How Hard Is a Career Selling Life Insurance? (2024)

Is life insurance a good career path? Actually, selling life insurance is a tough way to make a living and an even more difficult way to sustain a lucrative, long-lasting career. Some industry analysts, like the job site,, report agents burning out within a year.

The difficulties facing new life insurance agents are great in number. The pay is usually straight commission. Finding qualified customers yourself is notoriously difficult, andthe few leads that your company may give you have usually been contacted by dozens of agents already.

So, with these challenges, it's understandable that some people might ask: Is life insurance a good career path? Since selling life insurance has its pros as well as its cons, the answer could be yes, depending on your point of view.

Read on to find out more about the potential for a career in life insurance sales.

Key Takeaways

  • Successful careers in selling life insurance take time and perseverance.
  • Life insurance agents are paid in commissionsand must find customer leads on theirown in acompetitive market.
  • It can be relatively easy to find jobs selling life insurance.
  • Life insurance sales can add up to passive income, as once you sell a policy, you continue to earn a commission on it, providing the owner of the policy pays their monthly premiums.

What Is Insurance Sales?

Insurance sales is selling people the different types of insurance that they need. This can include life insurance, as well as car, health, disability, and home insurance. People who sell insurance policies are known as insurance agents or insurance brokers. Insurance agents might focus on different areas of insurance sales, such as selling to companies or to individuals.

Insurance agents can set up shop in a variety of ways. Some may work for larger brokerage firms or agencies, selling the different policies they offer. They might also work for individual insurance carriers or be self-employed. It is more common for insurance agents to work on commission than to make a salary. This means that they make money when they make a sale.

Pros and Cons of Selling Life Insurance

On the bright side, selling life insurance offers a few benefits difficult to find in other careers. First, life insurance sales jobs are abundantand easy to find. Second, commission percentages are very high compared to other insurance sales, such as health insurance.

Best of all, life insurance agents get paid commission renewals for as long as a sold policy is in force. This creates a passive income stream.

However, even when you locate a good prospect, the product itself is hard to sell. People are loath to discuss or even acknowledge their own mortality. Moreover, unlike a new car or cellphone, life insurance provides none of the instant gratifications that lead people to make impulse purchases.

Cons Explained

Commission-Based Pay

The majority of life insurance companies classify their agents as independent contractors. They offer neither base salaries nor benefits. This means an agent can work a full week, but if the agent puts no sales on the books, they go without a paycheck.

The upside to not being classified as an employee is the company cannot force you to work set hours, you set your own schedule. That said, life insurance sales, particularly during the first few years, requires working a ton of hours if you want any chance at making a decent living.

A few companies offer employee status, which comes with a small base salary and benefits. Agents at these companies are held to rigid production quotas. Miss your monthly sales target more than once or twice and you could be shown the door.

Effort of Customer Acquisition

Finding qualified life insurance prospects is fraught with difficulty. Even with harnessing the power of the internet, good leads are hard to come by. Lead vendors abound online, but most of their leads are nonexclusive, meaning they get sold to multiple agents.

Exclusive leads, when you can find them, are very high in price. Your close rate, meaning the percentage of leads you actually sell, has to be phenomenal just to break even with exclusive leads. And employers whoprovide leads almost always make you take a lower commission in return.

For these reasons, many life insurance agents drum up business the old-fashioned way: cold-calling and door-knocking. These methods still work, even in the 21st century, but being a successful insurance agent requires a lot of perseverance and very thick skin.

Difficult Sales Process

Even when pitching to the most-qualified prospect, do not assume you have an easy sell. Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step. When and if you clear that hurdle, your next task is creating urgency so they buy right away.

This is also difficult because the product provides no instant gratification and leaving the appointment without signed paperwork almost always means you have lost that prospect forever. The client may be sincere when they say they will think about it, but chances are they will not give it five minutes ofthought after you walk out the door.

On the flip side of all of these difficulties, there are benefits too.

Pros Explained

Many Job Prospects

Compared to most finance careers, becoming a life insurance agent is easy. No educational requirements exist beyond a high school diploma at most. Some states require you to take a licensing course and pass an exam, but truthfully, these are as easy as a fifth-grade spelling test.

Jobs selling life insurance are everywhere. The online job search sites are full of them. Because most companies offer commission-based pay with no guaranteed income, they have no incentive to limit hiring. They offer jobs to anyone interested and hope a small percentage of hires become productive agents.

Most companies even reimburse you for the cost of obtaining your license but only after you sell a certain amount ofpremiums.

Potential for High Salary

By far, life insurance sales offer the largest commissions in the insurance industry, but it depends on the type of insurance being sold. For example, most auto insurance salespeople earn a percentage of the policy that is purchased. With life insurance, you earn a percentage of the policy when it is sold, and then you get another commission each time it is renewed.

The U.S. Bureau of Labor Statistics reports that insurance sales agents earn a wide range of salaries. The bottom 10% only earn an estimated $28,000 a year, but in the high range (90%) earn $125,000. The median salary comes in at nearly $51,000 a year.

In addition to high commissions, some life insurance companies advance their agents a specific amount of commission based on calculating the agent's earning potential rather than making them take it as earned, but others do not. So, for example, on a $100 per month policy, with a six-month advance, you would receive a check for $600 the day the policy is issued.

The downside occurs if the policy lapses within the firstsix months;if that happens, your employer charges back the unearned portion of your advance.

Renewal Commissions

The commission you earn on a life insurance policy sale is not limited to the first year. Rather, you keep getting paid as long as the policy is in force. Your commission percentage on a policy drops after the first year, but you keep earning 5% to 10% as long as the policyholder pays their monthly premium. This is the passive income you receive each month without even having to get out of bed.

Most life insurance agents do not last a year in the business, and even fewer make it five years. The ones who persevere, however, are rewarded immensely with renewal commissions.

Tips on Being Good at Insurance Sales

Selling insurance is a business that depends on developing good relationships with potential clients. This leads to more sales, as well as potential referrals down the line. There are several ways to develop these professional relationships.

Learn About Customer Service

If you've worked in customer service already, those skills will translate directly to selling insurance. If not, you may want to find a course or interview successful agents to learn more about how to interact with customers.

Focus On Solving Problems

When a customer comes to you, they don't necessarily know what they want to buy, but they know they have a problem that needs to be solved. If you can demonstrate the ways your product can solve their problem, you're more likely to make a sale.

Build a Network

Even outside an office setting, you can build a professional network. Again, it's important to focus on building relationships rather than sales. Connect with more experienced agents who may be able to mentor you or provide advice about starting your career. As you build your network, you will find that many of these relationships can help you expand your business.

Make a Professional Impression

If you're working in an office, it's easy to know how to make a professional impression. But if you're self-employed, meeting with clients at places other than an office, or connecting over the phone, it can be harder to do. Consider how you dress and communicate in order to present a professional appearance.

Play the Long Game

It will often take a lead multiple times interacting with you before they are ready to make a purchase. Focus on developing a relationship and understanding their needs. If you are willing to be patient and play the long game, you are more likely to secure a long-term customer who is willing to refer you to other potential customers than if you are pushy or too focused on making a sale.

Is Selling Life Insurance a Good Way to Make Money?

You can make a good living selling life insurance, especially if you continue to earn commissions on policies you have already sold. However, it is not an easy career, as it requires constantly working to find leads, build relationships, and make sales.

How Much Money Can You Make Selling Life Insurance?

Annual income for a life insurance agent can vary from as little as $28,000 per year to as much as $125,000 per year. How much money you can make selling life insurance will depend on a variety of factors, including your own ability to convert leads to customers, as well as the area in which you live.

What Is the Most Profitable Type of Insurance to Sell?

On average, life insurance is one of the most profitable types of insurance to sell. Whether you are selling them to employers or individuals, these policies tend to be large, with significant annual premiums. In the first year, a life insurance agent can earn anywhere from 30% to 90% of this premium, along with 5% to 10% of premiums paid in later years.

The Bottom Line

Life insurance agents make a living selling insurance policies, either to individuals or businesses. They are generally paid in commissions and must find customer leads on their own. Being successful in this type of career takes time and perseverance.However, once you build a professional network and start to acquire clients, life insurance sales can add up to passive income. Once you sell a policy, you can continue to earn a commission on it as long as the owner continues to pay their monthly premiums.

How Hard Is a Career Selling Life Insurance? (2024)


How Hard Is a Career Selling Life Insurance? ›

You can make a good living selling life insurance, especially if you continue to earn commissions on policies you have already sold. However, it is not an easy career, as it requires constantly working to find leads, build relationships, and make sales.

What is hard about selling insurance? ›

Finding new leads can be challenging

Your success as an insurance sales professional is highly dependent on the number and quality of leads you find. Given the fiercely competitive market, there's also a strong chance that the leads you find may already have been contacted by several other insurance agents.

Is selling insurance hard to learn? ›

Selling insurance might seem challenging at first, but with an in-depth understanding of the landscape, effective marketing strategies, and a repertoire of essential skills, it's a mission that's entirely achievable. For more information on successful selling, have a look at our How to Sell Insurance article.

How many life insurance agents fail? ›

More than 90% of new agents quit the business within the first year. The rate increases to greater than 95% when extended to five years.

What is the hardest part of being an insurance agent? ›

An agent who is only out to earn a commission, regardless of the needs of the client, is not likely to last long in the business. Agents and brokers who listen carefully to what their clients and prospects say will be able to earn their trust, which is the hardest part of their job.

Why do most life insurance agents fail? ›

Insurance agents succeed when they prioritize their customers' needs over their own profits. The most commonly cited reason insurance agents fail is that they fail to listen to their customers and take the time to find the best product to suit their needs.

Is life insurance the hardest thing to sell? ›

Life insurance is a very difficult product to sell. Simply getting your prospect to acknowledge and discuss the fact they are going to die is a hard first step. When and if you clear that hurdle, your next task is creating urgency so they buy right away.

Why I quit being an insurance agent? ›

One of the biggest reasons that insurance agents quit is the fact that they have unrealistic expectations. The insurance industry is huge, which leads many people to think they can easily make a large income by selling insurance.

Is selling insurance a stressful job? ›

Being an insurance agent can be a rewarding career, but that doesn't mean it doesn't have its share of frustrations. Like any job, selling insurance comes with pressure to perform and job related stress.

Is selling insurance a good career path? ›

Yes, selling insurance can be a good career for independent workers with strong sales skills. Sales agents often earn bonuses and commission, so their income potential depends on their talent.

How old are most insurance agents? ›

Insurance agents make on average $51,936 per year. The average age of an Employed insurance agent is 45.9 years old. In the next 10 years, the number of insurance agents is expected to grow by 8%.

Is life insurance declining? ›

In addition, life insurance ownership among adults in the United States declined from 63 percent in 2011 to 52 percent in 2023.

Who is the most successful life insurance agent? ›

Ben Feldman

Why are insurance agents so rich? ›

One of the primary reasons insurance agents can accumulate wealth is their commission-based income structure. Unlike salaried employees, agents earn a percentage of the premiums they sell to clients. As they build a client base and generate more sales, their income potential increases.

What type of insurance agent makes the most money? ›

While there are many kinds of insurance (ranging from auto insurance to health insurance), the most lucrative career in the insurance field is for those selling life insurance.

Can a insurance agent be a millionaire? ›

It isn't the most glamorous profession, and it often gets associated with pushy salespeople that force their products down your throat. But here is the reality: there is a lot of money in the money business! The financial services industry has created more millionaires than any other industry.

What is one of the biggest challenges in selling insurance? ›

1. Understanding Client Needs. One of the biggest challenges for insurance sales agents is understanding client needs.

How hard is it to make a living selling insurance? ›

The career of a life insurance agent is lucrative but involves constant hustling, networking, and many instances of rejection before a sale is ever made. Life insurance agents might be given a small salary to get started but are otherwise primarily dependent on commissions to make a living.

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