Is Working an an Independent Insurance Agent Worth It?

Insurance agents make on average more than $50,000 a year. The top 10% of agents clear more than $125,000 a year. 

Insurance is a lucrative career if you make the right decisions early on. What kind of insurance do you specialize in? Is becoming an independent insurance agent worth it or should I work for a big company?

There are advantages and disadvantages to every decision you make. The decision to become an independent insurance agent is the biggest.

It impacts the types of products you offer, the level of service, and how much support you get as you get your career off the ground.

Keep reading to learn if becoming an independent insurance agent is worth it and the steps you need to take to launch your career.

Product Offering

Insurance agents fall into one of two categories. They’re either captive or independent agents. Captive agents work for one company while independent insurance agents work for themselves.

That impacts the number of products that an insurance agent offers to customers. Captive agents can only sell products that their company offers.

That’s fine for most agents because insurance companies have a broad range of products, from life insurance to homeowner’s policies.

Independent insurance agents aren’t tied to one company. They contract to offer insurance products for several different companies.

They can compare and contrast policies and products to find the right fit for their customers.

Incentives and Quotas

The main focus for insurance agents is to sell policies. That’s how captive agents contribute to a company’s bottom line.

Captive agents may work for insurance companies that have sales quotas or provide incentives to sell certain insurance products.

The result is that this creates pressure for insurance agents to sell. Agents run the risk of selling a policy to anyone, even if it’s not the best fit for the customer.

When the customer needs to rely on insurance, they discover that they didn’t get a good insurance policy. That’s a big reason why so many people distrust insurance agents.

If you do decide to sign on as a captive agent, ask what the sales quotas are. You should also ask for turnover numbers.

A company that has high agent turnover is a sign that the quotas are out of reach or that it’s not a supportive environment.

As an independent insurance agent, you’re your own boss. You decide the quota and you can take the time to focus on the customer’s needs.

Mentorship and Support

What kind of support can you expect to get as a new insurance agent? It depends on where you work.

Captive insurance agents will receive some level of training. The quality of the training depends on where you work. Some companies offer a ramp-up period with in-depth training to help you get started.

Other insurance companies give a book of leads to cold call. That’s the extent of the training. This is something that you need to be aware of

Independent insurance agents aren’t left out in the cold, though. Many insurance agents sign up with a field marketing organization, or FMO.

Working with an FMO gives agents the support and mentorship they need to get started. Some FMOs have contracts in place with carriers, leads, and marketing support.

It can be much easier to become an independent insurance agent than if you had to figure these things out on your own.

How Are Insurance Agents Paid?

You’re getting into insurance to help protect families from disasters. You also need to make a living doing good work.

Captive insurance agents usually receive a full salary to start with. They go through training and build their business.

The salary diminishes over time and the agent transitions to a fully commissioned job.

Independent insurance agents are paid a commission as well. If they work on their own, the insurance carries they contract with pay commissions.

Customer Support

Your insurance business depends on high levels of customer satisfaction. This is where independent insurance agents usually inch ahead of captive insurance agents.

As noted earlier, captive agents may find themselves in a position where they have to sell policies that aren’t the best fit.

On top of that, customers might find that when they do need support, the agent that sold them the policy moved on from the company months ago.

They don’t know what their policies cover and who they’re dealing with. It’s a negative experience that you don’t want customers to remember during your career.

Independent insurance agents offer personalized support to their customers. They are also available to help clients sort out any policy issues and claims.

Tips for Becoming an Independent Insurance Agent

Do you like the idea of becoming an independent insurance agent? Here are a few tips to become a great insurance agent.

The first is to always focus on your clients. They’re the key drivers of your business. The more happy clients you have, the more referrals you’ll get.

Do the little things that most agents don’t to provide a great experience. Contact your customers once a year to review their policies.

Most people have major life changes and don’t think about updating their insurance policies.

One way to bulk up your business is to get serious about who you serve. Too many agents get stuck thinking that they sell insurance to everybody.

Choose a focus, whether it’s small businesses, seniors looking for health coverage, or small families. Narrowing your focus gives you an edge in marketing. People remember who you work with and it’s easier for them to refer quality leads to you.

Start Your New Insurance Career Today!

A career in the insurance industry is a lucrative one. You want to make sure that you start your path right by making some major decisions early on.

Is becoming an independent insurance agent worth it? Should you be a captive insurance agent? There are advantages to both. It depends on your working style and financial needs. For more great career and education tips, check out the other articles on the blog today!