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Is Life Insurance a Good Career Path?

Is life insurance a good career path?

A career in life insurance can provide you with job security, high pay, a flexible schedule, and the opportunity to work for yourself as an independent insurance agent or a salaried company employee. However, life insurance jobs may also demand long hours and can have tedious work responsibilities. 

Is life insurance a good career path for you? In this guide, we cover:

How Much Do Insurance Agents Make?

The median annual pay for insurance sales agents was just under $50,000 per year in May 2021, according to the Bureau of Labor Statistics (BLS). This averages out to around $24 per hour.

However, some agents earn less than this, while others can earn much more. BLS data indicates the lowest 10% of insurance sales agents made only $29,970 in 2021, while the highest 10% earned more than $126,000. The average pay was $69,340.

“Typical pay, if you are an independent agent, will vary depending on the insurance carrier,” points out national independent life insurance agent Lisamarie Monaco. “Each has its own guidelines for agents.” But Monaco notes that when you’re an agent, you generally receive an advancement from the insurance carrier after the insured (your client) makes the first premium payment.

Pay in the life insurance industry also varies depending on the position, according to Linda Chavez, founder and CEO of Seniors Life Insurance Finder. “Sales jobs can be commission-based, which means that pay can vary significantly,” Chavez says. “Underwriters and claims processors typically earn salaries, which tend to be lower than in other industries. Customer service representatives typically earn hourly wages.”

Kelly Maxwell, CEO of online life insurance agency Seniors Mutual, adds that the typical pay for a new agent who makes commissions is 110% of the annual premium. 

“So if a client is paying $100/month, the agent can get $1,320,” Maxwell explains. “However, life insurance companies usually only give 75% of that right away, and the rest in months 10, 11, and 12.” He also stresses that life insurance agent salaries vary depending on the area of the country you live in, and if you’re a commission-based agent, you must factor in the cost of buying leads.  

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Types of Careers in Life Insurance

A career in life insurance can take different paths, with job titles that may include:

  • Life insurance agent
  • Underwriter
  • Case manager
  • Claims processer
  • Customer service representative

You can also either work for a life insurance agency or be an independent agent and entrepreneur. “Most jobs in life insurance are commission-based and are independent,” says Maxwell. “This means you are buying your own leads from a lead vendor or your upline, and working those leads and making a commission on sales.”  

Maxwell adds that while it’s possible to work for a salary at some companies as a license-only agent (LOA), this option is becoming increasingly rare. In this role, all commission goes to the company, and the company decides how much to pay the agent.  

>>MORE: What Is an Insurance Underwriter?

Entry-Level Life Insurance Jobs

The same types of roles typical of careers in life insurance are also possible entry points to the industry, including becoming a life insurance agent, underwriter, or case manager. You might also find an entry-level life insurance job in claims processing, customer service, or marketing. 

According to Maxwell, being a salaried LOA employed for a company works well for entry-level employees in this field. “This can be very good for new agents that need to learn,” Maxwell says.

“If you are new to the industry, sometimes it’s best to start out learning the business backward or from the backend,” Monaco says. “If you desire to be an independent agent and an entrepreneur, it is best to seek like-minded individuals and mentors to gain all the knowledge to help get you started.” 

Maxwell explains that life insurance is an easy industry to enter. “All you need to sell life insurance is your life insurance license in the state you want to work in,” he says. “Once you have that, there are literally hundreds of insurance agencies and large companies you can work for. They are always hiring in this industry. To get your life insurance license only takes a few weeks of studying and passing an exam. Then you can get your non-resident license in any state as well and sell there.” 

>>MORE: What Is an Actuary?

Life Insurance Job Outlook

The BLS projects that employment for insurance sales agents will increase by 6% from 2021 to 2031, which is about average growth. However, the Insurance Information Institute states that 106 million adults lack adequate life insurance coverage. And only 47% of households who don’t have life insurance would be financially secure if the primary wage earner passed away (vs. 68% of life insurance owners). 

This creates an opportunity for independent life insurance agents, who control 50% of the life insurance market, to begin a career that helps close the gap.

Pros and Cons of Life Insurance Careers

Wondering if life insurance is a good career path for you? Consider these pros and cons to help you decide.

Pros of Life Insurance Careers 

Job Security

One of the biggest advantages of a career in life insurance is the job security it offers. “Life insurance is an essential product for many people, and the demand for it is always likely to remain high,” says Chavez. “This means that there are always going to be opportunities for people who are willing to work in this industry.”

Potential for High Pay

Another benefit is the potential to earn a good living. Chavez notes that sales jobs, in particular, can be very lucrative, and the industry offers opportunities for commission-based pay. “This means that people who are successful in this career can earn a lot of money,” Chavez explains. Maxwell adds, “if you become good at it, you can make multiple six figures relatively easily.”  

Flexibility

Monaco explains that typically, insurance agents don’t sit at a desk all day long — which means the potential for greater flexibility. “Your schedule will likely involve meetings and appointments with clients to help them find the right plan,” Monaco says. “The beauty in this is that you get to choose your own schedule. If you want Mondays off, don’t schedule any appointments that day. Want to be done at 5 p.m. so you can spend time with your family? That’s totally up to you!”

Growth Potential

Maxwell says that, along with the potential to earn a six-figure salary as a life insurance agent, you can also easily grow a group of agents underneath you. “Insurance in general is very easy to grow an agency in.”

Cons of Life Insurance Careers 

Monotony

“One of the biggest disadvantages of a career in life insurance is that it can be very boring and repetitive,” says Chavez. “Many people find the work to be quite monotonous, and it can be difficult to advance in the industry.”

Long Hours

When working in life insurance, the hours can be quite long. “Because many policies are sold through businesses, agents often have to work evenings and weekends in order to make sales,” says Chavez. “This can make it difficult to maintain a healthy work-life balance.”

Income Instability

While a career in life insurance can be lucrative, it also has the potential to be financially unstable. “You won’t have a fixed income since it depends on the sales that you make,” Monoco points out. “Targets can also vary, so you’ll never be steady in terms of money.” As a result, it can be difficult to plan ahead financially because you may not know how much money you’ll be earning. 

Hard to Find Leads

Maxwell admits that while life insurance can be a rewarding career, it’s not for everyone and many people “fail out.” Among the cons of this career path, he lists that it’s very hard to find good leads unless you generate them yourself, particularly when you’re first starting. 

“There is a life insurance conference called ‘8% Nation’ because only 8% of agents renew their license in the first two years because they fail out,” Maxwell says. “Even myself, who owns an agency now, went into tens of thousands in debt in credit cards and personal loans when I first started out buying leads that didn’t work out.”

Chavez notes that it’s important to understand your own goals and preferences when trying to determine whether life insurance is the right career for you. “Some people may feel that life insurance is a good career path because it offers job security and the potential for good pay,” she says. “Others may feel that there are other careers that offer more opportunity for advancement or more interesting work.”

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