Do you want to become an insurance agent? If yes then in this post I will show you in detail how you can sell insurance policy and earn money by becoming a representative of an insurance company. Whether you want to sell life insurance or general insurance, this post will help you do that.
Since I became a life insurance agent I gathered significant amount of knowledge pertaining to this business. Also, I got to know how important role insurance plays in our life. By becoming an insurance agent, you not only earn money but also do social work.
Whether you’re an employed person or unemployed you can become an insurance company’s representative and earn decent money.
How to become insurance agent?
Before I show you how to become life insurance agent or motor insurance agent in India, first of all, let’s discuss some frequently asked questions and answers. With the help of following QNA section, you can easily know whether you should get into this profession or not.
What does an insurance agent do?
An insurance agent is a person recognized by an insurance company who is trained enough to recommend a policy to a customer according to his needs. The job of an insurance agent is to go to the prospect and persuade him to take an insurance policy.
Upon selling a policy, agent gets commission on premium paid by the customer and gets a fixed percentage of commission as long as policy remains in force.
As you may already aware that insurance plays a very important role in our life like life insurance gives compensation to the family after the death of the insured person so his family can live its life easily. And likewise in case of auto insurance, insurer bears the financial burden and third party liabilities cost arising from a road accident.
How does an insurance agent make money?
When an insurance agent sells a policy, the insurance company pays him a commission ranging from 10% to 35% of the premium paid by the customer. Not only this, as long as policyholder continues the policy, agent gets certain percentage of the premiums as incentive.
Let’s understand it with an example.
Suppose you have sold an insurance policy that has a term of 15 years whose premium is ₹100000 and its commission is 30 percent. In this case, on first year premium, you will get ₹30000 as commission and on subsequent premiums, you will get a fixed commission set by insurer. If fixed incentives are 10 percent then every year, you will get ₹10000 rupees as incentives.
This way by selling only one policy, insurance agent can earn up to 1.7 lac rupees (first commission ₹30000 + subsequent incentives ₹10000×14 years).
Note: Above example is for only illustration. As discussed above commission varies from 10-35 percent.
Apart from that, insurers also offer international tours and the like benefits to agents who outperform to boost their spirit.
How much does an insurance agent make a year?
It depends on the ability of insurance agent. More polices an agent sells, more commission he gets. There are not limits.
Insurance agent does not get any salary, he gets paid when he sells a policy.
Some agents earn in millions, some thousands and some beyond the imagination.
It depends on the ability of the insurance agent. Just to recall, ‘the more policy he sells, the more commission he gets.’ He will continuously get his commission as long as the duration of the policy sold.
Two agents I’m aware of who outperformed as insurance agents are Mr. Parekh and Ravi Jethani. Both earn in crores every year by just selling insurance.
As per Life Insurance Council (LIC), insurance companies had disbursed ₹20823 crore in April-September 2019 as commission to their agents.
Anyone can become insurance agent in India. It does not require much qualification. You can become an agent if you acquire the following qualifications:
- In order to become an insurance agent, the candidate from rural area must have passed at least tenth standard and in case candidate is from urban area, he must have completed 12th.
- Candidate should be an Indian citizen.
- He/she must be 18 years or older.
See this is all you need to become life insurance agent or general. I think most of our readers fulfill this basic eligibility criteria.
Once company’s sales manager finds you suitable for the job, you will be given 50 hours or 75 hours training. Thereafter, you will need to pass IRDA exam and done. You will become insurance agent.
Benefits of becoming an insurance agent
- Live a flexible life, decide you working ours. You’re your own boss.
- For talkative people, this profession is a boon. You get opportunity to meet people more and more people.
- There are unlimited opportunities to earn money, earning depends on you and only you. More leads you will generate, more success you will get. In my opinion, if you open talk with 10 prospects then by an average you generate 3 sales for the company.
- Insurance company provides free holiday packages to agents who outshine.
- Growing agents are called for special dinners in 3 or 5 star hotels. And sometimes to spark their self-esteem insurer gives them expensive gifts for example car.
- You will only gather approbation but no decry. In short, you become your own boss.
- Those who are looking for a part-time job for additional income without stress levels, this profession is a best bet.
- This job will not take anything from you except your time. But if you could generate good amount of leads then it can become your passive income source.
Here are the steps you need to follow to become a representative of an insurance company
As mentioned in the beginning whether you want to become motor insurance agent, health or life, you will need to follow steps given below.
You cannot become an insurance agent on your own. First step in becoming an agent is choose an insurance company whose insurance products you want to sell.
After that you will have to take 25-75 hours of pre-licensing training provided by insurer and then pass IRDA exam. Insurance Regulatory and Development Authority of India that takes care of insurance sector in India therefore without its license no company or agent is allowed to sell policies.
The exam is not very tough but still according to IRDA guidelines you must pass it. So follow the steps given below to become insurance agent in India:
- First choose a company whose insurance products you would like to sell. Pick a company whose policies people of your area would like to buy. By becoming insurance agent of such a company, you will be able to sell policies effortlessly, because people will already have confidence in the company. You can become LIC agent, Star Health, Reliance, Max Bupa, or any other company’s. Here is a list of insurance companies in India.
- Now after selecting a company, you will need to go to the nearest office of the company and meet the Development Manager there. Tell the development manager that you would like to become an insurance advisor. Or you can visit insurer official website and fill out ‘Become Insurance Agent’ form. After filling up the form you will be contacted soon.
- The sales manager of the company will ask you some questions like why do you want to become an insurance agent, what is your qualification, and why do you want to sell our company’s products. It will be an interview in which the manager will try to ascertain whether you are eligible to become an insurance agent or not.
- If the company’s representative found that you can generate good sales for the company, he will enroll you in insurance agent training course. This training will be of 25 to 75 hours, which is mostly kept on Saturdays and Sundays.
- After completion of pre-licensing course, you will need to pass IC 38 or IC 33 IRDA exam (Insurance Regulatory and Development Authority of India). This exam ensures that candidate understands insurance business and can recommend a policy according to the needs of policyholder.
- After passing the exam, the insurance company will issue you a license and identity card.
- Congratulations! Now you have become insurance agent and ready to sell insurance products offered by the company.
Questions and answers asked in the context of Insurance Agent Examination by IRDAI
How can I register for IRDA exam?
Candidates cannot register for IRDA exam on their own. They will need to approach an insurer whose agent they would like to become and then insurer will apply for the exam on their behalf.
Is IRDA exam tough?
Not at all. You will be asked questions on the basis of your training provided by the insurer and insurance business. If you understand how insurance works then it will not be that tough for you.
Most of the candidates pass this exam easily.
Can I sell life and general insurance products like health and auto insurance, and the like simultaneously?
You can do this. But for this purpose, you will need a Composite license. Generally, when you visit an insurer to become an agent, he issues you life insurance agent or general insurance agent license.
If your company sells life and general insurance products then you can request your sales manager to provide you a composite license so you can sell both types of policies.
If you would like to become an insurance advisor, then try to get a composite license, if possible. There will be a little more training like 75 hours but it will be helpful. This will allow you sell life insurance and non-life insurance products such as auto insurance with a single license.
I hope now you know how to become insurance agent in India. If you still have some questions then feel free to ask in the given comment box. I am here to help you.