No Shelf Life: Why Selling Insurance May Be Right for You

They say that some people are born entrepreneurs. While this is certainly true, there are also lots of us who know we have the drive and skills to run our own business if we could just decide on the right product or service to offer.

If you've been searching for the perfect business for you, you've probably considered many factors such as time commitment, initial startup costs, and competition. You've likely also thought about the feasibility of your business idea: Are there enough consumers out there who would need that product or service?

Years ago, when I worked in the temporary staffing industry, I often thought about starting my own business. Owning a staffing agency didn't appeal to me though because humans are not so great as a commodity. People no-show to jobs or call out sick to work, which can strain the client relationships you worked so hard to build. That initial warm fuzzy feeling about helping people find work was quickly lost.

I wanted a product that was low-hassle.

I had been looking for the perfect fit for over a year when a friend invited me to a presentation from a health insurance organization that was seeking salespeople—an opportunity to open your own agency and become an insurance broker.  I attended the meeting and knew immediately that I had found what I was looking for.

Insurance is a great product for several reasons, and it might just be the right field for you. Let's look at some of the reasons why the insurance business is a great business to get started in these days.

Insurance products are not perishable

My hat is off to anyone who starts a food-based business. I cannot imagine the costs of fresh food or how much product must be thrown out each week because it's no longer edible.

Insurance policies, on the other hand, have no shelf life. They don't spoil or go rotten. You don't need any space to store your inventory either. You are selling an intangible—an idea, really—to people who want protection from some sort of risk. Ultimately an insurance company puts that idea onto a piece of paper called a policy, and you give it to your client to file away somewhere safe.

The insurance carrier makes money by managing risk. They bring an enormous number of policies and they profit when they spend less on claims than they bring in via premiums. As an agent or broker, you can carefully research which products you choose to offer in your portfolio. You can make your choices based on profitability and what I also called the sleep-easy factor. In other words, sell products you believe in, that you would buy yourself.

This was a top reason why I chose the insurance business.

Everyone needs insurance

Insurance is one of those products that will always be around. There are some types of insurance that are even required by law. For example, there are state laws that require you to have liability auto insurance. In many states, you can't renew your auto registration without it.

Under the Affordable Care Act, which now requires you to have qualified health insurance, many people buy coverage due to mandates or subsidies, so you have an opportunity to be really helpful to consumers. Insurance is confusing stuff, and being able to take a complicated product and break it down into layman's terms for someone is fulfilling and rewarding at the same time.

With health care legislation in the balance right now, there's a possibility that our nation might someday have single-payer insurance. Most of my colleagues feel that this would create huge opportunity within the industry. A program like that would likely be modeled after Medicare since that is already a form of national health insurance.

Medicare doesn't cover everything, so Medicare supplement products have become popular with Medicare beneficiaries. A single-payer system modeled after Medicare would increase the pool of people out there needing your help and guidance to put together the right package of personal insurance for their individual situation.

Even when insurance is not required by law, thousands of people choose to purchase coverage to protect their health, their families, and their property. Think about how many types of insurance you've owned in your lifetime. You'll always have lots of prospects out there who have interest in both your product and your guidance. The opportunity to help people is one of the best parts of this job.

You can start out part-time

Many people have a financial hurdle to overcome as they become entrepreneurs. It's difficult to just quit a full-time job and start your own business when you have bills to pay or a family to support. For this reason, it might make sense to start your business as a side-hustle and grow that income before you make the leap.

Fortunately, selling insurance is something you can do in your spare time. Many insurance agents write life or health insurance policies in the evenings or on weekends. It's completely up to you what days and times you schedule for presentations to your clients, most of which can be done by phone these days.

During my first two years building my health insurance agency, I still worked part-time as a recruiter, making job placements for restaurant managers. It was a carryover from my staffing days, and it kept my income stream alive while I slowly transitioned into selling insurance full-time.

The startup investment is minimal

Starting an insurance business requires only a minimal cash investment. Obtaining a license is relatively easy and doesn't cost much, depending on which line of insurance you decide to sell. In most states, you can sign up for a two or three-day prep course from a company like Kaplan Financial. This is a great fit if you learn well in person. Kaplan and other insurance-prep companies also offer self-study courses if you prefer to learn at home.

Your next step is to take your licensing exam at the provider contracted with your state. These are most often electronic exams taken on a computer. The exam takes an hour or two and results are usually immediately available. Many states may also require fingerprinting, which can often be done right at the facility where you take your exam.

Your total outlay for all this will be only a few hundred dollars. Once you are licensed, there are additional certifications that you can add if you want the ability to sell more products. For example, here in Texas, agents can take an eight hour certification course in order to be able to offer Medicare-related insurance products. These courses can be found both online or in a classroom format, and typically cost under $100.

You also don't need a business location to get started selling insurance. Hundreds of people out there start insurance agencies from their home offices every year. If you've got a cell phone, an email address, and access to the internet, you are in business.

Freedom from renting an office space can save you thousands of dollars during those early lean years. This money can be wisely spent on prospecting and growing your book of business.

Bootstrapping still works in the insurance industry

Perhaps some of the highest costs of any new business are marketing costs. There's no question that having money up front makes things easier when starting a business.

For example, here in the health insurance industry, you can buy internet leads from companies that specialize in these leads. You pay for a lead, and the leads vendor provides you information of someone who has requested help with insurance.

However, if you don't have the funds to buy leads, insurance is still one of those businesses that you can build with own hard work.

When I started out, I didn't have the money to buy leads, so I cold-called businesses and offered to quote their group health insurance. Consistent effort on this front led to multiple opportunities to quote these business policies when they came up for renewal.

Did I enjoy cold-calling? Not really, but I didn't have to do it for long. By 12 months into the business, I had enough cash flow to start buying leads and begin reducing the amount of time spent pounding the streets.

There are lots of warm prospects

As part of this bootstrapping, you can also start by selling insurance to people in your inner circle. Whether you are selling auto insurance, homeowners insurance, health, life, or some other form of insurance, there are people all around you every day who already own these products. If they are like most people, they shop those policies annually to try to find better rates.

Ask your friends and family for the opportunity to provide a rate quote. If your quote is competitive, you might be able to save your loved one some money while also gaining a sale for yourself. These people often become your best ambassadors, spreading the word that you're a whiz at reducing insurance premiums for whatever product line you sell.

Renewal commissions

Perhaps the very best feature about selling insurance is the renewals. If I'm selling sandwiches, then once I've sold a sandwich to a client and that client leaves my shop, I'm done with that sale. I now must figure out ways to get that client back into my store to sell him another sandwich.

With insurance, many policies pay you a renewing commission every month or every year. Each time your client makes a payment on his or her policy, you receive a commission check. This means your business is always growing. Eventually, you can get your renewal base to a level where you can work fewer hours because you have so many policies on your books that you no longer need to be selling full-time.

On the other hand, if you are money-motivated, you can go out there and sell new policies every week for the rest of your life. The potential for endless growth is always there, and it's completely up to you how far you take it.

Many insurance carriers will also advance you a year's worth of renewal commissions. This can be great working capital that you can use for marketing to create additional sales today.

People are buying insurance online

One of the things I love best about selling insurance is that I can be everywhere without any driving. My agency is licensed in 47 states, and we can take applications right over the phone.

It's also easy and affordable to put together a basic WordPress website so that your clients can find you and learn more about you. Websites build credibility and give your prospects another way to reach out to you. Include a simple contact form in your sidebar like the one you see here on our website so that your readers can request your help online from almost any page. You'll receive those leads instantly, and you can literally be talking to that prospect within seconds of their online inquiry.

Consumers love this. They buy so many things online these days, so why wouldn't they buy their health or life insurance the same way? The same goes for almost any kind of insurance line that you can think of.

Once you have quoted your prospective client and he or she is ready to buy, you'll simply log onto the insurance company's online portal, start a new online application, and take your client's information right over the phone. No driving halfway across the state for one sale. Everything you need is at your fingertips.

Venture capitalists are getting into the insurance game

All of this awesome technology has been getting some heavy attention from venture capitalists in recent years. This is a good sign of a healthy industry with lots of future potential.

With the advancement of technology, insurance agencies are easier than ever to start and operate. The days of paper rate books and driving many miles to sell a policy over a kitchen table are gone.

Today, we have access to amazing instant quoting platforms and easy apps for taking insurance applications online that eliminate paperwork. This kind of technology has gained the insurance industry some traction from venture capitalists in recent years. Modern Healthcare reported last year that health-insurer and insurance-tech startups alone raised more than $1.2 billion in venture funding in 2015.

There are also great technology advances on the back end of insurance policies, as reported by Insurance Thought Leadership in its recent article about top insurtech trends for 2017. Claims can now be automated by innovative software applications, which lowers administrative costs, making the insurance companies themselves more profitable and more attractive to investors, too.

As the insurance industry is finally making its way online, it's poised to be bigger than ever before. Consider getting in now on the fortune to be made as insurance sales goes digital. While you might initially pursue this career for the income, you'll soon find that getting the chance to help people sort out confusing insurance options and help them understand their choices is what makes you really love this career.