How to Sell Life Insurance: Expert Strategies for Success

How to Sell Life Insurance

Selling life insurance can be a rewarding career, offering the opportunity to make a positive impact on people’s lives by providing them with the protection and peace of mind they need. As a life insurance agent, your primary goal is to help individuals and families navigate the complexities of insurance products and select the most suitable policies for their unique situations. To succeed in this field, it’s essential to possess excellent interpersonal skills and a thorough understanding of the industry’s fundamentals.

To start selling life insurance, one must first obtain the necessary licensing and credentials. In the United States, this typically involves completing pre-licensing coursework and passing a state exam to become a licensed life and health insurance agent (The Brokerage Inc). Once licensed, an agent can begin building their client base and honing their sales skills. Some effective strategies for success include generating leads through referrals, networking, and marketing efforts, as well as mastering the art of cross-selling insurance products to existing clients (GoNectar) (Nationwide).

Understanding Life Insurance Policies

There are several types of life insurance policies to choose from, each offering different kinds of coverage and benefits. Understanding the basics of each type can help you in making an informed decision when considering selling your life insurance policy.

Term Life Insurance

Term life insurance provides coverage for a specific period or “term” (usually 10, 20, or 30 years). If the insured passes away within that term, the beneficiaries will receive the death benefit. However, if the insured outlives the term, the coverage simply ends and there is no cash value or payout. Some term policies are convertible into permanent life insurance, allowing for more flexibility.

  • Affordable premiums
  • Temporary coverage
  • No cash value

Whole Life Policy

Whole life insurance offers coverage for the insured’s entire life, as long as premiums are paid. Whole life policies come with a cash value component which accumulates over time and can be accessed through loans or withdrawals. The policy can also be surrendered for its cash value, making it a potentially valuable financial asset.

  • Lifetime coverage
  • Fixed premiums
  • Cash value accumulation

Universal Life Insurance

Universal life insurance is a flexible type of permanent life insurance. It combines a death benefit with an investment component, allowing policyholders to adjust premiums and the death benefit within certain limits. The cash value grows depending on the performance of the investment, and policyholders can access the accumulated cash value in various ways.

  • Flexible premiums and death benefits
  • Investment component
  • Potential for higher cash value growth

Permanent Life Insurance

Permanent life insurance is a broad category that includes whole life, universal life, and other variations. These policies provide lifelong coverage and a cash value component. The cash value grows over time and can be accessed or used to cover future premiums. When selling a permanent life insurance policy, the cash value can play a significant role in determining the policy’s overall value.

  • Lifetime coverage
  • Cash value accumulation
  • Potentially higher premiums than term life insurance

By understanding these different types of life insurance policies, you can better determine which one best suits your needs and make the right decision when considering selling your policy.

Becoming a Licensed Life Insurance Agent

Educational Requirements

To become a life insurance agent, you need to have at least a high school diploma or GED. There are no specific college degree requirements for this career. However, some professionals might choose to pursue a degree in finance, business, or a related field to develop a deeper understanding of the industry.

Licensing Requirements

In order to sell life insurance, you need to obtain an insurance license from the state where you plan to work. The process typically involves completing a pre-licensing course and passing the life insurance licensing exam. Pre-licensing courses are designed to provide you with relevant knowledge about insurance products, regulations, and sales techniques. The licensing exam usually consists of multiple-choice questions that test your understanding of life insurance concepts, policy types, and state regulations.

Each state has its own process for licensing insurance agents, so be sure to research the specific requirements for your state. After passing the exam, you can apply for an insurance license and begin selling life insurance policies.

Training and Support

Most insurance companies provide their agents with training and support to help them succeed in selling life insurance. This training may include on-the-job experience, mentoring, and professional development opportunities. Familiarizing yourself with available life insurance products, sales techniques, and state regulations will be crucial to your success as a life insurance agent.

It’s also important to build and maintain a professional network and seek out opportunities for continuous learning and development. Joining industry associations and attending conferences can help you stay informed about the latest trends and best practices in selling life insurance.

Generating Leads and Building Your Network


One of the most effective ways to generate leads in the life insurance business is through referrals. Referrals from existing clients are valuable, as they can introduce you to a warm market, with potential clients who trust their friends or family members’ recommendations. To encourage referrals, always provide excellent service to your current clients and consider creating a referral program that rewards clients for recommending your services.

It’s also essential to build professional relationships with other industry professionals, such as financial planners or estate lawyers, who can refer clients to you. These professionals can be a valuable source of leads due to their expertise in related fields.


Networking is crucial for life insurance agents looking to expand their client base. Local community involvement, such as attending business mixers, sponsoring local events, and joining community organizations, can help you build relationships with potential clients and create trust in your business. Additionally, make sure to leverage your personal network, including friends and family, who can refer potential clients to you.

Attending industry conferences and workshops is another excellent way to network with other professionals and learn about the latest trends in life insurance products, which can ultimately help you better serve your clients.

Using Technology

Taking advantage of technology is essential for generating leads in the modern marketplace. One strategy is to use digital marketing, such as search engine optimization (SEO) and social media to increase your online presence and reach potential clients searching for life insurance products. Create high-quality, informational, and engaging content that showcases your expertise in the field, driving more website traffic and, ultimately, leads. Online tools like Investopedia’s Best Ways to Find Life Insurance Leads and Digital Market Media’s Life Insurance Lead Generation Strategies can provide valuable insights into effective lead generation.

Another approach is to use customer relationship management (CRM) systems, which help organize and manage leads, clients, and sales prospects, making it easier to provide excellent customer service and manage follow-ups. Furthermore, automation tools, such as email marketing software, can simplify maintaining regular communication with potential clients, keeping your services top of mind.

By focusing on referrals, networking, and using technology, life insurance agents can effectively generate leads and build a strong network, crucial for success in this competitive industry.

Pitching and Selling Life Insurance Products

Understanding Your Client’s Needs

To effectively sell life insurance, start by understanding your client’s needs. Ask potential clients about their lifestyle, financial situation, and long-term objectives to get a clear picture of their insurance requirements. Building a relationship early on is essential in determining which policy best suits their needs.

  • Listen actively to their concerns and desires
  • Get to know their financial goals and family structure
  • Note any pre-existing conditions or high-risk situations

Tailoring Solutions

Once you have a clear understanding of your client’s needs, tailor solutions by offering the most suitable life insurance products. Explain how each plan complements their lifestyle and financial situation. Present different life insurance options, such as term and whole life policies, and emphasize their benefits.

  • Highlight the features that are most relevant to your client
  • Use clear language and avoid jargon when explaining policy options
  • Offer policy comparisons to demonstrate the value of different plans

Overcoming Objections

When pitching life insurance products, be prepared to face objections. Address potential client concerns and misconceptions about life insurance by providing accurate information and showcasing the advantages of your offerings.

Possible objections and rebuttals include:

Objection Rebuttal
I can’t afford it Explain the variety of plan options and their affordability in line with their financial situation
I have enough insurance Discuss the importance of reviewing and updating insurance coverage as lifestyle and financial circumstances change
I don’t see the need Emphasize the financial protection and peace of mind life insurance provides, as well as the potential for policy payout for their beneficiaries

Approach each sales pitch confidently, focusing on your client’s needs and offering tailored solutions. Demonstrate your expertise in life insurance and strive for a clear understanding of potential clients’ requirements, ultimately guiding them to make informed decisions about their life insurance coverage.

Compensation and Benefits of Selling Life Insurance

Life insurance sales agents often receive a mix of compensation structures that provide short-term and long-term income potential. In this section, we will discuss the various ways agents are typically compensated, including commissions, bonuses and incentives, and long-term income potential.


Commissions are the most common form of compensation for life insurance sales agents. They receive a percentage of the premium paid by policyholders for each policy they sell. Commissions usually have a tiered structure, meaning the more policies an agent sells, the higher their commission rate. This provides an incentive for agents to sell more policies, ultimately increasing their income. For example, an agent might earn a 50% commission on their first 10 policies sold in a month and a 60% commission on any policies sold after that.

Bonuses and Incentives

In addition to commissions, life insurance sales agents can also receive bonuses and incentives. These rewards can be based on meeting or exceeding performance goals, such as hitting a specific sales target or generating a certain number of leads in a given time period. Bonuses and incentives can be monetary or non-monetary, such as receiving a trip or other prizes. For example, an agent who sells 30 policies in a month might receive a bonus of $1,000 on top of their regular commissions.

Long-term Income Potential

Another significant benefit of selling life insurance is the opportunity to generate long-term income. Agents may continue to receive a residual commission or “renewal” commission for as long as the policy they have sold remains active. This means that even if an agent stops selling policies, they can still earn passive income from the previously sold policies. The percentage of the residual commission will usually decrease over time but provides a source of steady income for agents.

In conclusion, selling life insurance offers multiple compensation options that combine immediate, performance-driven earnings with long-term financial security. By understanding the various components of agent compensation, individuals can make an informed decision about pursuing a career in life insurance sales.

Challenges and Tips for Success in Selling Life Insurance

Dealing with Rejection

Rejection is a significant challenge faced by insurance agents, especially when they are new to the industry. It’s crucial to develop a strategy for dealing with rejection in order to be successful in selling life insurance. One approach is to view rejection as an opportunity to learn and improve your sales techniques. It’s essential to remain persistent and not let rejection discourage you from pursuing your goals in the insurance industry.

  • Use rejection as a learning opportunity
  • Remain persistent and motivated
  • Don’t take rejection personally

Staying Current with Industry Regulations

The insurance industry is constantly evolving, and staying up-to-date with the latest regulations is vital for success in selling life insurance. To become a successful life insurance agent, you need to learn the fundamental rules and regulations and attain a life insurance license. Staying current with industry regulations enables you to provide accurate and reliable information to your clients, ensuring their confidence in your services.

  • Subscribe to industry newsletters and attend training sessions
  • Regularly review state-specific licensing requirements
  • Continuously educate yourself about new regulations and products

Developing a Thick Skin

In the insurance industry, it’s crucial to develop a thick skin in order to effectively handle the challenges and pressure associated with selling life insurance. One way to do this is by adopting a strong work ethic, setting goals, and sticking to a busy schedule. Developing a business plan can help you identify the steps you need to take in order to achieve your work and productivity goals. Additionally, it’s essential to maintain a positive attitude and not let negativity affect your performance.

  • Embrace a strong work ethic and set clear goals
  • Develop a business plan and follow a schedule
  • Maintain a positive attitude and avoid negativity

Life Settlements and Alternatives to Surrendering a Life Insurance Policy

Life Settlement

A life settlement is the sale of a life insurance policy by the policy owner to a third party in exchange for cash. The seller typically receives more than the cash surrender value of the policy but less than the death benefit. This option is often considered by people who no longer need their life insurance policy or are unable to maintain the premium payments. Life settlement companies usually look for policies worth at least $100,000 covering people aged 65 years and older. The older you are and the higher your death benefit, the higher the offer you may receive.

However, it’s important to note that life settlements can have high transaction costs and unexpected consequences. It’s recommended to seek the advice of an accountant or tax expert when considering a life settlement. Learn more about how taxation of life settlement proceeds works.

Viatical Settlement

A viatical settlement is similar to a life settlement, but it specifically caters to those with a terminal illness or a significantly reduced life expectancy. In this case, the policy owner sells their life insurance policy to a third party for more than the cash surrender value but less than the death benefit. The primary difference between a life and viatical settlement is that a viatical settlement involves individuals with a proven life expectancy of less than two years.

Borrowing against Cash Value

Instead of surrendering a life insurance policy or opting for a life settlement, another alternative is to borrow against the cash value of the policy. This option allows policy owners to take a loan from the insurance company, using the cash value of their policy as collateral. The borrowed amount is usually tax-free, and repayment terms may be flexible.

Some other alternatives to consider may include:

  • Reducing the death benefit to lower premium payments
  • Converting the life insurance policy into long-term care insurance
  • Exchanging the policy for an annuity

It’s essential to weigh the pros and cons of each alternative carefully and seek professional advice when needed. Understand your options and determine the most suitable solution for your unique situation.

Types of Insurance Sales Roles

Independent Agent

An independent agent is a licensed professional who typically represents multiple insurance carriers. These agents are not tied to any specific insurance company, allowing them to search for the best policies and coverage options for their clients from a variety of carriers. Independent agents are often self-employed or work for small agencies and earn commissions from the products they sell.

Independent agents are responsible for:

  • Identifying potential clients and their insurance needs
  • Comparing policies and coverage from different carriers
  • Negotiating premiums and coverage on behalf of clients
  • Maintaining client relationships and providing ongoing service

Captive Agent

Captive agents, unlike independent agents, represent only one insurance carrier. They are employed by this carrier and are limited to selling the policies and products of their employing company. Captive agents often receive a base salary in addition to commissions, and/or bonuses based on their performance.

Captive agents are responsible for:

  • Understanding and promoting the products of their carrier
  • Building a customer base through networking and marketing
  • Assessing client insurance needs and recommending appropriate coverage options
  • Offering ongoing support to clients and updating their coverage as needed


Brokers are licensed professionals who act as intermediaries between insurance companies and clients. They function similarly to independent agents but with a primary focus on the client’s best interests. Brokers are legally required to act in the best interests of their clients, ensuring they get the most appropriate coverage at the best possible price.

Brokers are responsible for:

  • Working with multiple carriers to find the best policies
  • Evaluating client needs and matching them with suitable coverage options
  • Negotiating policy terms with insurance carriers on behalf of clients
  • Monitoring policy changes and staying informed about industry developments

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