Interested in a lucrative career? Want to be your boss and set your hours? Become an insurance broker. This article explains how to do it.
An insurance broker is a salesperson who is a seller of health, life and other types of insurance policies. In addition to this, insurance brokers sell annuities, securities, and mutual funds also. They do not charge the consumer. Instead, insurance brokers are paid when they get their commission directly from the insurance companies. Of note, being an insurance broker can be potentially lucrative. Becoming a broker is not easy; however, it can be done with some hard work and planning.
Education and State Rules For Becoming an Insurance Broker
To become an insurance broker, it is helpful first to earn a college degree. Getting a degree in business or economics is not an absolute requirement; however, majoring in business or economics could be helpful because those academic subjects give some exposure to business principles which could be beneficial in helping one to run an insurance business. Doing a college internship that involves working in an insurance office can also be helpful.
After getting a college degree, it is crucial to follow the steps given by whichever state that one wants to work in as an insurance broker. In some states, it is necessary to take coursework and pass written tests. In other states, a specific number of training hours might be required. Also, some states allow insurance broker courses to be taken online. In addition, some states have testing centres where an individual can go to the testing centre and be permitted to take the exam. In other states, the test might only get offered a few times during the year.
Definition of Insurance Broker and Type of License
In addition, one must understand the differences between insurance brokers and insurance agents. These two terms may seem similar; however, they are not. An insurance agent is a person who operates for a specific company while trying to sell the company’s insurance products. At the same time, an insurance broker is not necessarily limited to working for one insurance company. An insurance broker can sell insurance products from various insurance companies.
Also, it is vital to becoming aware of the particular types of insurance licenses that exist in the state that one wishes to work in. It is important because some states no longer offer the insurance broker’s license. Instead, they offer the insurance producer license. Having an insurance producer license enables a person to be a seller of insurance products whether they sell those products as an insurance broker or an insurance agent.
Costs for an Insurance Broker
Once one becomes an insurance broker, keep in mind that there will be extra costs. For instance, if one chooses to work independently, it is necessary to have a home office with a desk, computer, printer, and Internet access. Also, it will be essential to purchase errors and omissions insurance and pay dues for membership in professional insurance associations. It is frequently a good idea to have some money to support oneself for at least six months until commissions start to be paid.