The insurance industry is vast and always growing and changing. There are several fields of insurance, like renters, life, health, auto, homeowners, and more. This can make insurance an overwhelming and complex topic, but it is important to understand each type when selling insurance.
As an insurance agent, my responsibility is to educate and inform my clients on the options available to them. That is the primary role of anyone selling insurance, regardless of the kind of insurance it is.
In this article, we are going to focus the easiest to insurances to sell and discuss factors to consider when evaluating sales potential, and then each of the insurance types in depth.
Table of contents
The Easiest Insurances To Sell
When considering a career in the insurance industry, it’s important to understand the different types of insurance products available and their potential sales potential.
This table compares six different types of insurance products based on six key factors: market demand, competition, commission structure, ease of understandability, potential customer base, and value proposition.
By examining these factors, this table provides an overview of the potential strengths and weaknesses of each product, helping aspiring insurance agents make informed decisions about which types of products to sell.
| Insurance Product | Market Demand | Competition | Commission Structure | Ease of Understandability | Potential Customer Base | Overall Score |
|---|---|---|---|---|---|---|
| Life Insurance | 9 | 7 | 8 | 7 | Broad | 7.7 |
| Home Insurance | 8 | 6 | 7 | 7 | Broad | 7.0 |
| Car Insurance | 7 | 8 | 6 | 7 | Broad | 7.0 |
| Health Insurance | 8 | 6 | 7 | 6 | Broad | 6.8 |
| Disability Insurance | 6 | 5 | 9 | 6 | Narrow | 6.2 |
| Long-Term Care Insurance | 6 | 4 | 8 | 6 | Narrow | 6.0 |
The overall score for each insurance product is calculated by averaging the scores in each of the six categories (market demand, competition, commission structure, ease of understandability, potential customer base, and value proposition). These scores are subjective and based upon my individual perspective and experiences.
Factors To Consider When Evaluating Insurance Sales Potential
So you want to be an insurance agent, but you’re worried about failing? Don’t worry, a lot of new insurance agents struggle in their first year, but you can improve your chances of success by choosing the right type of insurance to sell.
It might help to consider what industries you have experience in when deciding what type of insurance to sell. There are some types of insurance that are known to be top sellers and can make you a lot of money, even if you’re new to the game.
As an insurance professional, I understand the excitement of a sale, but there are factors we need to consider to help us close the sale. Are there a lot of people who want to purchase what you are selling?
For instance, there are inherently more potential clients for auto insurance when compared to home insurance. Why? Because way more people own vehicles than those who own homes in the United States.
So before we jump into the different types of insurances to sell, and which is best to sell, here are a few things to consider!
Market Demand: If a certain type of insurance is in high demand, it may be easier to sell. For example, life insurance is a product that many people consider purchasing, making it a popular option among agents.
Competition: If there are many other insurance agents selling the same type of product, it may be harder to stand out and make sales. Auto insurance, for example, is a widely sold product, and competition can be fierce.
Commission Structure: Some types of insurance offer higher commission rates for agents, making them more attractive to sell. For example, whole life insurance policies tend to have higher commission rates than term life insurance policies.
Ease Of Understandability: Being able to explain the product to potential customers is a crucial factor. A product that is hard to explain or understand may be harder to sell, even if it is in high demand. For example, some types of health insurance, such as short-term health insurance, can be complex and difficult for customers to understand.
Potential Customer Base: The potential customer base is also a key factor to consider. Some types of insurance appeal to a broad range of customers, while others may have a more specific target market.
Value Proposition: The value proposition of the product plays a big role in its sales potential. A product that can demonstrate clear value to the customer is more likely to be sold than one that is harder to explain its benefits. For example, homeowners insurance can demonstrate its value by protecting a customer’s largest investment – their home.
Life Insurance
Life insurance is a type of insurance that can provide financial protection to your loved ones in the event of your death. It can be an easy-to-sell product, as many people consider purchasing life insurance to provide for their families in case of an unexpected loss.
There are different types of life insurance available, such as term life, whole life, and universal life.
Each type has its own advantages and disadvantages, and it’s important for agents to understand the features of each so they can offer the best option for the customer.
Term Life Insurance: A type of life insurance that provides coverage for a specific period of time, typically 10, 20, or 30 years. It is the most affordable and straightforward type of life insurance, making it easy to sell.
Whole Life Insurance: Also known as permanent life insurance, whole life insurance offers coverage for the entirety of the policyholder’s life. It also includes a savings component, known as cash value, which can accumulate over time. Whole life insurance tends to be more expensive than term life insurance, but it can be a good option for customers looking for long-term coverage and a savings component.
Universal Life Insurance is a type of permanent life insurance that offers both a death benefit and a cash value component. It also allows for more flexibility in premium payments and death benefit amounts, making it a good option for customers looking for more control over their coverage.
Final Expense Insurance
Final expense insurance is a type of whole life insurance and one of the most profitable types of insurance to sell. It is usually an easy sale as it doesn’t require too much underwriting and sales agents can earn an average income of over $100,000 per year, which is substantially more than regular life insurance agents.
While selling any type of life insurance can be complicated, final expense insurance is a relatively simple insurance type and a vital coverage type for many Americans over 65 who have less than $1,000 put aside for funeral expenses.
Health Insurance
As an insurance professional, I’d say most of my clients are looking for health insurance. This insurance helps cover medical expenses, and can be a complicated and confusing topic.
This means it can be harder to sell.
With the rising cost of healthcare, it’s becoming increasingly important for people to have health insurance coverage.
There are different types of health insurance available, such as individual health insurance, group health insurance, and government-funded programs. Each type has its own advantages and disadvantages, and it’s important for agents to understand the features of each so they can offer the best option for the customer.
- Individual Health Insurance: A policy purchased by an individual, rather than an employer. It can be a good option for self-employed individuals or those who don’t have access to employer-sponsored health insurance.
- Group Health Insurance: A policy purchased by an employer and offered to employees. It can be a good option for employees who have access to employer-sponsored health insurance. It tends to have lower premium costs than individual health insurance and can also offer more benefits.
- Government-Funded Programs: Medicaid and Medicare are options for individuals who meet certain income and eligibility requirements.
These programs can provide coverage for those who might not be able to afford private health insurance. When selling health insurance, it’s important to understand the customer’s needs and goals (which is important when selling any insurance).
Some customers may be looking for coverage that focuses on preventive care, while others may be looking for coverage that focuses on catastrophic illness.
Auto Insurance
This is the primary type of insurance that I sell. Car insurance a mandatory product in most states and is relatively easy to sell, as most people own a car and understand the importance of being insured while driving.
There are different types of auto insurance available, such as liability, collision, and comprehensive coverage.
- Liability Coverage is the most basic type of auto insurance and is required by most states. It provides coverage for damages or injuries that you cause to another person or their property in an accident.
- Collision Coverage is an optional type of auto insurance that provides coverage for damages to your own vehicle in the event of an accident. It can be a good option for customers whose car is financed or leased.
- Comprehensive Coverage is an optional type of auto insurance that provides coverage for damages caused by non-collision incidents such as theft, natural disasters, or vandalism. It can be a good option for customers who want to be fully protected.
Some customers may be looking for basic liability coverage, while others may be looking for more comprehensive coverage. That is part of the fact-finding aspect of helping people with insurance. Uncovering the client’s needs is paramount if you want to be a successful insurance agent.
Homeowners Insurance
Another type of insurance that, as an insurance agent I find easy to sell, is homeowners. It’s mandatory for people who have a mortgage on their home, which is what makes it easy to sell, and provide financial protection in case of loss or damage to their property.
There are different types of homeowners insurance available, such as standard, broad and special form. Each type has its own coverage limit and it’s important for agents to understand the features of each so they can offer the best option for the customer.
- Standard Form: Also known as basic form, provides coverage for common types of damage such as fire, wind, hail, and theft. It is the most common type of homeowners insurance.
- Broad Form: Also known as all-risk form, provides coverage for all types of damage except those specifically excluded in the policy. It is a more comprehensive option and can be a good option for customers who want more protection.
- Special Form: Also known as open perils form, provides coverage for all types of damage except those specifically excluded in the policy. It is the most comprehensive option and can be a good option for customers who want the most protection.
Commercial Insurance
Commercial insurance is a type of insurance that can earn agents higher earnings. However, it can be complex and requires a deep understanding of the products and the commercial operations that require insurance. New agents can invest time researching the market, but it may not be the best type of insurance to start selling right away.
One of the most enticing things about selling commercial insurance is that the commissions can be huge. How huge? Well, it’s not uncommon for a insurance policy to be above $100,000 in this space and commissions usually vary from 10-15% of annual premium (residual income) so you do the math!
And whileit is possible for new agents to begin selling commercial insurance, it is generally recommended that they start with personal insurance products first. This allows them to build their knowledge and experience, and gain a better understanding of the insurance industry as a whole. As they become more experienced, they can branch out into commercial insurance and other more complex products.
Frequently Asked Questions
Life insurance and final expense insurance are two types of insurance that can make the most money when sold. But the downside is that they do not offer residual revenue.
Auto insurance and home insurance are two types of insurance products that are best suited for selling online because they are widely used, and customers often prefer the convenience of buying online.
It can be hard to make a living selling insurance because it can take time to build a client base, and you need to have good communication and sales skills. Selling insurance is commission based which makes it even more difficult.
It is possible to become rich selling insurance if you are successful at building a large and loyal client base. This is especially true when selling insurance that produces residual income such as car insurance and home insurance.
Selling insurance can be stressful because it requires a lot of time, effort, and communication skills to build relationships with clients and make sales. The commission-only income puts added pressure onto an already difficult job.
Many insurance agents quit their jobs because they struggle to build a client base, meet sales quotas, or balance the demands of work with their personal lives.
Selling insurance is not easy because it requires a lot of hard work, persistence, and good communication and sales skills. But for those willing to put in the extra effort, it is a financially rewarding career.
One of the biggest challenges in selling insurance is that customers may not always understand the products they are buying, which can make it difficult to explain the value of the insurance and make sales.
Conclusion
As an insurance professional, I can tell you that a knowledge of insurance types and features is needed to be able to offer customers the best options. Life and health insurance can be challenging, but with proper knowledge, they can be easy to sell, unlike auto and home insurance which are easier due to their mandatory nature.
If you need some guidance on which niche within the insurance industry to focus on, then reach out to us. We’ve helped many insurance agents with their marketing and general guidance as they grew their book of business.
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