Insurance Agent?! Should I?

Question

I have been in the learning stage of Real Estate Investing for awhile now. In my life I have not been able to pin point what I wanted to do with my life. I have tried many different avenues. At one point I wanted to see if truck driving was for me. I paid quite a bit of money to get my licence, and during my driving test it hit me hard that this not what I want to do. Now I have the fear of getting into anything because what if its not for me again.  Now that feeling is towards an opportunity that could get me closer to the real estate world.

In my area of Hallstead, PA there is a very young insurance agency that is looking for someone that is willing to get their licence and help build his growing business. He deals in collision, life, and PROPERTY insurance. He represents Farmers Insurance, and its only two years. Another plus to this is that he used to be a real estate agent in Baltimore. So he knows the RE world, and I think I can learn a lot from him.

But here is the catch for me: I don't anything about the insurance world. I have no idea if I'll like doing it or not. I would feel absolutely terrible if I waste his time to come out with a licence but hate the insurance game.

I'm hoping that there is at least one insurance agent on here that is also an Investor who reads this and has time to give me some advice or at least pick his brain.

Should I do it?

David Dachtera · Answer

What part of "... one of my group leaders ..." is ambiguous? (as opposed to "... my group ..." or "... my group leaders ...".

If there's a way to make that more specific, I'm open to suggestions ...

David Dachtera · Answer

Account Closed,

Looks like you fell into the usual trap.

First off, no one is talking about "millions in profits with no competition", I was talking about the accomplishments of a few exceptional performers, and those are annual earnings, not monthly or weekly. Typical performance is rather a good bit less, as it is in any kind of sales organization.

The reason we have no competition is because those who would otherwise be in competition with us are reluctant to change a business model they find quite lucrative, even though it earns them a less than desirable reputation. Greed typically trumps honor in business, as you can see even from the postings here these forums. We are the only organization of our kind to have an A+ rating with BBB without having paid for it (we are "non-accredited"). The others rank considerably lower - I guess that that makes our organization "an exceptional performer".

David Dachtera · Answer

Account Closed,

Just to clarify, many lines of insurance produce annual income from renewals.

The difference is that in insurance you're out there competing with all the other carriers.

The company to which I was referring has no competition: we're the only one of our kind in the industry.

Account Closed · Answer

@David Dachtera Not to beat a dead horse but Here is your exact quote. "In fact, one of my group leaders is approaching $1 Million a year in residual income."

Account Closed · Answer

@David Dachtera I suppose there is always a certain amount of competition. However, brokers that compete based on risk management and adding value through services have significantly less competition. In fact, my bosses largest five accounts have not shopped their insurance for over 20 years.

I can not argue with the fact that an industry with no competition definitely beats a career in insurance. While im skeptical there is a way to earn millions in profits without any competition I am sure that no industry remains that way for long and competition is right around the corner.

Account Closed · Answer

Direct marketing insurance companies like State Farm and Farmers rely very heavily on personal insurance. This area of insurance is pretty simple making it hard to add value through knowledge and structuring of programs. For that reason it is being threatened by new start up companies that allow consumers to compare multiple quotes at one time. I would look for a position focused on commercial insurance. It takes longer to win larger commercial clients than it does personal but has a much larger payoff in the end. Realistically it takes 3-5 years to gain the trust of these type of clients so be ready for a few years of living frugally.

Contrary to @David Dachtera comments commercial insurance clients produce annual residual income. Once you build a solid book you can live off commissions without the need to constantly produce new sales.  It is not uncommon for a good producer to make $1 million plus annually. Directors at my agency own their own book which they are able to sell upon retirement. Like @Brian Stone stated, it take years of rejection and you have to be able to look at this rejection as a learning experience and not a failure.

Ken T. · Answer

I have been doing insurance since I was 18, it's been 11 years. You have to be a people person and willing to learn every aspect of insurance to succeed. It can be extremely stressful but it is lucrative. You can meet lots of people and learn a lot about the financial world as well.

Watch the movie Yes Man and go experience life!

David Dachtera · Answer

@Brian Stone,

Been there, done that. It's just another commission-only direct sales position.

Of course, if that's your thing, I can point you to something RE-related which is VASTLY more lucrative. In fact, one of my group leaders is approaching $1 Million a year in residual income. A group member just had a $14K month. Another had a $100K month.

Food for thought ...

Jacob Passmore · Answer

@Brian Stone

I'm not sure anyone is going to be able to accurately answer this one for you. Sure there are things to look over, such as the arrangement with the agency. The contract terms etc. Is there a stipend for the first year, two, three? Do you pay back what the stipend was, and the list goes on and on. Are you good at keeping track? Those are all tangible things that the job requires..

To really evaluate how well you'll like it, its maybe a bit deeper..For me, insurance, Is about the intangibles. How well can you handle rejection? Do you get up and go to work, even when someone isn't forcing you? Can you get told NO 50 times in a row, and then have the guts to ask the 51'st?

It's definitely not an overnight success, but it can be a worthwhile endeavor. And as far as connecting you to real estate.. it depends on what your focus is, if you're attempting to write life insurance all day long, then probably not etc. I'll shoot over a colleague request, feel free to run anything by me.