Insurance Agent Career Information
What an Insurance Agent does
By insuring our lives and making it secure against any possible danger, they truly attain the cult-status of a hero. Thus, if you’ve always remained keen to serve people and help them out in their times of trouble, then here’s the perfect channel for you to take a dip in.
The main function of an ‘Insurance Agent’, is to sell policies that provide financial protection in case of death, accidents or acts of nature. They are also known as:
• Insurance Broker
• Insurance Representative
• Insurance Sales Agents
• Insurance Solicitor
• Financial Planners
• Financial Dealer and Broker
• Investment Advisers.
There are many different kinds of policies that cover many types of situations. An insurance agent explains the different options and helps customers choose the policies that are right for them. An insurance agent discusses with customers how much protection they want and how much they are willing to pay.
Some Insurance agents sell life, health, and property insurance. They may also offer financial planning services to their clients, such as retirement planning, estate planning or assistance in setting up pension plans for businesses. An insurance agent also buys and sells securities within financial markets and trade and distribute financial securities on behalf of financial institutions.
As a result, many insurance agents are involved in "cross-selling" or "total account development." Besides insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This is most common for a life insurance agent who already sells annuities; however, property and casualty agents also sell financial products.
An insurance agent helps individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property. Insurance sales agents who work exclusively for one insurance company are referred to as captive agents.
Independent insurance agents, or brokers, represent several companies and place insurance policies for their clients with the company that offers the best rate and coverage. In either case, an insurance agent prepares reports, maintains records, seeks out new clients and in the event of a loss, helps policy holders settle insurance claims.
Increasingly, some Insurance agents have started offering their clients financial analysis or advice on ways they can minimize risk. Their other major responsibilities include drawing up lists of clients from a variety of sources, contacting the potential clients, usually by telephone, to arrange interviews. Then, interviewing the clients to identify their insurance needs and how the insurance policies might meet those needs.
Other tasks of an insurance agent involves writing an insurance recommendation list or plan to assist the client to make an informed decision, explaining to clients the details of insurance policies including the risks for which they are covered, the rates and comparative benefits and last but not the least, recommending an appropriate amount and type of cover to individual clients
The miscellaneous duty of an Insurance Agent incorporates:
• Collecting premiums and keep records of payments
• Regularly reviewing clients' circumstances to ensure that the level of insurance is appropriate
• Marketing their services to increase their number of clients
• Researching and reviewing available insurance products to make sure that the clients are being offered the best and most appropriate insurance plan
• Obtain information on securities, market conditions, government regulations and financial circumstances of clients
• Dealing in the marketplace on behalf of clients and provide financial advice
• Recording and transmitting 'buy' and 'sell' orders
• Calculating and recording costs of transactions
• Maintaining lists of appropriate investments for clients
• Finally, appropriate planning of buying and selling activities
One could also opt for specializations in:
• Long-Term Care
Property and casualty insurance agents sell policies that protect individuals and businesses from financial loss resulting from automobile accidents, fire, theft, storms, and other events that can damage property. For businesses, property and casualty insurance can also cover injured workers' compensation, product liability claims or medical malpractice claims.
A life insurance agent specializes in selling policies that pay beneficiaries when a policyholder dies. Depending on the policyholder's circumstances, a cash-value policy can be designed to provide retirement income, funds for the education of children, or other benefits.
A life insurance agent also sells annuities that promise a retirement income. A health insurance agent sells health insurance policies that cover the costs of medical care and loss of income due to illness or injury. A health insurance agent may also sell dental insurance and short-term and long-term disability insurance policies.
Although most insurance agents specialize in life and health or property and casualty insurance, a growing number of "multiline" agents sell all lines of insurance. Some are even self-employed.
Insurance agents can gain jobs as:
• Insurance agents, brokers, and services
• Life insurance careers
• Property and casualty insurance careers
• Medical service and health insurance careers
• Pension funds and miscellaneous insurance careers
• Other industries
Many Insurance agents also work for banking institutions, non depository institutions, or security and commodity brokers. As more of these types of institutions begin to sell insurance policies, an increasing number of agents should be employed here, rather than in insurance agencies.
Insurance sales agents are employed throughout the country, but most work in or near large urban centre. Some are employed in the headquarters of insurance companies, but the majority work out of local offices or independent agencies.
Major employers for these Insurance agents are:
• Insurance agencies
• Life insurance companies
• Fire and Marine Insurance companies
• Casualty Insurance company
Agents working for insurance companies may become district sales managers or regional agents, or join the home office marketing staff. A few also advance to agency superintendent or executive positions.
Some, particularly in the property/casualty field, establish their own independent agencies or brokerage firms. These independent agents after becoming licensed as brokers, often assumes the place of account executives in brokerage firms, representing large commercial accounts.
However, many insurance agents prefer to remain in sales too, after they build a good clientele and substantial income. A sales agent might also opt for professional designations such as Chartered Life Underwriter (CLU) or a Chartered Property and Casualty Underwriter (CPCU) and Certified Insurance Counsellor (CIC).
Abilities & Traits Required
Because insurance sales agents also obtain many new accounts through referrals, it is important that agents maintain regular contact with their clients to ensure that their financial needs are being met. Developing a satisfied clientele who will recommend an agent's services to other potential customers is a key to success in this field.
Insurance sales agents should possess the attributes of:
Flexible and enthusiastic, Initiative and diligence, Self-confidence and an outgoing personality, Disciplined as well as hardworking, Able to communicate effectively.
They should be able to inspire customer confidence. Because they usually work without supervision, sales agents must be able to plan their time well. Have the initiative to locate new clients. Multilingual agents also should be in high demand because they can serve a wider range of customers.
Insurance language tends to be very technical, so it is important for insurance sales agents to have a firm understanding of relevant financial and legal terms.
In addition, active participation in a variety of civic, social and religious organizations will give the agents, the potential contacts needed to make sales and establish themselves in business.
Skills and Abilities Necessary:
• Strong Reasoning and Problem Solving Skills
• Analyze ideas and use logic to determine their strengths and weaknesses
• Develop a vision of how a system should work
• Identify problems and review information. Analyze options and apply solutions
• Identify what must be changed to reach goals
• Judge the costs and benefits of a possible action
• Understand new information or materials by studying and working with them
• Use of Math and Science: Use math skills to solve problems. Add, subtract, multiply, and divide quickly and correctly
For insurance agency jobs, most companies and independent agencies prefer to hire college graduates-particularly those who have majored in business or economics. A few hire high school graduates with proven sales ability or who have been successful in other types of work. In selling commercial insurance, technical experience in a field can be very beneficial in helping to sell policies to those in the same profession.
Courses to be opted for are finance, mathematics, accounting, economics, business law, marketing, and business administration, which enable insurance sales agents to understand how social and economic conditions relate to the insurance industry.
Courses in psychology, sociology, and public speaking can also prove useful in improving sales techniques. In addition, familiarity with computers and popular software packages has become very important, as computers provide instantaneous information on a wide variety of financial products and greatly improve agents' efficiency.
Insurance sales agents must obtain a license in the States where they plan to sell insurance. Separate licenses are required for agents to sell life and health insurance and property and casualty insurance. In most States, licenses are issued only to applicants who complete specified pre-licensing courses and pass State examinations covering insurance fundamentals and State insurance laws.
Before agents can qualify as securities representatives, they must pass the General Securities Registered Representative Examination (Series 7 exam), administered by the National Association of Securities Dealers (NASD). To further demonstrate competency in the area of financial planning, many agents also find it worthwhile to obtain a Certified Financial Planner (CFP) or Chartered Financial Consultant (ChFC) designation.
The median annual earnings of wage and salary insurance sales agents are Rs 400000 – 600000. The middle 50 percent earn between Rs 200000 – 400000.
The lowest 10 percent earn Rs 100000 or less, while the highest 10 percent can earn more than Rs 500000 p a.
Median annual earnings in the industries employing the largest number of insurance sales agents are:
Fire, marine, and casualty insurance Rs 400000 Medical service and health insurance Rs 300000 Insurance agents, brokers, and service Rs 350000 Life insurance Rs 450000
Many independent agents are paid by commission only, whereas sales workers who are employees of an agency or an insurance carrier may be paid in one of three ways - salary only, salary plus commission, or salary plus bonus.
In general, commissions are the most common form of compensation, especially for experienced agents. The amount of commission depends on the type and amount of insurance sold, and whether the transaction is a new policy or a renewal.
Bonuses usually are awarded when agents meet their sales goals or when an agency's profit goals are met. Some agents involved with financial planning receive a fee for their services, rather than a commission. Company-paid benefits to insurance sales agents usually include continuing education, paid licensing training, group insurance plans, and office space and clerical support services.
Some may pay for automobile and transportation expenses, attendance at conventions and meetings, promotion and marketing expenses, health insurance and retirement plans. Independent agents working for insurance agencies receive fewer benefits, but their commissions may be higher to help them pay for marketing