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Starting insurance career. P&C or Life & health?

what is p c insurance


I am thinking about a career in insurance and was trying to decide if I should go after the Commercial P&C business or the Personal life and Health. Which route as a general rule makes more money? I was told by one P&C Agency that new agents start out at 10% of the company gross commission. Is that typical? Do Life agents usually get more $$ on a per sale basis? Can anyone give me some real world advice?

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There is no reason you can't pursue both avenues, Steve. Understand, however, that P&C is far more complex than health insurance, which is more complex than life insurance. True "commerical" P&C premiums are in the thousands of dollars, so a 10% commission is still a nice check to deposit -- 10% of the total premium, that is. 10% of the agency's premium is a joke -- they get $1000, but you only get $100 for doing all the work? Take a walk on that one.

Beware, too, of any agency fee you will probably have to pay to a GA -- a desk fee or a commission split of 25% to the GA, or both is not unreasonable. But they'll rob you of some of your precious income until you have the experience or gumption to go independent. To be a successful P&C independent agent right out of the starting gate? Darn near impossible unless you already know the subject. Personal lines (auto, homeowner's, renter's) is an easier entry into P&C that you could even do independently as a new agent (but still very tough--lots of competition in most locales) and all pay renewal commissions for at least 1-3 years, if not for as long as the business stays on the books.

Starting your career with an insurer with name-recognition will help, but not guarantee, your success. You will still be responsible for finding and retaining your own clients -- "leads" are expensive and often unproductive. More appointments developed

on your own = more sales, regardless of the type of product.

Life insurance pays big initial commissions (up to 100% or more of first year premium) -- the main attraction to becoming a life agent for many -- but is unlikely to provide renewal commissions outside of the variable products (which also require securities licensing). Health insurance pays more modest premiums of 20%-25% of annual premium, but also pays 5%-10% renewal commissions for as long as the business stays on the books. With average annual premiums of about $6000 for a family of four, that $1500 in the first year, and as much as $600 in all other years.

Write just one new piece of health insurance business each month, and keep most of it on the books, and you'll have a huge residual income after just a few years. What would it look like if you were writing 10 new apps each month? That's a 6-figure income in new business commissions alone. Unless "Obamacare" kills the industry.

And considering all the types of insurance available for licensed agents to market, which one is on the tip of most people's tongues today? Health insurance. Become a specialist in that, and you'll do quite well. And you'll write more than a few life insurance apps along the way.

One last word of advice: if you live in one of the many states that now has divided life and health licensing into two separate licenses, get them both. Do not get just a life-only license or a health-only license. That would be short-sighted thinking. Add the P&C license as soon as possible, unless you want to start in that area. If so, add the L&H licenses ASAP. You never want to be out of position to help a client.

Best of all success to you!


CA-licensed Life & Disability Analyst. CA Insurance Lic #0596197. Also investigating insurance company abuses, and providing litigation support/expert witness services. Send me your questions, and I'll send you my answers.

Category: Insurance

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