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. It also outlines the steps you need to take to become one.
There are many vital work positions available within the insurance industry. They include insurance agents, brokers, adjusters, and more. Most people have no idea about the nature of these various job positions and they don’t need to. The only thing customers need from the industry are insurance policies.
But, if you’re aiming for a career in the insurance industry, you do need to understand the many careers that are available to you. In this article, we’re going to focus on one in particular: insurance producers.
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 who 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. The more lines they sell, the more potential customers producers can accumulate. Depending on their level of skill and experience, they should be able to expand their customer base and earn a decent living.
What Does an Insurance Producer Do?
Producers are licensed to sell insurance policies. They can 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. Some of their other responsibilities include:
- 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.
Much of this job description sounds similar to an insurance agent or a broker. While the exact differences between an agent, broker, and producer may be subtle, it’s important for beginning insurance professionals to understand them.
How Do Insurance Producers Differ from Insurance Brokers?
Insurance producers represent insurance providers while insurance brokers represent customers. Brokers primarily search for insurance products that will best suit the needs and interests of their clients.
Are Insurance Producers Similar to Insurance Agents?
In terms of job responsibilities, insurance producers and insurance agents are the same. The term “agent” is prevalent among customers, while the word “producer” is used mainly within the insurance industry. Basically, an insurance professional whom a client contacts for purchasing a policy or any insurance-related service is both an insurance producer and 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. Attempting to simply memorize insurance regulations probably isn’t the best way to learn everything about insurance. Insurance producer applicants usually opt for insurance training courses instead.
To become an insurance producer, here are a few steps you need to follow:
Have the Minimum Education Requirements
The insurance industry requires producer or agent applicants to have at least a high school diploma or a GED. 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 have 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. Producers can sell property, commercial, life, health, and various other lines of insurance. You could start by selling a single type of policy if you like, and then move on 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 requirements tend to vary by state. 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. Courses are available from such organizations 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 amount of time you’re able to put into studying.
Take Your Licensing Exam
As you prepare for the licensing exam, it’s best to register and set your exam date. Once you know when you’ll be taking the test, you’ll have a goal to work towards and can prepare accordingly. Make sure you register with your state’s designated exam provider. And double check to make sure you’ve got 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 of the applicant. As per FindLaw, these requirements differ according to the state you are in. But in general, the documents include a state exam certificate, biometrics, a citizen affidavit, and a background report.
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 on the job. But there are specific skills and habits you should cultivate beforehand. These include:
Taking The Initiative
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 on 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 writing. Whether it’s clients or other insurance professionals, you will need to communicate with them efficiently and effectively. With clear communication, you avoid misunderstandings that will only make your job harder than it has to be.
As with many other fields these days, the insurance industry is dependent on technology. As reported by Statista, the industry invested an estimated $14.5 billion in global insurtech companies in 2020. 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. 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 reject your efforts. But it’s a learning process. You should be eager to gain more sales experience with every opportunity you get.
Strong Will and Determination
Especially when you’re first starting out and are still developing your sales skills, you will hear many different versions of the word “no” from clients. You can’t let it discourage you. Treat it as a learning experience and move on. At times, the people you reach out to may be downright rude. Conduct yourself professionally and remain polite no matter what. You need to develop a thick-skinned personality while working as a producer.
How Long Is an Insurance Producer’s License Valid?
As explained in 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.
Producers will get a notification of their license’s renewal and its instructions 90 days before the expiration date. If you are confused regarding renewal details, don’t hesitate to consult with your local insurance regulatory body.
How Much Do Insurance Producers Earn?
The vast majority of producers earn from commissions. It’s 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. According to the Bureau of Labor Statistics, insurance jobs are to grow by 5% through 2029. This is good news if you’re 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 aren’t prohibitive, either. You can quickly start as long as you have a high school diploma or a GED and a willingness to learn.
Insurance companies usually provide their employees with flexible working hours, job perks, and diverse work cultures. Such features can be a real plus in your professional and personal life as well. As long as you have the drive to excel in this 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 as capable professionals. 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 in your career. However, your growth will ultimately depend on your level of ambition. 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 toward becoming an insurance producer? As a producer, you’ll need to have a good number 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 unfamiliar working environment and responsibilities. But as you become more experienced and learn to manage your time, you’ll gradually feel more at ease.
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. But the licensing requirements can change according to the state, so it’s best to check with your local insurance governing body for precise details.
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