Getting Into the Insurance Business – An Agent’s First Year

June 16, 2008

I was drawn into my career as a health insurance agent like the other 80% of new agents that are recruited by the major captive agencies. The following incentives made the position seem irresistible:

“Be your own boss”

“Own your own business”

“Set your own hours”

“No cold calling, all of our leads are waiting for you to call them”

“Unlimited income potential”

“Guaranteed residual income”

and my favorite:

“finally get paid what you are worth, the more you put into it, the more you will make”

So after 18 years of slaving away as a manager for a retail giant I quit my steady job making a very  comfortable living and stepped out into the unknown…

So I started my career as a health insurance agent with high hopes and great expectations.

Training

I took my pre-licensing class along with 12 other people who had been recruited by the same agency.  We had a really good teacher and 8 of us passed the state exam on first try.  2 others passed on their second try and the other 2 never passed and gave up.

We all went in for our first day of training together  expecting to go over the great products that the managers had been telling us about.  We went into the conference room and waited.  Shortly one of the managers came in and started handing out a call script to everyone and pointed to a large stack of paper sitting on the table at the front of the room.

“These are reprints, people who we never got into contact with.  Everyone get a few of these and go to the call room with your scripts.  You will have to make your first sales using these before we will give you new leads.”

One guy asked him “what about product training?”

“We will get to that later this week, the less you know now, the better you will do setting appointments, just follow the script and whatever you do, don’t quote over the phone.”

So we all went bewildered to the call room.

During that first week we all began awkwardly called these old leads using the call script.  We waded through numerous disconnects, hang-ups and the nemesis to all telemarketers: the answering machine\voice mailbox.  When we did get someone on the phone they usually had no idea who we were or why we were calling them. Two more of the agents I started with did not last the first week.

Most of the agents would leave around four or five in the evening but I was committed to have this work out for me, besides I had left a job where It was not unusual to work 12 to 14 hour shifts, and at least this was sitting down in a comfortable environment making calls, not unloading trucks in all types of weather, carrying heavy boxes to a sales floor, having to get all sorts of paperwork done on a deadline, and having someone always looking over my shoulder ready to jump on my case if something went wrong.

I started setting appointments during that time of day, and lots of them.  It seems as if most people that need insurance work during the day…

The next week the eight of us left did receive our health insurance product training.  It was brief and more of it was based on running quotes, appointment sales presentations, and  and tracking sales reports than the product itself.  We had to take simple online tests to qualify to sell the companies health insurance and if you failed you could retake them an hour later.  I decided to get one of all the product sales books that were given to customers so I could familiarize myself with all of the different health insurance products that this company offered.  I read through them cover to cover and go a good idea what benefits each plans had.  I also began to familiarize myself with the quote software, the leads management software and the underwriting guide.  I wanted to do this right.

I continued to call my leads and set appointments.  I ended up with 10 set that first week, way more than the other health agents I started with.  One had seven and the others had very few. I was ready to hit the road and make some good money.

So I set forth to travel the highways of my area to make my fortune:  It turned out to be a good lesson in the realities of being a health insurance agent…

My manager had offered to run my first several appointments with me but when I gave him my appointment schedule he told me his schedule was already filled up.  I understood because he had to write business himself and manage 12 other agents, four of which were new.

Here is how my first ten appointments went:

1.  The Pit Stop

Sounds like a gas station doesn’t it?  Well it turned out to be a real pit, it was an adult newsstand.  I told myself this guy needs health insurance too and went in.  I found the fellow sitting on one of three sofas aranged around a large plasma screen.  This guy had to have weighed 400+ pounds!  He had what looked like a grocery bag full of egg McMuffins and was cramming them whole into his mouth.  I knew there was no way to get this man approved through underwriting so I talked to him about a discount plan.  He was not interested, got upset with me, and threatend to call the state insurance comissioner on me!  I got out of there quickly and went to find somewhere to get a can of Lysol.  Needles to say I havent been able to eat an egg McMuffin since…

2.  Stood up

3.  Stood up

4.  Wanted real health insurance for $50 a month

5. Uninisurable by my company:  weight, HBP, Insulin dependent diabetes, rheumatoid arthritis

6. Uninsurable by my company:  currently pregnant

7.  Stood up

8.  Small business owner who could tell I really didnt know what I was talking about.  No sale.

9.  I showed up at this house and there were cars in the yard.  When I knocked on the door no one came so I called on my cell phone.  I heard the phone ringing in the house and a man picked up.  I told him who I was and that I was on his front porch.  He hung up on me and never came to the door.

10.  Finally my first sale.  Twenty something young woman, in perfect health, living with her parents and they were paying for her insurance.    I wrote her a policy for a $170 month premium.

When I calculated my advance I was at $250.  So for that week I had spent $100 in gas and made $250 in advances for a net profit of $150.  Pitiful but I was happy I had made my first sale…

I was regrouping from my first week of disappointing appointments but I was happy I had my first sale under my belt.  I now knew my manager would start giving me new leads to work on and my business would be humming right along.  Little did I know that all those people who were waiting on my call were being called by everyone and their brother…

In the space of two weeks the ten of us who started together had dwindled down to five.  Three more new health insurance agents had given up during the past week.  Only three of us had made sales the previous week, and one of those agents had been busy selling to his family members.(not that there is anything wrong with that, he happens to still be a good personal friend of mine:  more about him later.)

I focused on my mistakes of the previous week and came to the conclusion that the “one size fits all” call script that the manager had given me just was not working, and that not giving quotes over the phone was going to lead to a lot of appointments of people wanting real health insurance for $50 a month.  I also realized that I needed to know a little about a someones health so that I could look it up the underwriting guide and provide a suitable presentation beforehand.

Over the next several weeks I tried out several call scripts and quoting methods and here are some of the mistakes I made before having a call script that had it right:

1. Overqualified:  Set way to few appointments and left out people who could have really used a discount, rx, or accident plan even though their health condition would have caused them to be declined for health insurance.

2.  Gave one quote:  This gave any competitor that could quote the prospect a lower rate an advantage over me.

3.  Had me talking way to much instead of me listening to the prospect…

4.  Giving way too much information:  Prospects just started asking me to send information.

By the time I had put together a good way of making calls I was really getting worried.  I was still running plenty of appointments but had made only a handful of sales.  I was still only coming out ahead by $150 to $250 a week, and I knew I could do better working at McDonalds (or much better going back to my old job) but I had already put so much time and effort in so far I did not want to give up yet.  I knew there had to be some way to make more sales and get better leads…

I had now been a health insurance agent for one month and was having better results than I had started with, but I was going to have to start producing more business to pay my bills.  I noticed a group of several agents, all of which had been with the company less than a year, were making really good money and turning in many applications each week, yet they didn’t seem to be working very hard to do it.

They were always at the weekly sales meetings which took on the tone of a pep-rally and they were always near the top in the national news letter.  The head manager would cheer them on and pass out $100 dollar bills to them.  We attended a regional conference and two of those guys got up on stage with a company VP and walked off with a combined total of $7000 in cash.  I wanted to know how they did it because I wanted to be one of the ones getting big bucks the next time.

I just figured that because they were producing so well that they were being given the best leads.  They formed a pretty exclusive group and were kind of stand-offish and I could understand that because if everyone knew how they were getting the numbers they always seemed to hit, that would be cutting into all those good leads I figured they were getting.  They seemed to party pretty hard and still out produce agents who had been there for years and even the managers.  I had a couple of experienced agents (one who had been a manager and one who had been in the agency over five years) tell me not to get mixed up with them.

Initially I just figured that these older agents were disgruntled because they were not making the enormous sales that this group of newer agents were making, but something happened that made me start thinking differently about this group…

Two of the new agents that started with me began hanging out with this group of agents and immediately started producing an unreal amount of sales!  It seemed like they started closing every appointment they went to.  When I asked them what they were doing differently the became somewhat defensive.  this struck me as odd because until they started partying with this group, they were doing much worse than I was.  Something just did not seem right, but their miracle sales technique was about to come to light.

It all started with a personal beef between the agency manager and the ringleader of this group of agents.  He wanted a promotion and when he was told that he had to wait until he was with the company a little longer got very angry and started telling all the other agents that he was starting his own agency and was starting a lawsuit against my agency in order to be able to keep his commissions and book of business.  He was true to his word as his whole group (including the two agents who started with me) all left and started a lawsuit.

In return the company started looking at all the policies that had been issued to their customers and found some disturbing information:  all of the applications were missing social security numbers! Also all of the applicants were listed with no medications and in perfect health!

These agents were intentionally leaving off social security numbers on applications in order to circumvent the Rx database, and this in return was causing a quick issue of the policy instead of the underwriters requesting an attending physicians statement.  Most of their customers had no idea that this was what these agents were doing and the complaints started rolling in when they started using their coverage only to have it rescinded because of their past medical records.

The state department of insurance soon stepped in and these agents were in serious trouble…

This whole chain of events had several unexpected consequences that directly affected me and the other two agents that were still there that started with me…

I was now beginning to set better appointments and bring in more income but I still was barely clearing $350 a week after expenses.  My agency had also changed drastically over the past month and I did not realize how this would impact me as an agent…

I initally thought that the departure of the Pep-Rally Crooks would be very beneficial to me.  Some of those great leads that had been going their way would now surely start coming my way.  For a few weeks they did ,but then the supply started rapidly drying up.  Here is why:

When I joined this agency there were 98 other agents there.  Of those the 12 agents that were crooks were responsible for writing nearly one half of the agency’s business.  Shortly after their departure, many more agents left to avoid the controversy, and because the atmosphere changed from a fun and friendly place to work to a negative and guarded atmosphere.  In three months time the agency went from 98 agents to under 30.  Sales dropped by almost 75%.

With this drop in sales, the amount and quality of leads also dropped.  The agencies answer to this was a massive recruiting drive which brought in many new recruits but also served to strech the lead supply even thinner.  Even worse was that the same leads were being given to several agents at once which was a major headache.  Still, I was detemined to overcome this difficulty somehow…

My first reaction was to start buying my own leads from one of the major lead companies, but this was not a simple process.   Many other agents were also doing this, and part of the agreement they had with their lead company was to not sell leads to others in the same company, so I got turned down by several major health insurance lead companies.  I had to waste a lot of time searching for a lead company and I had no way of determining if they were reliable or not.  Other agents told me that a lot of the lead sites out there were supplied by affiliates and many times the affiliate site would have very little if anything to do with health insurance.

I did find a company that sounded good but knew the real story when on one of their first leads I received the response:

“I was just on the internet trying to get a free x-box and now all of these people are calling me…”

After blowing quite a bit of my hard earned money I did find a couple who were reliable enough, but this was getting expensive and had gotten back to the point where I was only coming out ahead by $250 a week.  I was getting more and more disappointed with the whole thing but I was also stubborn enough not to throw the towel in yet…

The two remaining agents that I started with both left during this time.  It was disheartening because we had become close through mutual struggle, but it was also understandable.  One had a recurrence of cancer to deal with, the other had his car stolen and it was a beater so it had very little value when the claim was paid.

I was the only one left after only four months and I was barely hanging on…

I had now been a health insurance agent for four months and was barely hanging on. I was spending the majority of my time calling leads but that was not cutting it. I had to figure out some effective ways of generating my own leads…

The next method I tried was the ugly pole signs you see tacked up everwhere. I figured that they would just get pulled up and thrown away but I had to give it a shot. I did not place any within city limits to avoid violating ordinances, but instead placed them at stop signs where rural roads met larger highways. My manager was nice enough to co-op for the signs so I only had to pay $50 for 50 signs.Right off the bat I started generating decent health leads from those few signs. It wasnt a huge quantity but 3 policies over the next two weeks was enough to make me happy.

The other form of advertising I tried were take-ones and tear tab fliers. I put these things everywhere, restaurants, grocery stores, gas stations, hair salons, libraries, anywhere I could think of. As far as health leads I generated by people picking them up and reading them, they were few and far between. What I did learn was, that when going into a business to ask them to place the ads, very often it would be a good conversation starter and led to several policies being sold.

After six months the rubber was finally meeting the road and I was now starting to come out ahead by $500 a week which was near my income before I became a health insurance agent. This was great but my home life was beginning to suffer. I was spending an inordinate time working and did not see much of my wife or 1 year old son. My lack of initial income and the unpredictability of commissioned sales were also causing her great concern. I needed to find a way to consolidate what I had learned into more productive time and I had to do it quickly!

My first thought was of running an ad in my local newspaper. It was very expensive but I settled on a small ad using a company template and ran it for two weeks. I did not recieve the first phone call. I had wasted a lot of money on this so I barely broke even for the next two weeks. I noticed that other agents had been putting little ads in Craigslist. I tried this and started getting a few leads from that.

Things were starting to come together after my first 8 months as a health insurance agent.  I was starting to write a decent number of policies, enough to clear over $500 weekly after expenses, but my home life was suffering as a result.  I needed to find a way to make the same production in less time….

I had found and tested many ways to generate health insurance leads, some worked well and others did not work at all.  I figured that I needed to work better on my time management.  I started making most of my calls several nights a week because this produced the best results for me.

A senior agent who also called a lot at night took notice of my hard work and determination and decided to take me under his wing.  He helped me get better with my calls and he also told me I could be “closing” more of my appointments.  I had always heard that word being tossed around and I figured it just meant making sales, or had something to do with being a crook, so I never paid it much mind.

This older agent helped me practice my presentation and told me the real meaning of closing:

“Closing is nothing more than showing someone that your point of veiw is to their benefit.”

He told me if I could accomplish that I could get more sales.  He taught me that the customer doesn’t care how great a company is,  how nice I am,  how low the price is, or even how good a plan sounds.  They wanted to know one thing only:  If I pay my hard earned money for this, what’s in it for me?  Answer that question and you had a sale.

We worked together for the next several months and allthough I was not increasing dramatically in sales I was spending a lot less time doing it.  We were clicking along just fine but things were about to drastically change…

The pressure within the once strong health insurance agency was starting to cause obvious fractures that were beginning to show.  Most of the more experienced health insurance agents had already left, trying to find a better agency and it was obvious even to the new recruits that this agency just was not the place to be…

Some of the managers were starting to have obvious financial difficulty and the health insurance leads they once readily provided became scarce.  The general manager started having stress related health problems.  One manager was terminated for violating company rules.  My manager told me he was shortly leaving to start his own independent agency.

The health insurance leads soon dried up and the agency was down to 12 writing health insurance agents.  Even though I had been doing fairly well with setting and closing appointments, I was now faced with the prospect of generating all of my health leads myself.  I knew that the main benefit of being a captive health insurance agent was that a captive agency provided health leads.  I started looking at the alternatives out there but was hesitant because I did not want to get burned.

Out of the blue my friend who had left the business for awhile to battle cancer called me.

He had started working as an Independent health agent.  Yes, he had to get his own health leads, but he was getting paid a much higher commission and advance.  The best thing was that his success as a health agent depended only on his efforts and not on the decisions of a manager.

It sounded good to me so I resigned from the captive health agency and started down the road to being an independent insurance agent…

Free at last!  I started down the path of being an independent health insurance agent with great enthusiasm and determination.  I was ready to be my own boss and I knew that the skills I had acquired would serve me well. Little did I know I was treading in more dangerous waters and this new sense of freedom and lack of structure had my new health insurance business going off course like a ship without a rudder…

I knew I would have to get busy generating new health insurance leads and dedicated quite a bit of my financial resources towards that end.  I also started signing contracts with every health insurance carrier that I could find.  I thought I was going in the right direction but when these two things combined, they caused a major roadblock for my business.

First, because I did not leave any money in reserve for health insurance marketing, I was now dependent on selling a good number of policies from the initial health insurance leads I would generate.

Second, because I contracted with so many companies, I had too many policies to learn and manage.  All of them had different quoting systems, underwriting requirements, and benefits.  Needless to say my appointments suffered because I ended up confusing my prospects or, even worse, being confused myself.

I tried to compensate by trying new methods of marketing such as direct mail, buying cheap telemarketing lists, and using networking groups to generate health insurance leads.

Direct mail worked but it took a lot of time for leads to trickle back in.  Telemarketing lists were cheap but very phone intensive to generate any health insurance leads at all.

Networking was slightly effective for a short while but as people moved in and out of the group it was difficult to maintain contacts so I gave it up.

I was making more on each health policy I sold but I was selling far fewer health policies.  It was also costing me much more to generate health insurance leads and I had nothing to fall back on…

I had started out to be an independent insurance agent and tripped over my own feet doing it.  I had gone from writing enough health policies to get by on a weekly basis to flat broke and unable to get going in just a matter of a few months.  I needed to find a specialty and get good at it fast…

My good friend who also got started as an independent health insurance agent was going through the same struggles as I was.  He started looking into the new Medicare Advantage plans that were coming into our area.  To us this looked like a good market to get into and it seemed a lot less complicated than all of the health insurance we had been selling, so we got licensed and contracted with medicare advantage plans and set off on a selling spree.

This went very well to start off with.  Seniors were fairly receptive to the extra benefits they could get through these plans and usually signed up with no problem.  We avoided signing up anyone who already had coverage of some type, such as tricare for life or a supplement they were happy with.  We had head horror stories of people being switched off of these and losing better coverage so we primarily focused on seniors that only had original medicare.  For three months sales were great!

During that three months I made more money than I ever had before in a three month time frame.  I paid off much of my debt, paid all of my utilities ahead, invested in more lead generation, and had more advances lined up to come in.  Then it happened…

Due to the actions of some unscrupulous health insurance agents, CMS stepped in and started adding all sorts of additional requirement for the medicare advantage insurance companies to follow.  One of these requirements was to have a much tougher confirmation call made to new enrollees.  I understand that this was done to protect the enrolled seniors from the many crooks, but the effect it had was to scare many of them away from it who really needed the extra benefits.

The effect it had on my health insurance business was that two thirds of the seniors that I enrolled during the fourth month I had been doing medicare advantage, received the new verification call, became scared, and declined enrollment.  I had massive charge backs on enrollments that had already been processed and all the ones in process were canceled out.  I did have a few to stay enrolled out of those I signed up that last month but I was devastated.

I had already invested heavily in health insurance lead generation for the senior market and now was certain that I did not want to write a policy that had a 60% chance of being charged back later.  I had made another business mistake, I had put all of my eggs in one basket.

This was the first and only time I seriously considered getting out of health insurance for good…  What alternative did I have?

Then a voice from the past called to me out of the blue…

Out of the blue the older agent I had worked with at the captive health insurance agency called me to see how I was doing.  I told him about my situation and how frustrated I was with selling health insurance.  He told me that the agency had crashed hard but now he was a manager and that they were rebuilding the agency, from the ground up, the right way…


Most of the former management had left including the head manager and my former manager.  Only two managers who had run smaller teams were left and one of them had assumed the position of head manager.  My old friend who called me had also moved up to a managers job.  Only three health agents remained from before.

They were slowly recruiting new agents one at a time and giving them quality training.  I was told that they would love for me to come back and help them train new agents along with writing new health insurace policies myself.

The whole agency had changed in a really positive way.  They had moved to a new smaller office space.  Gone was the large conference room and the pep-rally atmosphere.  Gone was the recruiting of new health insurance agents by giving them unrealistic expectations.  Gone wes the feeling you had to do anything possible just to write an application in order to get decent health insurance leads.

I decided to give it a second go and jumped in again headfirst.  Immediately I had access to good health insurance leads.  Combining those with the marketing techniques that I learned through trial and error, I started writing more health insurance policies than ever before in less time.

I was able to start training new health insurance agents so they could be successful and not face the struggles and obstacles I faced as a new agent.

We are doing well and I will be a manager before long…

I started thinking about all the other new health insurance agents out there, having to struggle, and many times failing badly. Was some way to indirectly help them by sharing my experiences?  I saw a commercial on TV that Dyson put out talking about how many times he failed before coming out with a great idea… If I could let new health insurance agents learn the right way to do business through my many failures and eventual success…

In helping new agents to succeed in the health insurance business I realized that it would be good for them to have a source of reference to look at to get ideas and develop better methods of doing business.  Many new agents do get initial training but are so overwhelmed by new information that they can not possibly retain all the information they are given to start off with.


I have been reading different insurance forums for awhile such as ampminsure to find out information on different health insurance topics.  This was a very good source of information but I also wanted to have a lot of good information all in one place for new health insurance agents.  I started out by publishing a small website but I had no real way of promoting it and the design part was very tedious and time consuming.  I started realizing that a blog would be the way to go.

I have been reading different insurance forums for awhile such as  to find out information on different health insurance topics.  This was a very good source of information but I also wanted to have a lot of good information all in one place for new health insurance agents.  I started out by publishing a small website but I had no real way of promoting it and the design part was very tedious and time consuming.  I started realizing that a blog would be the way to go.I have been reading different insurance forums for awhile such as  to find out information on different health insurance topics.  This was a very good source of information but I also wanted to have a lot of good information all in one place for new health insurance agents.  I started out by publishing a small website but I had no real way of promoting it and the design part was very tedious and time consuming.  I started realizing that a blog would be the way to go.

I then started researching ways to set up a blog and promote it.  The internet was full of ways to set up blogs and promote them, but a large percentage of what I found were site promoting the general theme of “become an overnight millionaire blogging on the internet.”  Being that that is not my purpose in doing a blog for new health agents, I started looking for real information on how to make this work.

I then started researching ways to set up a blog and promote it.  The internet was full of ways to set up blogs and promote them, but a large percentage of what I found were site promoting the general theme of “become an overnight millionaire blogging on the internet.”  Being that that is not my purpose in doing a blog for new health agents, I started looking for real information on how to make this work.I was looking for information on another health insurance subject and found InsuranceMaze’s insurance blogging blog, which provided me with all the answers on doing this that I needed.  This blog is a easy to understand, soup to nuts blog that gives you all the steps to start your own insurance blog.

So now I have started this blog to provide new health insurance agents with solid information on getting started the right way and will continue to post new articles weekly for your use.

  • Degl86

    thank u for this info ;)

  • http://www.martinworldwide.net/ telemarketing list

    interesting experience
    I think those telemarketing lists didn’t work for you as you paid them so cheaply, they were probably of very low quality.
    with those lists it’s mostly that you get what you pay for

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