A Hot Job for Hard Times: The Life-Insurance Agent

Team 9Nicholas Saunders, Michelle Nguyen, Garrick Robertson

Life Insurance Agents

Thousands are being added

Big companies planning to sign up more

Similar types of agents are switching (real-estate agents, mortgage brokers, bankers, lawyers)

Getting Started as an Agent

First years very difficult

Low Pay, almost all of it from commisions

Usually pay cut from former job

Lots of education

Many people after hired quit due to strain of job

All in All, it SUCKS!

WHY???

First, some background information

Background Information

1950’s- Life insurance agents common

Door to door selling

1980’s- families using proliferation of mutual funds and lower premiums

Less commission for agents

Continued Background

1990’s- whole life still hard to sell

Gets even harder to sell due to a scandal hitting the industry

Scandal

Term life- protects set time interval

Whole life- protects until death

Insurers pay interest on whole life, buyers can get back $$$

Expensive upgrades cheat buyers

Upgrades don’t cover cost of upgrades

Also

Lawsuits followed costing millions

Companies start requiring extra licensing from agents.

Forced agents to leave with policy

In Short

Scandal caused families to avoid whole life insurance

Life insurance agents get less commission

Companies employ less agents

Recovery of Whole Life

Didn’t have to worry about the Internet revolution that got rid of many agents for term life due to complexity

12% growth in whole life in 2009

Term life’s pitch “ Buy term and invest the difference.” became “lose the difference” when the stock market crashed helping whole life as well

What does that say about the Present?

Economic slump

Term life insurance less secure

Whole life requires more agents to form policies

More agents hired