Is selling life insurance a good job? It ROTS don’t do it!

If you’re reading this blog it’s probably because somebody told you that selling life insurance is a good job that you can make a ton of money at (maybe recruiter told you this). Right? Well, I used to work in this role and I have a ton of truths to tell – so listen up for the real story on working as a life insurance agent

For those of you who are new to my blog/podcast, my name is Sara. I am a CFA® charterholder and I used to be a financial advisor. I have a weekly newsletter in which I talk about financial advisor lead generation topics which is best described as “fun and irreverent.” So please subscribe!.

Key Takeaways

• False Promises of High Earnings: Recruiters promise high earnings, but commission-based pay often leads to financial struggles at the start.
• Exploitative Practices and Public Perception: Leadership employs questionable sales tactics and pushes aggressive quotas. Life insurance agents face negative perceptions and pressure to sell high-commission policies.
• Challenges: Leads are unreliable, and training programs are more exploitative than educational. Flexible working conditions are limited, though some find personal satisfaction in the role.
• Career Advice: Seek mentorship from a financial advisor and avoid traditional recruiting methods. Focus on developing a solid marketing strategy and building a sustainable market.

Final Recommendation: Avoid becoming a life insurance agent; consider fee-only wealth management roles instead.

Real talk: selling life insurance is not a good job

Let me save you the hassle of smashing to pieces what all the recruiters and the insurance training programs are trying to make you believe. Life insurance is not a good, noble career the way it is done most of the time. It’s a demoralizing, mercenary profession propped up by the millions of dollars of insurance lobbying by the big carriers spend making sure they can sell their crap products at fat commissions.

Here are the main reasons that a job selling life insurance stinks.

• You have to work on all commission and starve when you first start out which will test even those with the strongest moral precepts.
• The leadership stinks, lies, and are a bunch of morally flawed Neanderthals. Most of them made their money by using high-pressure sales tactics that they got away with before the internet made everyone aware how ridiculous they are, and they want you to follow the same pushy, archaic methods and meet some ridiculous quota within the first 3-6 months or you’re fired.
• You are viewed by the public on the same level as used car salespeople and timeshare pushers.
• The way they set it up, it’s hard to make a living serving people as they need to be served, with term life insurance which should be the purpose of life insurance. The commissions are dramatically lower for term insurance and it’s a one and done commissions. If you want to be able to eat though, you are going to have to sell whole life or variable products at a higher commission + trailers that exist as long as the policy lasts. These products are way overpriced and are of dubious value. So you’re kinda in a catch 22.
• There aren’t that many companies that sell life insurance leads, and often buying leads isn’t a good idea anyways
• According to the Triple-I, in 2022, the total amount of life insurance benefits and claims amounted to $797.7 billion. This highlights the vast scale of the industry, where individual sales tactics are driven by significant financial returns, reinforcing the heavy pressure on agents to sell high-commission policies.
• The training programs are exploitative. See this video on financial advisor training programs.

For all of these reasons, if you’re on LinkedIn and some recruiter approaches you, run the other way!

Let’s recap my perspective on selling life insurance:

What life insurance agents make

I couldn’t find any stats on life insurance agent salaries, but many of the people who sell life insurance aren’t just agents – they also got their Series 7 and other licensing and become financial advisors through the brokerage firm associated with the agency, helping their clients with investments and other wealth-related services.

Here is a blog about what financial advisors earn. It may help you to conceptualize what life insurance agent likely earn for salary.

How to become a life insurance agent

Despite all I’ve said, if there are people out there  who still want to try out one of these life insurance sales jobs, here is my take on how to become a life insurance agent.

I wouldn’t do it the seemingly easy way, which is to get recruited into one of the training programs. As you heard in my video above, these are schlocky and will probably be a negative experience for you and everyone else involved.

Instead, I would find a financial advisor with a book of business that is mostly insurance-based, and try to become his or her successor. There is a scarcity of successors and a lot of advisors are looking for someone good to run the show so they can sell their firm or retire. Now, you’ll still be involved with the good parts of being a life insurance agent – getting to help people manage longevity risk, etc., – but you won’t have the suffocating quota hanging over your head. You have to find the right person to work for, though, and like I said before a lot of these people came up at a time when schmucky tactics were the norm.

Choose your boss wisely.

There are alot of arrogant swaggering peacocks strutting around these financial advisor companies – stay AWAY from them!

How to sell a life insurance policy

Learning how to sell life insurance successfully is the pits. Many people need life insurance but getting them to buy it is like trying to convince them to floss their teeth every night. The responsible people are willing but most of the time there’s a fair degree of jockeying.

People invest in the stock market, more or less, for the same reason – they to some extent have a greed for higher returns than what they’d get having it in a checking account. Not saying they’re all highly greedy, but there is some greed involved. But there’s no greed playing a part when someone thinks about buying a life insurance policy, it’s entirely fear. Fear comes and goes depending upon emotion and sometimes very rational people can be hard to convince.

What most insurance agents do when they first start out is to go sell a policy to anyone in their immediate network – friends, family, civic groups, etc. – that they have a relationship of sufficient enough trust with. Then after a few months they exhaust that well and they have to branch out and meet new people and that is where most of them fall down.

If you want to make it as an insurance agent (which, by the way, I never really did – I quit to raise my babies because I found the whole thing ridiculous and I am glad I did so) I would suggest putting a life insurance marketing strategy into place when you first start. That way when you get done selling policies to all your college friends, you have a market you’ve nurtured.

I don’t know of a reputable source that sells life insurance leads. Which means you’d have to construct a life insurance lead generation funnel yourself. I would suggest using social media apps such as LinkedIn messenger – but I’m biased as that is my specialty. Depending upon the age and career type of the person you are trying to reach that may or may not be viable.

Also, set up a highly focused niche and learn everything about how the ideal consumer in that niche operates. Where they live, what they read, how they think.

I did a podcast with Barry Flagg about questions to ask that enable you to sell insurance ethically. Have a listen.

There are actually some benefits to selling insurance for a living

Benefits of Selling Insurance

Let me guess, you’re still reading because you stubbornly insist, “Yes, I want to sell life insurance!” I was once a life insurance agent myself, and here’s what I found rewarding about it:

• Helping Families: I found it deeply satisfying to help families protect themselves.
• Flexibility: The ability to work from home or part-time was appealing, especially with a growing family (I had four kids in five and a half years).

Flexibility in Practice:

• Work from Home: The flexibility is real but limited. For instance, I couldn’t complete client applications from home due to requirements for ink signatures and no corrections on forms. After having my baby, I had to manage paperwork with him in my arms, which was challenging.

For a deeper dive into the nuances of life insurance and related products, check out this post on Universal Life Insurance Rates.

Other than the pseudo-flexibility, there aren’t many major benefits I can think of right now—though it might be because it’s getting late and I’m ready for bed!

Sara’s upshot

If you’re thinking of becoming an insurance agent, don’t do it. Go work for a fee-only wealth management firm instead. I’d rather have you Google “fiduciary financial advisor near me” and then show up on their doorstep begging for a job than having you work selling life insurance.

Or you could join the Transparent Advisor Movement and try to materialize opportunities that way. Learn more about it in this video:

What’d ya think? Was this helpful?

If yes…

• I am an outsourced CMO for companies who need regular, full service marketing – blogging, social media posts, newsletters, etc.
• I am an hourly consultant for those who just need one-time or recurring guidance
• People hire me as a ghostwriter to write content for a project fee
• I have a social media training program
• I have a book about what to say on LinkedIn messenger

Just letting ya know, in case you need me at some point.

Thanks for reading. I hope you’ll at least join my newsletter about financial advisor lead generation.

See you in the next one!

-Sara G

Sources

Imran, Saad. 30 August, 2024. Top Life Insurance Statistics for 2024. Market Watch Guides. https://www.marketwatch.com/guides/life-insurance/life-insurance-statistics