|Insurance Buying Tips #1: Shop smart|
|When looking for insurance, your No. 1 priority should be to find adequate coverage. Price is important, but you’ll want to determine what kind of coverage you need first. Then you can fit that coverage into your budget and determine which carrier can provide you with the most comprehensive policy for your situation. You may be tempted to choose insurance with the lowest price tag, but if you don’t have enough coverage (or the right kind of coverage), you will see less financial benefit when it comes time to file a claim.|
|Insurance Buying Tips #2: Look for discounts|
|Once you evaluate your coverage needs, factor in your budget and find ways to save. Ask your insurance agent if there are any discounts on your coverage. Often, carriers offer discounts for things like paying your policy in full, staying auto accident-free or, if you’re in school, getting good grades. You also can save money by “bundling” multiple policies, such as purchasing a home and auto policy from the same carrier.|
|Insurance Buying Tips #3: Fill in the gaps|
|An average policy will cover the basics, but you may need to add extra coverage to meet your unique needs. For instance, you may have items like electronics or a nice piece of jewelry that would be financially difficult to replace, even with the assistance of your average renters or homeowners policy. You may want to add additional coverage for these items.|
You may not think it, but insurance is an industry well-suited to new small business entrepreneurs. Becoming an insurance agent is a key to a comfortable income in an industry that customers will always need, even in the deepest of recessions.
According to the Bureau of Labor Statistics, the median pay for an insurance agent is around $48,000, and jobs in the field are expected to grow by 10 percent over the next decade. Owners of insurance agencies can expect to earn even more.
That's not to say that there isn't risk involved in starting your own insurance agent business. Most small businesses fold within three years of establishment, and insurance companies are no exception. Taking the right early steps to becoming an insurance agent will improve your odds of succeeding in a promising, but competitive industry.
Your first step to becoming an insurance agent should be getting licensed. Insurance licensing requirements vary from state to state, but in most instances you'll need a property and casualty license, and a life, health, or variable annuity license if you intend to sell those products.
When starting your own company, initial financing is important. You can obtain a business loan from traditional lenders like banks, or find a business lender to help you get up and running. To improve your chances of getting a loan, be sure to have a well-written business plan detailing how you intend to run your business and how soon it will be profitable. Industry experts say that it takes about $20,000 in seed money to start an insurance agency. That money helps with initial office space, technology, and other related costs.
|Insurance Buying Tips #4: Purchase life insurance—you aren’t too young|
|Life insurance is essential, no matter how young or old you are. And for millennials, buying now may be a smart move because it’s cheaper to buy a life insurance policy when you’re young and healthy. This kind of insurance can help your family cover unexpected costs in your absence, including student loan debt or a mortgage, in addition to end-of-life costs. And if you have kids, a life insurance policy can also support their education or childcare expenses. Additionally, every millennial should consider long-term disability coverage, which helps you stay afloat financially if an accident happens and you become disabled and unable to work.|
|Insurance Buying Tips #5: Talk to an independent agent|
|An independent insurance agent is an essential resource when purchasing insurance—especially if this is your first time. An independent agent works with multiple different carriers, which is different from captive agents who can only sell insurance from the carrier they work for. Working with an independent agent can help make sure that you are getting the best coverage, for the best price. You’ll also benefit from independent agents’ insurance knowledge; they know how to talk you through your options and actually explain what each policy includes. An independent agent will make sure all of your assets are covered, help you find discounts or other ways to save, and be a valuable resource as your life changes and your insurance needs change, too.|
|Insurance Buying Tips #6: Only buy insurance to maintain your existing standard of living|
|You don’t need insurance for events that won’t severely strain your finances. Start with your basic needs (home, auto, business), then work your way to include other needs (cyber, liability). You can always obtain coverage later for something if you change your mind. You can minimize your risk and maximize your savings by buying insurance that won’t cause you to break the bank.|
After getting licensed, you'll need to think hard about what types of insurance you'll want to sell. Most agencies carry several types but specialize in one particular area. For example, a firm might specialize in auto insurance, but still carry life and home insurance.
A key decision insurance agency owners have to make is whether to own their own agency or buy a franchise. Buying a franchise will lend a new entrepreneur the cachet of an established brand and some professional support. The trade-off is that you will likely only be able to sell certain products and will have to meet other standards set by the franchise owner. Independent insurance agents set their own rules, but do not get the mentoring and support a franchise can provide.
Once you've received your licensed, obtained financing, set up an office, and decided what type of insurance you want to sell, you'll need to recruit customers. Identifying key markets and the products you'll want to sell them is something you'll need to do early on while you're creating your business plan.
By carefully planning your entry into the insurance market and mastering all the skills needed to become an insurance agent, you can start your career from a position of strength. Entrepreneurship is highly challenging, but it's also highly rewarding in terms of financial success and personal satisfaction.
|Insurance Buying Tips #7: Ask your insurance provider what the policy doesn’t cover|
|Every insurance policy has perils that are not covered by your policy. These perils are referred to as “exclusions”, and every policy has them. Ask your insurance provider to explain the exclusions in your policy to avoid discovering what they are once you incur damages or a loss.|
|Insurance Buying Tips #8: Consider bundling several policies with one insurance carrier|
|here may be value in bundling several policies with one insurance carrier. If you’re looking to insure multiple vehicles or obtain multiple types of business coverage (e.g., liability, property, cyber), then you may want to consider obtaining coverages under one insurance provider who carries multiple products, and who may be able to offer you multi-policy discounts or loyalty programs.|
|Insurance Buying Tips #9: Review your insurance needs on a yearly basis|
|As your needs evolve, so will your insurance policy. Maybe you’ve acquired a new vehicle since obtaining auto insurance for your primary vehicle, or started operating your business out of your home, or experienced a cyber-attack during the year… Whatever the change(s), you’ll want to make sure you’re covered for any new risk exposures. Talk to your insurance provider to stay on top of your insurance needs.|