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Apr 8, 2007 2:50 pm

I came across the following from a site geared
towards recruiters for the insurance industry (Apparently whether they
recruit talent or market products/services to insurance professionals).
Any thoughts specifically on the income and retention "statistics"?



LIFE INSURANCE SELLING...SURVIVAL REPORT


YOU CANT SELL LIFE INSURANCE BY MAGAZINE OR FAX, its still
basically one on one that works best. Life insurance selling is tough,
if you are a licensed life insurance agent in California, Florida,
Texas, or Maine, the facts the same, and making decent money is the
game.


This report is not meant to shock you, but to clear up some
misconceptions that most life and health insurance agents are living
out a life of apps and money. These are our personal calculated figures
being presented to you. Absolutely NO ONE, (outside of the IRS) knows
exactly what agents actually earn. We will try to be as accurate as
possible.


An income survey of insurance agents is without exception, entirely
worthless. The experienced and wealthy pros will understate their
earnings, while those in the lower income echelon might very well add
an extra zero to their figures. What is certain, is that there is a
broad spread between the proven professional insurance agent and the
rookie. Plentiful articles have wrongly stated how much income agents
obtain from their insurance sales efforts.


By analyzing thousands and thousands of agent records (over
750,000), we are able to calculate with some accuracy their income
levels. For you to agree with our findings you must accept our
assumptions... mainly that agents tend to live and work around their
personal geographic location. Based upon realms of census data, we put
a value figure of household income, plus home value to each and every
zip code in the United States. Overwhelmingly, the high majority of
insurance agents earn close to what their neighbors and counterparts
earn. Therefore with some reservations, we must assume an insurance
agent's net income will closely mirror that of others in their zip code
area.



OUR DEFINITION OF INCOME: Total household income, after business expenses, and before taxes.


WHY INCOME IS LOW Non-insurance outsiders, when asked how much an
insurance agent earns, would typically respond with an answer in the
range of $40,000 to $70,000. A highly regarded insurance trade magazine
reported a study determining the average agent obtained an income of
$50,000 a year. Dream on. Our intensive study shows that currently only
about 7% are at this level. Here's some understanding why: (1) There
are just too darn many licensed insurance agents hoping to become to
become professionals. (2) Recruiters are not initially selective enough
when bringing a new agent into the insurance career. (3) New agents
have no idea how much money that they will actually net, and how hard
it will be to survive the lst two crucial years.


MORE ON THIS SUBJECT For agents licensed under 18 months, they
collectively post an outrageous agent turnover rate of close to 85%,
stunning, but true. It might upset you enough to questiion the validity
of "expert" career agent recruiters writing articles and giving verbal
accounts of their strenuous and successful pre-qualifying process.
While we believe that SOME accounts are true, we feel these
exceptionally talented individuals are few and far between. After all,
was it not a former insurance recruiter who proclaimed, "If you throw
enough ___ (your word choice), against the ceiling, some will stick."
This lethal rate of turnover causes the average agent longevity to
amount to only 4.3 years of insurance experience. This figure has
hardly inched upward during the last 3 years.


TOO MANY AGENTS Yes, it is true that licensed records show over a
million life and health agents in the United States, possessing an
"active insurance license." Maybe we are too harsh in saying the
following. If half the agents (lowest income), were fired today, the
insurance industry would not be devastated. Currently the center median
income for licensed insurance agents is $31,700. The average income
pumps this up just a slight notch to $34,800. Fortunately this figure
is starting to increase, thanks primarily to Continuing Education
Requirements.


THE TOP 20% The top fifth of insurance agents average an income of
$18,700 higher than the average agent. This equates to $53,500, but
remember we are talking average here. Mixing a $200,000 insurance
superstar with 9 median income agents of $31,700 results in an average
of $51,700, yet note that only ONE agent actually earned that amount.
After 15 years of helping agent recruiters become more successful, it
is still amazing how much money is spent by the insurance companies and
recruiters chasing down the wannabees. Please don't preach the 80/20
rule to agents, unless you in turn follow it in your recruiting
efforts.


THE STARVING Nearly 280,000 agents earn less than $25,000 annually
selling life and health insurance. Furthermore, this income is actually
pumped up, as it includes tens of thousands of rookie agents who have
their incomes subsidized by career companies, and will leave the
business when they could no longer match the requirements for the
subsidy to continue. Ever wonder why insurance companies have thousands
of low cash value orphan policyholder "LEADS" to help when the rookie
desperately runs out of family and friends. Unfortunately these lead
minnows become the rookie's food instead of bait, as he was never
taught properly how to reel in the big ones.


THE AFFLUENT Only 3% of agents earn a net income exceeding $75,000!
And of these, very few reached the mark within their lst 5 years of
entering the insurance profession. For the hard working, ambitious, and
determined agent, here is our piece of advice. Don't follow the rules.
If you follow all the rules, you are guaranteed to evolve into the
average agent... starving on an income under $40,000. Dare to be
different, find your niche, then you will be proud to call yourself an
insurance professional.


FOR RECRUITERS ONLY Concentrate your time on proven, experienced
agents and quit trying to solicit the rookies. Sure rookies will reply
to your mailing, just like they will reply to all your competitors.
There are plenty of quality 3 to 10 year agents looking for an
opportunity to meet the challenge of you helping then earn a better
living. If you are looking for brokers, remember that 60% of agents
have no surplus business to give. Contact us, we will be glad to help
you target the "happy discontent" agents, especially those receptive
agents searching to better their career and their income.


---------------------------------------------------------- ----------------------------

Apr 8, 2007 6:43 pm

I would guess by people's attitude toward insurance that this is prety realistic.

Apr 8, 2007 7:00 pm

Location, location, location - I would like to add the overlay of location.  As with many selling related positions, it matters what area you operate in to a certain degree...

Apr 8, 2007 7:25 pm

I've been licensed to sell life insurance for over 7 years and I've only sold one policy. I made about $2,400.

Apr 8, 2007 7:50 pm

Right.  If they are lumping together ANYONE that is licensed, these stats are clearly misleading.  I would thinkg the majority of brokers and advisors are licensed. and do far less in insurance (if anything meaningful at all) than a full-time insurance broker. 

Apr 8, 2007 8:10 pm

Good point, B24. I wonder if they include VA sales in their reports.

Apr 8, 2007 8:13 pm

The following is from www.bls.gov


Apr 9, 2007 4:52 am

$60K sounds about right for full time experienced insurance agent. But it really depends on the business lines and target market.

The stats are really blown up by the number of continuing stock brokers with licenses, however given the 80% newbie failure rate in both industies, the total failure rate for licensed agents is very high.

1 Million licensed insruance agents implies that there is a licensed seller of insurance per 30 people. So this is a highly worked over area.


Apr 9, 2007 8:10 am
AllREIT:

$60K sounds about right for full time experienced insurance agent. But it really depends on the business lines and target market.

The stats are really blown up by the number of continuing stock brokers with licenses, however given the 80% newbie failure rate in both industies, the total failure rate for licensed agents is very high.

1 Million licensed insruance agents implies that there is a licensed seller of insurance per 30 people. So this is a highly worked over area.



I thought we had more than 30,000,000 people in the US.

Apr 9, 2007 8:26 am

I thought it was 370 Million, so let's call it 1 in 370.

Apr 9, 2007 10:30 am

Man... someone should tell the GPs at Jones to get on the stick with a better compensation plan.

Apr 9, 2007 2:36 pm

Selling individual insurance is a TOUGH way to go.  It is much harder, in my opinion, than selling investments.


If you were going to sell insurance, I'd say hold out a while and try to get a position with one of the high end commercial insurers, such as Marsh or Willis.  I personally know a couple guys (veterans) at Willis, and they pull down some MAJOR dollars selling group benes for mid to large corporations.


I just can't imagine making a living selling indv life, LTC and DI all day...I know it happens, but not for me.

Apr 11, 2007 12:36 pm

Starting Out - I understand that there is high
variability, what are some expectations for those starting out with
respect to how long it will take to get some sales of life, DI, LTC put
together? For example, from appointment until I had some closed sales
required XX amount of time and this is how the first XX months were...
I would classify my initial network and contacts as XX out of 1 to 10
for the following reasons: XXXXX, XXXXX, XXXXX.



TIA

Apr 13, 2007 11:34 pm

Most here focus on securities / investments, not insurance.  Since you are asking about starting out selling insurance, it doesn't look like you will get many answers here.  Sorry.