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How to Become an Independent Insurance Agent • Blog Insurance Pro



Becoming an independent insurance agent requires little more than passing the license test to have an insurance license, but becoming a successful independent insurance agent requires much more. Independent insurance agents usually require a strong business plan to succeed and often capital to match fluctuating incomes.

Caught vs. Independent Insurance Agent

Many begin their careers in the insurance industry as captured agents. These are people who work for a certain insurance company and represent it during transactions. The captured agent generally has sales quotas and usually has to look after his company only after all the insurance solutions. If the company does not have a reasonable insurance product for a particular potential customer, the captured agent can sometimes look for products from other insurance companies and act as a broker to sell the external product to his new customer.

Captured agents often receive additional benefits in addition to the commissions paid for the insurance business they produce. This can look like having access to health insurance at a subsidized cost or receiving compensation for certain business costs such as rental or professional liability insurance.  Insurance agent who sells

Independent insurance agents alternatively do not work for a particular insurance company and do not represent any insurance company. Instead, they act as a broker between insurance companies and insurance buyers.

Independent agents generally do not have sales quotas with any specific company. However, some companies may require a certain level of sales sent annually to maintain a sales relationship with the independent agent.

Independent agents generally do not receive any benefits as captured agents. But independent agents often receive compensation for compensation for the insurance business they sell to a company. This comes as a bonus payment in addition to the insurance commissions to be paid to the independent agent. <! – ->

Reasons to become independent

Some capture agents transition from a career prisoner to an independent agent. Common motives for doing this are:

  • Freedom to sell products from several companies without quotas to fill
  • Additional compensation through emission rights
  • Fewer conformities for barriers to business

No quotas

Although they are independent agents do not have quotas, they often find it difficult to maintain strong business relationships with several life insurance companies. Each insurance company has its own unique systems when conducting and maintaining insurance business and it is very difficult to deal with several of these idiosyncrasies in a large number of companies. other companies sometimes. The good news is that the agent has no real concern about getting fired for not achieving a sales goal. But we should note the reality that most independent agents still act something like their captured counterparts when it comes to recommending a favored company.

Additional Compensation

One of the biggest inaccuracies likely to exist about independent agents is that they make more money selling insurance than captured agents. Although there is a streak of truth to this, and for some very high-producing independent agents there is an opportunity to exploit this truth, for most the compensation is about the same across the board. the additional compensation paid to an independent agent.

Compliance Roadblocks

There is no doubt that the established compliance of insurance companies can be a serious obstacle to conducting an insurance practice. Sometimes these obstacles are for good; other times they are major irritations with varying degrees of caution.

Independent agents can avoid many barriers to compliance because they do not work for any specific insurance company. There are indeed rules that they must follow, but insurers are much less concerned about how independent agents conduct their day-to-day operations because it has little effect or consequence for the insurance company.

Transition from Prisoner to Independence

For prisoners, there is no formal process for becoming independent per se. The captured agent terminates his / her employment contract with his / her employer and can then act as an independent agent if he / she wishes. Sometimes the termination of the contract is not decisive for the agent. <! – ->

But while the transition process is not necessarily formal, there is indeed a lot of planning recommended to the captured agent who wants to make this transition.

A currently recruited agent should strongly consider the benefits that come from the career insurance company. He / she should also strongly examine the impact of leaving a business and the process of transferring customers (if applicable) to his / her new practice. Some companies may make this transition extremely difficult, while others will get some if any obstacles.

Some, but definitely not all, agents will be able to continue selling. their previous career company products after transitioning to independent agent status. This means that they will mediate that business just like any company they produce once independent. But the agent must understand that he / she no longer works for the company and can no longer market himself / herself as a representative of the company. In addition, resources that agents have had free access to as a career agent may no longer be available to him / her as an independent agent.

For people who spent time as a capture agent, there is a good chance that they are familiar with several aspects of the business as usual when working as an insurance agent. This may include finding and purchasing professional liability insurance, being liable for withholding tax and filing / paying for insurance licenses. <! – ->

But there are potential aspects of being independent. insurance agent who is new to an internal agent. Many prisoners receive advanced commissions for insurance activities that are paid according to a different arrangement than annually (for example, monthly). This means that the insurance company assumes that it will receive the required premium payments and pays the insurance agent before they receive the actual premium payments. This is not a common payment option for independent agents – they instead receive a commission when the insurance owner pays the premium. to take an insurance license test and become an independent agent without working for any insurance company. This is a bold move that can prove extremely difficult. Although there are few barriers to preventing someone from doing so, it is possible for some insurance companies to refuse to appoint someone newly licensed without a professional background who sells insurance to sell their products – this is especially true in the home and car insurance industry

In addition If someone who starts selling insurance without previous experience is likely to lack some knowledge of industry standards that affect the day-to-day conduct of business. The inexperienced agents may not realize that he / she needs professional liability insurance and may not know where to start looking for it.

Starting independent can be very overwhelming, but for those who are overwhelmed, there is always the opportunity to find an internal arrangement with a company. <! – ->


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