As more American continue to buy life insurance, new and experienced agents should consider selling it.
Most people recognize the vital role that life insurance plays in protecting their family’s financial future, and that’s increasingly reflected in sales of life policies in recent years. LIMRA estimates that some 172 million Americans — more than half of the population — now own individual or group life insurance, a rise of 8 million since 2010.
Those who don’t currently have life insurance say they’d like to purchase a policy in the near future. According to the LIMRA study, nearly half (45%) of U.S. households said they were interested in buying life insurance within the next year. Interest was highest among people under the age of 45 and married couples with children.
Such statistics indicate that selling life insurance presents a lucrative opportunity for new agents or agents who aren’t actively marketing the product. If those numbers aren’t convincing enough, here are six reasons that newcomers and experienced agents should start selling life insurance now.
Agencies are hiring. Confronted with an aging workforce, agencies are desperately looking for fresh talent to fill their ranks and will consider applicants from other fields. Although some states require agents to obtain a license, many companies will reimburse the cost of the course and the exam after the agent sells a certain number of premiums.
More people to sell to than agents. As of 2016, agents specializing in life insurance numbered more than 385,000 in the U.S, with another 45,900 set to enter the industry by 2022, according to the Bureau of Labor Statistics. While that number may seem large, consider that the population of the U.S. stood at over 325 million at the end of last year. As a result, there’s currently one life insurance agent for every 844 persons. Insurance can be a competitive industry, but agents shouldn’t struggle to find an audience to which they can market life insurance.
Higher commissions. Compared to other types of insurance, life policies pay the highest commissions. The first-year commission for auto insurance typically ranges from 10% to 15% of the premium, while health insurance policy commissions top out at 7%. In contrast, life insurance commissions frequently equal 100% or more of the premium. After the first year of a policy, the commission declines to 5% to 10%, but since agents collect that percentage for as long as the policyholder pays the monthly premium, they can expect a steady stream of income for the duration of the policy.
Millennials are starting to buy life insurance. As they start families and consider their financial future, millennials have begun to purchase life insurance, creating a tremendous selling opportunity for agents. In fact, the LIMRA study found that more than half of all millennials (54%) now hold a life policy, up from 47% in 2010. Young agents who can relate to this age group have a better chance of increasing that percentage, especially if they target friends and family members for referrals.
Prospects still want to talk to agents. Despite an uptick in online life insurance sales, consumers nevertheless express a preference for speaking with an agent. LIMRA’s survey revealed that 32% of Americans either purchased or considered purchasing a life policy online, but nearly half said that they’d rather work with a professional when buying a life policy, which suggests that digital platforms have not completely replaced agents in the insurance buying process.
It’s a versatile product. Life insurance doesn’t serve just one purpose. A whole life policy not only provides financial stability for a family after the breadwinner dies, it functions as a powerful investment vehicle, too. The portion of a whole life premium directed to a tax-advantaged cash value account increases over time. The policyholder then has the ability to withdraw funds from that account when needed. To increase sales, agents should strongly emphasize life insurance’s benefits for financial planning to prospects and clients.
Agents entering the field or agents not currently selling life insurance should start selling this product. It will not only benefit their clients, but themselves as well.