Is Selling Life Insurance the Right Career For You?

Those who have a knack for selling life insurance – and the perseverance to grind through the tough early years – can make a lot of money and retire with a high degree of financial stability. However, the burnout rate for life insurance sales agents is high. More than 90% of new agents quit the business within the first year. The rate increases to greater than 95% when extended to five years.

Why Life Insurance Agents Quit

Several factors cause the majority of life insurance agents to leave the business. The most common is they simply cannot make a living. The vast majority of life insurance sales jobs are straight commission. That means no base salary – not even minimum wage – and no benefits. Employers get away with this by classifying their sales reps not as employees but as independent contractors. As such, putting in a full week’s work does not guarantee a full week’s pay, or any pay at all. You could work in excess of 40 hours, but if you do not make any sales, you get no paycheck that week.

Something else many agents cannot handle is the grind of the job. Finding prospects is difficult. A lot of insurance companies recruit new agents with the promise of abundant leads, but once they’re on the job, these agents find that the leads are nowhere near as plentiful as the company painted. Agents who are given leads by their employers almost always earn lower commissions in exchange. Company leads have a reputation for being difficult. When new agents quit, which is often in the life insurance business, their managers often redistribute the leads they were assigned to the next batch of new hires. By the time you get your first stack of company leads, they may have been called by a half-dozen ex-agents already.

Compared to most products and services, life insurance is a hard sell. Consider what happens when a prospect visits a car lot. First, he parks the old heap he desperately wants to replace. Next, after a cursory introduction from the salesperson, he climbs behind the wheel of a new car, takes in the new car smell, and admires all the gadgets and features his present vehicle does not have. He starts it up and drives it around the block, making mental notes of the quiet, comfortable ride and superb handling. All the while, the salesperson conducts psychological judo from the passenger seat, ensuring the prospect that for a low monthly payment, he can be done with his old car and upgrade to this superior driving experience in minutes.

Similar scenarios play out daily at timeshare resorts, boat dealerships and high-end electronics stores. The presence of an enticing product the customer can see, touch and smell makes the salesperson’s job much easier and often leads to an impulse purchase by the customer. Life insurance, by contrast, offers no such instant gratification. In fact, it provides no gratification or benefit whatsoever until the prospect is dead. As a result, creating urgency in a prospect’s mind is fraught with difficulty and requires a unique skill set from the sales agent.

Despite the challenges of selling life insurance, it is possible to build a successful career in the industry and make a lot of money. However, life insurance sales is not for everyone, as evidenced by the field’s high turnover rate. It takes a special type of person to succeed in this career. Life insurance is a career you should consider only if you have a certain group of traits.

Willingness to Take Risk

Relying on a life insurance sales job to make a living is, by its nature, risky. At most jobs, you are paid either an hourly wage or annual salary. You know the exact amount of your paycheck before you receive it and can budget accordingly. Life insurance sales, which is almost always strictly commission-based, offers no such guarantees. You could have a stellar week and make several thousand dollars, or you could work a full week and sell nothing, therefore making zero dollars.

Before considering a career selling life insurance, you have to be okay with a fluctuating paycheck and even the possibility of going a week or two without one. This job is not for anyone who needs to be guaranteed a full week’s pay for a full week’s work.

Thick Skin

Even the best salespeople in the world hear the word “no” much more than they hear “yes.” Rejection is a huge part of the job, and you must embrace it if you are to be successful. For a typical life insurance agent, a large part of prospecting involves cold calling, door knocking and calling leads that have already been contacted by other agents. Many of these leads hang up the phone or shut the door in your face before you can even begin your pitch. If rejection gets under your skin or wears you down, life insurance sales is not the right career for you.


As a successful life insurance agent, you can make a lot of money down the road. In addition to the immediate commission you earn from selling a policy, you get paid renewal commissions on that policy for as long as it is in force. A whole life policy purchased by a 30-year-old who lives to be 90 and keeps the policy his entire life pays you commissions for 60 years.

Many life insurance agents who have been in the business 20 years or more have enough renewal commissions built up to make an excellent living without ever having to sell a new policy. However, reaching this level takes years of tireless work. A first-year agent, by contrast, usually works a lot of hours for very little pay. A particularly bad or unlucky week in the field means an anemic or even nonexistent paycheck, despite the fact you may have worked 60 hours or more.

Life insurance agents, to be successful, must accept short-term pain in exchange for long-term gain. For those without the patience to do this, a different career is recommended.