurance can give you the chance to work for yourself as an independent insurance agent or as a salaried company employee while also offering you job stability, competitive income, and a flexible schedule. However, working in the life insurance industry can include arduous tasks and long hours. Is a career in life insurance a good path for you? Find out in this guide

Is Life Insurance A Good Career Path?

Being a life insurance agent has both advantages and disadvantages. A life insurance agent can make a respectable livelihood, on the one hand. On the other side, the work comes with a number of obligations and difficulties.

Before deciding to become a life insurance agent, there are a few things you should consider. These include your abilities, character, and work ethic. Consider pursuing a profession as a life insurance agent if you possess the qualities necessary for success.

Different Career Paths For Life Insurance Agents

#1. Life Insurance Sales Reps

The most typical route into the life insurance industry is through the sale of life insurance. Since life insurance salespeople frequently receive a 100% fee, the potential earnings in this line of work are very diverse. People that put a lot of effort into finding new clients and are skilled at closing deals can succeed greatly, while others may make little or no money. In this industry, it can be difficult to make a livelihood, especially in the beginning, but those who are successful can make a lot of money both now and in the future.

Life insurance representatives are exempt from the Fair Labor Standards Act’s minimum wage requirement because they work as outside sales professionals. As a result, their income may be entirely based on commission and not on a set base salary.

Salary And Qualifications

According to Comparably.com, life insurance sales professionals in the United States make an average salary of about $59,000 per year, with some making substantially less and many making significantly more.

Depending on the life insurance firm one works for, the commission one receives for each policy sold varies. The majority of firms give the sales reps a sizeable share of the first year’s premium (up to 80 or even 90 percent).

Remaining in the business allows life insurance salesmen to continue earning residual income from prior sales, as the person who sold the policy is typically paid a percentage of the renewal premiums (usually around 5%).

How residuals are paid depends on the terms of the contract between the business and the sales representative. People who quit their jobs within the first few years of working for a company typically do not get paid for the goods they sold.

According to the insurance rules of the state or states where they solicit business and sell policies, life insurance sales representatives are required to hold a license. Typically, they need an insurance producer license.

When it comes to life insurance, consumers have choices; they are not required to purchase it straight from a life insurance sales agent. This fact increases the level of competition and difficulty in the field. As an illustration, individuals who work for a business that provides benefits frequently obtain life insurance paid for by the employer and have the option to purchase additional coverage from the company that their employer uses.

Life insurance is frequently sold by financial planners and general insurance providers (like those that provide home and auto coverage). The likelihood of consumers making a purchase from someone they already know is high.

#2. Life Insurance Actuaries

The life insurance sector heavily relies on risk analysis. Business analysts that specialize in risk and probability in relation to the kind of insurance that a company is offering are called actuaries. Actuaries analyze variables that affect the likelihood that a company will be required to make a payout on a life insurance policy given a set of conditions, such as age, weight, smoking status, occupation, medical history, etc. They establish the premiums that a life insurance provider should bill for policies that fall within particular risk categories.

Salary and Qualifications

The median salary for actuaries (across all types of insurance), according to the Bureau of Labor Statistics (BLS), is more than $111,000 per year. According to ZipRecruiter, life insurance actuaries typically earn roughly $107,000 per year.

A degree in a subject that emphasizes data is necessary for employment as an actuary. A bachelor’s or master’s degree in mathematics, statistics, finance, economics, or a closely related discipline is often required of actuaries.

A degree is insufficient on its own. Actuaries are required to pass a set of tests given by the Society of Actuaries (SOA), which are intended to guarantee that they can prove proficiency in the areas mentioned above.

Actuaries can pursue advanced status after obtaining their first SOA membership credentials by completing additional SOA tests. These credentials include Fellow of the Society of Actuaries (FSA) and Chartered Enterprise Risk Analyst (CERA).

Actuaries’ employment opportunities are predicted by the BLS to increase by 24 percent between 2020 and 2030, which is more than the eight percent average for all occupations.

A total of 2,400 jobs are anticipated to be added annually at this rate of growth, the majority of which are anticipated to be replacement jobs for workers who change careers or retire.

#3. Life Insurance Underwriter

Also employed by life insurance businesses are underwriters. Life insurance underwriters choose which category to assign applicants for coverage to, rather than using statistics to determine what the insurance business should charge for policies based on each category of risk. They look over each applicant’s information, including age and medical history, and use that data to decide whether or not they qualify for coverage. Each qualified applicant is put into a risk group. The premium that the person must pay in order to obtain coverage falls within that category and has been calculated by an actuary.

Salary and Qualifications

According to the BLS, the typical annual salary for insurance underwriters is nearly $71,000 across all industries. According to ZipRecruiter, this is roughly how much the average yearly salary for life insurance underwriters is.

Underwriters with at least a bachelor’s degree in business administration or a closely related subject are preferred by the majority of life insurance companies.

Although some employers may insist that their underwriters obtain an insurance producer’s license nonetheless, insurance underwriters are not required to hold a license.

Chartered Life Underwriter (CLU) accreditation is an option for seasoned underwriters who want to set themselves apart.

According to the BLS, between 2020 and 2030, there will be a 5% reduction in the number of positions available for underwriters. This is probably brought on by the insurance sector’s growing reliance on technology.

Pros and Cons Of Taking A Career Path In Life Insurance

Are you unsure if a career in life insurance is a good path for you? Here are the pros and cons of choosing a career in life insurance

Pros

#1. Variety

The insurance industry offers a huge variety of prospects. And this gives you the freedom to explore various vocations. You could work in underwriting, claims, insurance sales, insurance broking, and more.

Each of these alternatives offers a wide range of fascinating employment possibilities. Additionally, there is another reason why the insurance sector presents professional opportunities for everyone.

#2. Learning new skills

The benefit of having a range of responsibilities is that each one allows you to pick up new talents. You may improve your networking, customer service, and communication abilities by working in sales. Desk-based jobs, on the other hand, help you learn problem-solving, analytics, and research.

Insurance for rewards is a totally customer-focused sector. This is especially useful if you want to make a positive difference in the lives of many individuals.

For the majority of people, selecting an insurance policy is a difficult choice. They’ll find things simpler thanks to your information. Additionally, you will remain driven throughout your career because to the intangible benefit of feeling good about contributing to society.

#3. Minimal hurdles to access

There are numerous insurance positions that can be filled without a college degree. The majority of training and learning takes place on the job. However, you might need to go through some sort of compliance training at your workplace.

Additionally, your employer may occasionally need you to complete online courses. Any state licenses you have will remain valid if you do this. Additionally, you stay current on industry developments.

#4. High Potential for Earnings

There is a lot of money in the insurance sector. This is due to the fact that the great majority of insurance brokers receive a commission for each policy sold. All you need is a strong work ethic and the capacity for interpersonal communication. Additionally, insurance renewals offer a consistent source of income.

Cons

Before responding YES to the question, “Is life insurance a good career path?,” one should be aware of a few drawbacks.

#1. The stress of setting goals

Meeting numerous targets and quotas puts pressure on those working in this profession. This is a matter of concern for individuals that have trouble turning leads into sales. Making sure that you are clear about the pay structure is one method to combat this.

#2. Fast-paced workplace culture

The insurance industry is incredibly dynamic and demanding. Even if one develops outstanding relationships with many potential customers, there may not be many conversions to show for it. Here, you must have the ability to handle numerous rejections, perseverance, and a good mindset.

What Is The Highest Salary For Life Insurance?

Life insurance agents make, on average, $62,000 to $76,000 a year.

What Are The Benefits of Life Insurance?

By purchasing life insurance, you can shield your spouse and kids from the potentially catastrophic financial losses that could arise in the event of your passing. It offers financial stability, aids in debt repayment, assists in covering living expenditures, and aids in covering any last or medical costs.

What Is The Hardest Insurance To Sell?

Selling life insurance is exceedingly challenging. A difficult initial step is simply getting your prospect to admit and discuss the idea that they will die.

How Do You Make Money From Life Insurance?

Selling life insurance as an investment is one approach to generating income from it. Another strategy is to employ it as a means of retiring. Finally, you can cover both estate taxes and funeral expenses with life insurance.

In Conclusion,

A career path in life insurance can be ideal for you if you’re a self-driven sales professional looking for work in an industry with limitless earning possibilities. If you are a highly analytical person wishing to use your understanding of business and statistics to work as a risk management expert, the same is true for actuary and underwriter employment. Review a list of in-demand careers with bright futures if you’re unsure and want to look into additional options.

Is Life Insurance a Good Career Path? What You Should Know

Is Life Insurance A Good Career Path?