Industry insights

How to Make Selling Life Insurance a Career

Is selling life insurance a good career opportunity? While selling life insurance can be challenging, if you enjoy helping others and don’t mind putting in long hours, you can turn it into a worthwhile profession. If you’re interested in financial planning or have a sales background and are exploring a career move, life insurance sales is a great option. 

The challenges that novice life insurance brokers face are numerous. However, exploring life insurance careers with the right mindset and being aware of the different platforms available can significantly ease the burden.

What is Life Insurance?

While you may be anxious to see how much money you can make selling life insurance, it’s important to clarify what it is you’ll be selling in the first place.

Life insurance is a contract between a person and an insurance company. The nature of the contract states that the insurance company will pay your beneficiary or beneficiaries a predefined amount after the event of your death, as long as you are up-to-date on your monthly payments.

Your recipients are free to spend the funds on anything they like. Whether they need it to pay down bills or debt, pay a mortgage, or put a child through college — how they use the funds is up to their discretion. If you choose to sell life insurance, you’re providing a safety net that can help your client’s family stay in their house or give their child an education.

Types of Life Insurance Policies

The different forms of life insurance can be divided into two groups:

  • Term life insurance — a type of life insurance that expires after a set period. If the event of death doesn’t occur within the time mentioned in the policy, it will expire, and the beneficiaries will not get any benefits. When you start selling life insurance, this is the most common policy you’ll deal with.
  • Permanent life insurance — a policy that covers a person for the rest of their life and typically contains a cash value component that one may take or borrow against while still alive.

How Much Can You Make Selling Life Insurance? 

How much do life insurance agents make? As an agent, the type of policy you secure can have a direct impact on your commission.

Term Life Insurance

Term life insurance is the most sought-after and the most economical form of life insurance, with 71 percent of purchasers choosing this type. This type of insurance offers coverage for a specified period, and the premium payments remain the same throughout the policy’s duration. The most common policy lengths are 10, 15, 20, 25, and 30 years.

A client’s family (or any prescribed beneficiary) can file a claim and receive the death benefit tax-free if the policyholder dies within the policy’s term.

When the policy’s term ends, the policyholder may be able to renew it in one-year increments, which is known as assured renewability. However, the rate of renewal will increase each year.

Permanent Life Insurance

Permanent life insurance offers coverage for the rest of the policyholder’s life. It costs more than term life insurance because it can endure for the entirety of their life and can be used as leverage.

Throughout the policy’s lifespan, the cash value component grows tax-deferred. It serves as the policy’s savings component. One of the benefits for a client to secure a permanent policy is that they can typically borrow against its cash value and make a withdrawal. They can obtain the insurance’s cash value less any surrender charges if they decide to cancel it.

Because the cash value of some plans might build up over time, make sure your client doesn’t expect to have access to a large sum of money all at once. Permanent life insurance comes in a multitude of forms:

  • Whole life insurance has a set death benefit and a cash value component that rises at a specified rate. Many whole life insurance plans generate dividends that may be used to lower premiums or to increase cash value.
  • Universal life insurance is extremely flexible, and within the confines of certain restrictions, your client may be able to change their premium payments and death benefit. A universal life insurance policy cash value can grow, depending on the policy type they’ve selected. For example, the cash value of an indexed universal life insurance policy will be linked to a financial instrument, in this case, an index, and will be impacted by the market. Policyholders can usually pick and control investment subaccounts in variable universal life insurance.
  • Burial insurance is a modest whole life policy with a low death value, often $5,000 to $25,000. Burial insurance is intended to cover the costs of the burial and last expenditures solely.
  • Survivorship life insurance, often known as “second to die life insurance,” covers two individuals, generally a married couple, under one policy. The survivorship policy pays out the death benefit to the remaining family once both spouses have died. Survivorship life insurance is typically purchased as part of a more comprehensive financial strategy to support a trust.
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How to Get into the Industry

Life insurance sales jobs are plentiful, and a life insurance agent’s salary can be lucrative. It’s a fantastic option for those who want to change fields or acquire a job after graduating from high school or college. 

Studying for the state licensure test, passing the exam, and beginning to sell life insurance takes only a few weeks or months. While having a college diploma is always a benefit, most life insurance companies don’t require it. Similarly, unlike many other finance-related jobs, there is no requirement for prior experience.

Education Requirements

First and foremost, being a life insurance agent is simple in terms of educational requirements. Beyond a high school graduation, there are no educational prerequisites. Some states require you to complete a licensure course and pass a test, although these are both straightforward with appropriate planning and studying.


To obtain a life insurance license, you must be at least 18 years old, and in certain jurisdictions, you must also get a joint life and health insurance license. 

Getting certified requires you to:

  • Complete any pre-licensing courses necessary by the state in which you wish to practice. The number of hours you’ll have to work and the fee will differ by state. Note that certain states do not need pre-licensing schooling, so verify any prerequisites with your state’s insurance organization before starting the procedure.
  • Pass the state’s life insurance or life and health insurance licensure test. 
  • Pass a background check. The procedure varies by state and may entail fingerprinting in some circumstances.
  • Pay a small fee. The cost of taking the test varies by state and ranges from $43 to $150. The charge is listed on the webpage for your state’s insurance licensing.  

The general subjects of the test and the passing scores are similar in all states. No matter where you take the test, passing it will require studying and commitment. As with any test you take, you increase your odds of passing the life insurance test if you understand the subject areas correctly.

The life insurance test evaluates you in various ways, with each area carrying a varying weight. You will be evaluated on the following life insurance topics:

  • General knowledge concerning life insurance
  • The different types of policies 
  • Options in life insurance coverage
  • Tax information related to life insurance
  • Annuities and relevant tax policies

If you’re taking a combined exam, you’ll also be tested on health insurance. Most applicants devote 35 to 40 hours to studying for the life insurance test since, in all states, a 70% passing score is required.

Once this has been accomplished, you’ll be ready to start selling life insurance.

Tips for Passing the Life Insurance Exam

To improve your odds of passing the exam, follow these steps:

  • Get the exam overview and learn about the criteria in your state. Check the standards and guidelines with the department of insurance in your state (or the state where you’ll be working).
  • Make and stick to a study schedule. It is not advisable to cram for the life insurance test or any test that can affect your future. Instead, make a realistic schedule that spreads out your study time across several weeks and is simple to follow. 
  • Preparation and practice are essential. You can prepare by taking review classes and reading. You should, however, take practice examinations. These will assist you with determining how effectively you’re grasping the subject and what areas need to be addressed further.
  • Understand the procedure at the exam center. Before the exam, find out which types of identification are required to avoid any mishaps on the day of your exam.
  • Stay relaxed when taking the exam. A common error test-takers make is rushing through the questions and not clearly reading them or taking the time to think them through. If you feel stuck on a question, don’t panic. Go on to the next one and come back to it later.
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How to Sell Life Insurance

Life insurance agents have the advantage of operating on a schedule that isn’t based on the usual 9-to-5 weekday. A profession in life insurance sales gives you the flexibility to schedule appointments on weekends and/or nights. 

This timetable can fit not just client availability but also yours. You can book personal appointments, participate in events, and perform errands when it’s convenient for you. Your customers will also benefit by being able to book an appointment outside regular working hours so they won’t be required to take time off from work to speak with you.

However, it’s important to keep in mind that selling life insurance is difficult compared to most other products and services. The availability of an alluring product that the buyer can see, touch, and smell adds a tactile dimension to the sales process, making the salesperson’s work much more straightforward and frequently leads to the client making an impulse buy. 

Life insurance, on the other hand, does not provide immediate satisfaction. Even when the policy pays out, the best you can hope for is that the client’s family feels some financial relief.

Getting your prospect to realize and talk about the possibility that they will die is a difficult first step. When you get beyond that initial stumbling block, your next objective is to create a sense of urgency for the client to buy immediately.

On the plus side, selling life insurance has a few advantages that are hard to come across in other professions. For starters, life insurance sales positions are plentiful and easy to come by. Second, compared to other insurance sales such as health insurance, when selling life insurance, salary ranges can be quite high.


A typical life insurance sales call evaluates the client’s coverage requirements, presents sample life insurance prices, and provides the application. However, before you can do this, you need someone to call in the first place.

Finding people to pitch to means you need to learn how to generate leads. However, this is when things become challenging, and most agents encounter a snag in their careers. The most difficult task for new life insurance brokers is generating leads. 

Here are a few options to get you started:

  • Family and friends — Everyone is a part of a network. Begin by contacting them and informing them about your services. Often they’ll spread the word. This is a fantastic approach to generate some early revenue.
  • Work other people’s leads — Some companies buy leads in bulk and will let you call on them for a commission split. However, be aware the majority of lead vendors resell their leads 5-10 times. You’ll be up against numerous other agents to seal the deal right away. 
  • Get used to cold calls — This is a challenging approach for generating sales. It works best if you have a specific list of prospects who will be interested in your offer and if you maintain a genuinely helpful and friendly demeanor.
  • Create Your Own Leads — You may accomplish this by having your own website. With some SEO optimization of your site, you can start appearing in search engines when people are looking online for information on life insurance. This is a complex subject that will take a long time to master but can be well worth the time and effort. 

Getting Paid

Selling life insurance offers the highest commissions in the insurance sector, though rates vary depending on the type of policy offered. When you sell life insurance, you are paid a portion of the policy’s value, and then you are paid again when the policy is renewed.

Salary Information

On a life insurance policy transaction, the commission you earn is not restricted to the first year. Instead, you will continue to be paid as long as the policy is active. After the first year, your commission rate on a policy decreases, but you continue to earn 5% to 10% as long as the policyholder pays their monthly premium. This is the monthly passive income you make without having to do anything at all.

Most importantly, as a successful life insurance agent, you can expect to make a lot of money in the future. You get paid renewal commissions on a policy for as long as it is in effect, in addition to the instant profit received on selling it.

For example, a 40-year-old who lives to be 80 and maintains their complete life insurance policy earns you consistent commissions for the next 40 years. After the first year, your commission rate on a policy decreases, but you continue to make 5% to 10% as long as the policyholder pays their monthly premium. By securing enough clients, you’ll be inundated with passive income throughout your career.

Many life insurance brokers who have been in the industry for most of their working lives have accumulated enough renewal commissions to make a good living without ever selling a new policy.

Common Pay Structure

Agents are classified as independent contractors by the majority of life insurance firms. Classifying agents as such means that insurance firms don’t need to pay basic wages or provide perks. This implies that an agent can work a whole week but will not be paid if no sales are recorded.

The benefit of not being categorized as an employee is that you can create your own schedule, and a corporation or employer cannot force you to work certain hours. However, if you want to make a reasonable income in life insurance sales, you’ll need to put in a lot of hours, especially in the beginning.

A few firms offer employee status, which comes with a minimal basic wage and perks. However, these businesses impose strict financial targets on their agents. If you miss your monthly sales target more than once or twice, you may be fired.

How iLife Makes Selling Life Insurance Easier

Thanks to the tremendous impact of the digital revolution, selling life insurance no longer means visiting each client in person and manually inputting information for all of the paperwork. This is all due to the suite of tools available to the life insurance industry today.

When you start reaching out to prospects, you’ll need a CRM to keep track of who you’re talking to and what they’re saying. iLife can be your hub for keeping track of all conversations, scheduling follow-ups, sending emails, logging calls, and anything else you’ll need to be a successful life insurance agent.

iLife is dedicated to assisting financial professionals in increasing online income, lowering costs, and providing the fastest and most intuitive client experience possible.

Our platform allows you to have everything in one location, giving you the freedom to focus on expanding your career and business, all from one easy-to-use interface.

Contact iLife today to learn more about our life insurance sales platform.

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