Best Insight Into The Question, “What Is an Insurance Producer?”
TLTR: This blog explains what an insurance producer is and the responsibilities that come with the job. Furthermore, learn what steps you need to take to become one.
The insurance industry is a vast profession with many vital roles that help make it work. Some of these roles involve insurance agents, brokers, and producers. To the everyday person, these roles do not mean much. And people don’t concern themselves with the difference between these terms. After all, what customers need from the industry are insurance policies.
But, if you’re aiming for a career in the insurance industry, you will need to know the difference between the variety of roles present in this profession. Let’s explore what an insurance producer does.
In this blog
- What is An Insurance Producer?
- What Does an Insurance Producer Do?
- How Do Insurance Producers Differ from Insurance Brokers?
- Are Insurance Producers Similar to Insurance Agents?
- How to Become an Insurance Producer?
- Vital Skills for an Insurance Producer
- How Long Is an Insurance Producer’s License Valid?
- How Much Do Insurance Producers Earn?
- Is It Worth Becoming an Insurance Producer?
- In Conclusion,
- Frequently Asked Questions (FAQs)
What is An Insurance Producer?
Insurance producers are professionals in the industry that sell insurance policies. The state licenses them to sell property, commercial, life, health, and various lines of insurance from an insurance company.
Producers can specialize in selling one type of insurance or multiple lines. By doing so, producers can cover a larger net of customers and services. And, based on their skill and experience, they’re able to build their customer base and earn their living.
This description sounds all too similar to an insurance agent or a broker. Most people aren’t able to precisely distinguish between them. While the exact difference between an agent, broker, and producer may be hard to point out, understanding what each of them does can help consumers, and beginner insurance professionals identify their respective distinctions.
What Does an Insurance Producer Do?
As mentioned before, producers are licensed to sell insurance policies. Producers have the liberty to work with a single insurance company or multiple carriers. Since they sell policies, one of the prime duties of a producer is to act as a bridge between clients and an insurance company. In addition to that, here are some other responsibilities of an insurance producer:
- Finding new clients and businesses
- Defining insurance premiums
- Establishing proper payment methods
- Taking care of policy requirements
- Overseeing insurance claims
- Creating custom insurance plans as per client needs
- Handling policy renewals
- Conducting property inspection
- Risk analysis
- Maintain client records
Insurance producers are the first point of contact when a customer requires a policy, needs to file a claim, increases their coverage, or needs a policy renewal.
Note: Producers also need to nurture and maintain new and old client relationships.
How Do Insurance Producers Differ from Insurance Brokers?
Insurance producers represent insurance providers. In that context, insurance brokers represent the buyers and customers. Brokers primarily search for insurance products to sell to their clients. They consider the needs of their clients and search for insurance products that fit their needs.
Are Insurance Producers Similar to Insurance Agents?
Given the job responsibilities, insurance producers and insurance agents are the same. The term “agent” is prevalent among customers. At the same time, the word “producer” circulates more within the insurance industry. But, essentially, an insurance professional whom a client contacts for purchasing a policy or any insurance-related service is an insurance producer or an agent.
How to Become an Insurance Producer?
Many states require insurance producers to pass one or more licensing exams based on state regulations. This ensures that the person selling insurance policies knows what they’re doing. To know everything about insurance, memorizing insurance regulations isn’t feasible. Thus, insurance producer applicants usually opt for insurance training courses instead.
In short, to become an insurance producer, here are a few steps you need to follow:
Have the Minimum Education Requirements
The insurance industry requires applicants to have at least a high school diploma or a GED equivalent. Most entry-level insurance producer jobs do not require a bachelor’s degree or higher. However, if you have relevant higher education, you would potentially get a head start.
Decide On What Insurance Line You Want to Sell
You should figure out which line of insurance you want to sell as an insurance producer. As mentioned before, producers sell property, commercial, life, health, and various lines of insurance policies. You can either decide to sell a single type of policy and then move up to selling more as you move forward in your career. But having a definite goal in selling a specific policy can give you the focus you need.
Be Familiar with Pre-licensing Requirements
Every state requires aspiring producers to pass a licensing exam for them to be certified. The pre-requirements tend to vary by state. If you’re looking to become a producer, knowing what requirements you need to fulfill depending on your state would be next. You can find your state’s licensing requirements through the National Insurance Producer Registry (NIPR).
Also, you can enroll in specific courses that help you understand the insurance industry and the responsibilities of a producer. You can enroll in these through course providers such as AB Training Center, Kaplan Financial, and WebCE, to name a few. These courses are short and can be completed in a few weeks, depending on the hours you’re able to put into studying.
Take Your Licensing Exam
As you prepare for the license exam, it’s best to register and set your exam date. Once you have an exam date, you will have a goal to work towards and prepare accordingly. Make sure you register with your state’s designated exam provider. Don’t forget to get the right time and location for the exam. You don’t want to miss it after preparing for it.
Submit Your Documents to The Insurance Board
Once you’ve successfully passed the exam and received your results, your next step will be to send your documents to the state insurance board.
All states require applicants to submit their official documents for an assessment to check for their previous work history. Along with these documents, a state exam certificate, biometrics, a citizen affidavit, and a background report are also necessary.
The state insurance board will review and approve your license based on the documents you submit. Once you’ve acquired your license, you are legally allowed to work as an insurance producer.
Vital Skills for an Insurance Producer
Pursuing a career in insurance as a producer or an insurance agent, comes with many opportunities to learn. However, there are specific skills and habits you need to have or cultivate beforehand for this line of work. Such as:
You will be responsible for what you do with your time and the opportunities provided to you. While you may learn from an experienced supervisor, you have to put in the effort at the end of the day. You will constantly learn new things and take in additional tasks. So, it would be best if you learned how to manage your time effectively.
As a producer, you will interact with people constantly. You will communicate and relay information with them verbally or through written mediums. Whether it’s clients, other insurance professionals, you will need to communicate with them efficiently and effectively. With clear communication channels, you avoid any miscommunication and misunderstandings between the involved parties. Thus, having good communication skills is quite important.
The insurance industry utilizes technology significantly. As per Statista, the industry put in an estimated $14.5 billion investment in global insurtech companies. This means that insurance professionals have to work with relevant technology constantly. As an insurance producer, you need to be well versed or adaptable enough to use electronic devices and computer systems. Since technology is part of your daily bread and butter, having a tech-friendly approach and the willingness to learn is essential for any person wanting to become an insurance producer.
While you will get the chance to learn as you work, having a decent sales background can be helpful. But, even if you don’t, it doesn’t pose an issue. The main thing to realize is that you need to have the right mindset to learn insurance selling strategies. Insurance isn’t one of the easiest products to sell, and often people will decline your efforts. But it’s a learning process. Cultivate a mindset that makes you want to gain more sales experience with every opportunity you get.
Strong Will and Determination
Often you will hear many different versions of the word ‘No’ from clients. And that can leave you discouraged. Treat it as a learning experience and move on. At times, the people you reach out to will also feel irritated and speak to you negatively. Try to conduct yourself professionally and do not retaliate. It could reflect back to you in a bad way. You need to develop a thick-skinned personality while working as a producer.
How Long Is an Insurance Producer’s License Valid?
According to LawInfo, insurance licenses expire in the last day of the birth month of the licensed individual in the first year the license is issued. Individuals born in even or odd-numbered years renew their licenses on their birthday in the even and odd-numbered years, respectively.
Furthermore, producers will get a notification of their license’s renewal and its instructions 90 days before the expiration date. If you have confusion regarding renewal details, don’t hesitate to consult with your local insurance regulatory body.
How Much Do Insurance Producers Earn?
The vast majority of the producers earn from commissions. It is the most common form of income for experienced agents that work independently or with an insurance company.
According to ZipRecruiter, the average annual income of an insurance producer in the U.S. is $39,491. This equals $3,291 per month or $759 per week. Also, the top 90th percentile of producers has an annual income of $61,500 and more. At the same time, the 25th percentile earns around $25,000 annually.
Is It Worth Becoming an Insurance Producer
A career in the insurance industry can be both rewarding and exciting. The industry has a growing need for insurance professionals since customers have various requirements to be fulfilled. According to the Bureau of Labor Statistics, insurance jobs are to grow by 5% through 2029. This fact is a promising outlook for aspiring individuals looking for a career in the industry.
As a producer, you can work with many different lines of insurance. This flexibility brings variety in terms of work and interaction with people. While there are daily tasks of reaching out to new clients and following up with existing ones, the job isn’t as monotonous as it sounds. The requirements to get into this line of work isn’t high either. You can quickly start as long as you have a high school diploma and a willingness to learn.
Furthermore, insurance companies also provide their employees with flexible working hours, job perks, and diverse working cultures. Such features can help you in your professional and personal development as well. As long as you have the drive to excel in this line career, becoming an insurance producer is worth it.
Insurance producers are one of the essential positions in the insurance industry. They don’t stick to just selling. They have the opportunity to learn more about the industry and grow themselves as capable professionals in the industry. In addition to that, producers also cultivate the relationships they have with clients. This, in turn, helps the company grow.
As a producer, you will learn the necessary skills that will help you advance your professional career. However, your growth will ultimately depend on you. As long as you have the mindset to excel and do better, you will do well as an insurance producer.
Think you’re ready to take the next step towards becoming an insurance producer? As a producer, you’ll need to have a good flow of leads to help build your business. Our insurance directory will help you generate those leads for free! Check it out and add your listing today!
Frequently Asked Questions (FAQs)
Is Being an Insurance Producer Stressful?
New producers can expect a certain stress level from the job due to the new environment and responsibilities. However, as you get more experience and learn to manage your time, you can attain a work-life balance, making it less stressful.
How Long Does It Take to Become an Insurance Producer?
You can receive your insurance producer license in about 3-4 weeks after completing the licensing exam. However, the licensing requirements can change according to the state, so it is best to check with your local insurance governing body for precise details.
3 Simple Ways to Leverage Networking to Generate Leads for Insurance in 2021
How to Become an Independent Insurance Agent
A Cheat Sheet
Insurance Claim Process
Helping Clients is The Best Way to Retain Customers and Gain Referrals