Selling insurance is a rewarding career, both in terms of finances and personal satisfaction. But it also produces a lot of stress. Read on to learn how to manage it.
Unless you watch TV all day and sleep all night, stress is an unavoidable part of life. However, thanks to the unique demands of their profession, insurance agents have more than their fair share of it. Fortunately, adopting common-sense measures will prevent stress from wreaking physical and emotional havoc on their bodies and minds.
What is stress?
Stress is a sensation of emotional or physical tension or strain. It occurs when something or someone in your life threatens, challenges or frustrates you. Obvious stressors include work demands, financial problems, relationship difficulties and child-rearing pressures. Stressors typically exist outside the individual. But it also comes from the inside . . . from the expectations we place on ourselves. When we believe we should be doing better than we are—even though we’re doing just fine—internal stress can make life miserable.
Stress is as old as antiquity. When big cats stalked early hominids on the African savannah, the proto-humans developed the so-called fight or flight response. In order to survive mortal threats, their bodies learned how to pump out hormones such as adrenaline and cortisol. These substances produced the energy and strength they needed to run for their lives. Today, although we no longer have to worry about lions and tigers eating us, our bodies continue to react to the threats of modern living in much the same way.
Even though there are fewer dangers lurking outside, we are as adept at unleashing fight-or-flight responses as our primitive counterparts were. In most cases, our reactions, also known as acute stress, are quick to resolve. For example, the stress of getting into an auto accident or getting into a fight with a spouse is rarely long lasting.
However, when stress becomes unrelenting, it can lead to burnout, anxiety, depression and illnesses such as heart disease, diabetes, hyperthyroidism, ulcers, obesity and others.
The point is, to be a well-functioning human being, it’s important to keep one’s stress levels under control and to prevent acute stress from turning into highly damaging chronic stress.
The Stress of Insurance Sales
According to the Financial Planning Association’s (FPA) War on Stress study, 71 percent of agents and financial advisors said they experienced moderate or high stress levels at work. In addition, 28% and 44% of agents and advisors reporting being more stressed than they were a year ago or five years ago, respectively.
The study confirmed that chronic stress has a toxic affect on insurance agents. It not only harms their health, it also makes it more difficult for them make decisions, maintain their sales activity levels and stay motivated and upbeat.
Why is selling insurance so stressful? For starters, the subject matter can be negative. Your job is to help clients deal with the distressing risks of dying too soon, living too long, becoming disabled and protecting their assets. Even though you work hard to help clients mitigate these risks, sometimes they have trouble focusing on the importance of having insurance. This is stressful because your success depends on them taking action, and usually their response doesn’t meet your expectation.
Another issue that causes stress is variable compensation. How much you make as an agent depends on how much effort you put in and how many sales you can close. When your financial obligations are fixed, but your compensation is variable, it’s natural to worry about bringing in enough money to pay the bills.
Prospecting is a source of stress, as well. For every person you convince to buy insurance, you’ll need to approach 10 to yield three sales interviews. That means nine out of ten people will have no interest in either meeting with you or buying from you. And it’s not just the rejection; it’s the way you get rejected—with phone hang-ups, missed appointments, lies and insults.
Making matters worse, the public typically doesn’t hold insurance agents in high regard. According to Gallup’s 2019 survey of Honesty/Ethics in Professions, only 13% of the U.S. public said insurance agents had very high or high honesty and ethics. Fifty-two percent of people viewed them as having average levels of honesty and ethics, while 35% believed they had low or very low levels. Insurance agents’ spotty reputation has held steady since the Gallup first conducted its honesty survey in 1977. Knowing that the public has little faith in your integrity is a big source of stress for agents who believe they’re ethical. Sadly, agents sense there’s little they can do to change those numbers. It’s just the way things are and have always been.
Another source of stress is the rapid change. For example, decades ago, agents almost always met personally with clients to assess risks and present coverage solutions. These meetings helped to create strong, durable personal relationships. However, today agents are likely to hold meetings over the phone or through videoconferencing, never actually interacting personally with prospects. Although it’s possible to close sales this way, the quality of client relationship will be weaker. This can be stressful for agents who prefer the old way of selling to today’s technology-mediated approaches.
Finally, knowing you must close a minimum number of sales each month can be stressful. Unlike people who work in jobs whose accountability is less directly visible, you must hit your numbers if you wish to keep your job. Although the insurance agent career offers almost unlimited earnings potential, it’s unforgiving if you fail to meet its minimum requirements.
Mitigating the Stress of Insurance Sales
Stress will always be your companion as an insurance agent. But it doesn’t have to be a destructive one. Here are some ways to keep it under control:
- Assess your stress level: Don’t just accept stress as a given. Evaluate how much of it you have in your professional life and think about the impact it’s having. Unless you come to terms with stress, you will always be under its thumb.
- Employ stress-reduction techniques: Better prioritize your tasks, exercise more often, take up yoga, break up your work into smaller hunks, do daily meditation or write in a journal—there are so many opportunities to reduce chronic stress. Take advantage of them.
- Get help: Don’t suffer in silence from toxic stress. Share your feelings with your friends, family and colleagues. Seek their input on ways to get your stress under control. If these measures don’t work, find a professional mental-health counselor to guide you.
- Schedule frequent stress breaks: Working incessantly under stressful conditions is a recipe for mental meltdowns. Your mind and body simply can’t tolerate continuous stress. Instead, schedule frequent breaks in the form as social outings, relaxing at home and working standing up instead of sitting down.
- Take good care of yourself: Don’t forget to engage in healthy behaviors. This includes eating nutritious food, getting enough sleep, not drinking to excess, exercising every few days and engaging in fun, diverting hobbies.
- Learn to reframe your thoughts: Toxic stress is usually self-taught. It can also be unlearned. When you find yourself getting anxious while thinking about a work or personal problem, pull the circuit breaker. Take some deep cleansing breaths. Think about something more pleasant like hiking in the woods of swimming at the beach. Also, try to reframe negative thought patterns with less horrific ideas. For example, instead of telling yourself, “This is horrible,” say, “This could be much worse.”
Finally, keep in mind that many stressors are out of your control. You can’t determine how markets or the economy perform, which politicians get elected and what economic or trade policies get enacted. If you can’t control these things, why worry about them? What you do control are your business goals, your strategies and tactics, how you define your target market and how hard you work every day. Focusing on the activities you manage can be tremendously liberating, freeing you from negative self-talk and the resultant toxic stress.
The Stress of Getting Sued
In addition to the stresses just mentioned, insurance agents face the threat of E&O litigation. Many never take it seriously because they believe their “by-the-book” business practices will nip litigation in the bud. This is a misconception. All insurance agents, regardless of their business practices, have liability exposure, whether they do anything wrong or not. And when they get sued, frustration and anger can flood them with stress. Psychologists have coined a term for this phenomenon: “Litigation Stress Syndrome (LSS).”
LSS is similar to chronic stress. It can lead to sleeping problems, heart disease and even peptic ulcers. Is it any wonder getting sued creates such a viscerally negative reaction? When you’re summoned to court, many things about you get called into question:
- Whether you’ll be able to continue adding new clients to your business.
- Whether your professional reputation will suffer a serious blow.
- Whether your state insurance department will get involved.
- Whether your long-term financial security will take a hit.
Then there’s the matter of your professional identity. Getting sued is an assault on your sense of competence and pride. Up to this point, you may have thought you were an excellent performer. But after getting sued, you may begin to question whether you’re still at the top of your game. If you lose your case, you may never be able to approach work with the same confidence you had in the past.
E&O Insurance: the Cure for Litigation Stress
Given the high stress of getting sued, you may want to mitigate it by purchasing E&O insurance for your business. It not only will cover your legal expenses, it will pay for any settlements or legal judgments a judge imposes on you should you lose your E&O case in court.
If you already have insurance, review your policy to make sure your coverage is sufficient. If you don’t have an E&O policy, buy one as soon as possible. Having a strong insurance policy and attorney working to defend you against a plaintiff’s lawsuit is an invaluable excellent stress-reduction strategy.
In short, having insurance and doing business defensively is your best defense against client lawsuits. Transferring the financial impact of these risks to an insurer will preserve your assets, greatly lowering your stressful worries so you can sleep well at night.
Having E&O insurance is an essential element of an insurance agent or broker risk-management program. Learn more about the BCS Errors and Omissions (E&O) insurance program.
