Work for Yourself or Someone Else? That Is the Question

employee vs. independent contractorWhen it comes to deciding whether to work as an employee or as an independent contractor in the insurance field, there are several points to keep in mind. The most important thing to ask yourself is whether you want your role to be full-time sales agent, who will move up to managerial positions later on, or if you want your role to be consultant/sales person who is in the field working with clients.

If you work as an employee, this usually means you are working with one major insurance company only, and focusing on the products they have, rather than products from a variety of companies. If you are full-time employee, you may be entitled to a number of benefits including a 401(k) retirement plan, health insurance or life insurance at a reduced rate, and other perks. You may also get a “base salary,” as opposed to working on commission only. You do not have to worry about taxes and other deductions, as most of the payroll and paperwork is done for you by your employer.

The downside to working as an employee is that you are tied to just that one company and cannot work for others. So, make sure you like who you’re working for and are willing to make a dedicated commitment to them.

If your status is an independent contractor, you are not limited to just one company. Your role is more like a consultant to your potential clients, since you are able to show them different rates and policies, and attempt to find them the best deal among all of the options. In addition, you may leave your current company at any time and go to another one. As a free agent, you can represent many companies at once.

The downside to being an independent contractor is that you have to keep up with all the accounting yourself, and be responsible for all of your earnings. You will have to pay your taxes on your own, since none will be taken out automatically. This means you will either have to be an efficient bookkeeper, or hire someone you trust to do this for you.

In addition, it can sometimes be confusing if you represent more than one company at once so it is important to be very careful. People may not know where your allegiance lies. One option is, as an independent contractor, you may represent only one company, making you an expert with that company and their policies, if you so choose.

Also, your own personal retirement plan, insurance plans, or other benefits have to be handled by you as these are not offered to independent contractors.

The choice to be an employee or an independent contractor is not an easy one. While there are advantages to both, you have to consider whether you want to work for one company as a full-time employee and dedicate all your time to them, or work as an agent for one or more companies, and be in business for yourself. The most important question to ask is how important it is for you to have the freedom of being an independent contractor. If you choose this option, you will have to make all your own money, and this is usually commission-based only. Employees usually make a base rate plus commission, based on performance. Think carefully about this choice. Either way, an insurance career can be rewarding and lucrative if you are dedicated and driven to succeed.

 

The Importance of Follow Up in Insurance Sales

Follow up is crucial in insurance sales.The old saying “service after the sale” is also true in the insurance world. As with any product or service, clients like to know you are aware they exist, even after you have made your commission from them, and that you are there to answer their questions.

Sometimes all that is needed is a quick phone call or email to see if there is anything they need. Doing this only takes a little of your time, and can be done on Fridays, at the end of the week, when you have done your paperwork on new sales, or at any other time you see fit. The important thing is that it is done at least once in awhile (perhaps every 3 months) to let the customer know you are still there for them.

Follow-ups can also include answering questions customers have asked, when you said you would get back to them. There is probably nothing that increases cancellation rates more than an agent who does not call back in answer to questions. My mother once called her annuity agent and accidentally woke his sleeping toddler. The agent’s wife was very rude to my mother, and the agent never called her back. My mother came very close to dropping the policy and would have, had she not had so much money already invested in it. I speak from personal experience on this issue. Follow-up and be courteous. It will cost you if you don’t.

Another type of follow-up might be helping the customer upgrade something on their policy, or sending them necessary paperwork. Don’t make the customer wait too long before you take care of these things for them. Do the required paperwork as soon as the policy is issued, so the customer gets a copy as soon as possible. Likewise, if for example a beneficiary changed, this is as important to the client as the policy itself, since it designates who the money will go to in the event of their death. Make sure this type of follow-up is done promptly and efficiently, and that you call to check they got their required documentation.

Finally, follow-up can also involve contacting people who formerly cancelled the policy, but who might be interested in coming back on. Perhaps their situation was a financial one, and now their economic situation has changed. You will never know until you ask. A simple five minute call to ask how they’re doing could increase your chances of winning back a sale. Learn to see former clients as your extra leads list.

Summary:

Following up with both former and current clients is necessary in an insurance sales career in order to maintain integrity, check on the status of things, and answer questions customers may have, which may keep them on the policy. If an agent takes an active role in getting in touch with the client on a regular basis, their credibility will increase, and former clients may even opt to come back. Whatever the result, you can rest assured you did the right thing and in insurance sales today, doing the right thing is job one.