Do you want to become an insurance agent? If yes then in this post I will be showing you how to become LIC agent or some other insurer's registered advisor. Basically, I will be explaining you how I became an Insurance agent in India. You can too get your license easily and sell insurance policy to generate extra or full time income.
Whether you want to sell life insurance or general insurance (health, motor or other), this post will show the eligibility criteria and process to become agent in an insurance company.
Since I became a life insurance agent, I gathered significant amount of knowledge pertaining to this business. Also, I got to know how important role insurance plays in our life. By becoming an insurance agent, you not only earn money but also do social work.
Whether you're an employed person or unemployed, you can become an insurance company's representative and earn decent money.
Before I show you how to become an insurance advisor in India, l strongly suggest to read frequently asked questions and answers section of this post. With the help of QNA section, you can easily know whether you should get into this profession or not.
How to become LIC agent?
Please note: This post in not limited to LIC insurance company, basically, by following the steps given in this post you can become any company's representative.
Here is the procedure to become an insurance agent in India:
- Education Qualification: You must have passed 12th or HSC.
- Age: You must be 18 years old, there is no upper age limit.
- Choose a company whose policies you would like to sell: Decide a company from IRDAI registered insurance companies whose products you would like to sell. Just in case, you would like to join as LIC agent, then you will be required to visit their nearest office and show your interest in becoming a registered person.
- Pass IRDAI IC38 Exam: Once company's sales manager sees potential in you then he will ask you to clear IRDAI insurance agent exam with minimum 40% marks (I scored 80% without any preparation so don't fear exam will be very easy). As per Insurance Regulatory and Development Authority of India (IRDAI), no one is allowed to sell insurance related products without having a valid license; which can only be obtained by passing IRDAI exam. So you have to pass this exam, there is no other way.
As mentioned in the frequently asked questions section below whether you want to become life insurance agent, health or motor, you will need to follow steps given above.
For your information, you cannot become an insurance agent on your own. First step in becoming an advisor is to choose an insurance company whose insurance products you would like to sell.
After that you will have to take 25-75 hours of IRDAI pre-licensing training provided by insurer and then pass IRDAI exam. Insurance Regulatory and Development Authority of India takes care of insurance sector in India therefore without its license no company or agent is allowed to sell policies.
The exam is not very tough but still according to IRDAI guidelines you must pass it. So follow the steps given below to become LIC agent:
- First choose a company whose insurance products you would like to sell. Pick a company whose policies people of your area would like to buy. By becoming insurance agent of such a company, you will be able to sell policies effortlessly, because people will already have confidence in the company. You can become LIC agent, Star Health, Reliance, Max Bupa, or any other company's. Here is a list of registered life insurance companies in India.
- Now after selecting a company, you will need to visit the nearest office of the company and meet the Development Manager there. Ask the development manager that how can I become an insurance agent. I am sure he will surely explain the process very enthusiastically because you would be the one who would bring more sales to the company. Or you can visit insurer official website and fill out LIC 'Become Insurance Agent' form. After filling up the form, you will be contacted soon.
- The sales manager of the company will ask you some questions like why do you want to become an insurance agent, what is your qualification, and why do you want to sell our company's products. It will be an interview in which the manager will try to ascertain whether you are eligible to become an advisor or not.
- If the company's representative finds that you can generate good sales for the company, he will enroll you in insurance agent training course. This training will be of 25 to 75 hours, which is mostly kept on Saturdays and Sundays.
- After completion of pre-licensing course, you will need to pass IC38 or IC33 IRDA exam (Insurance Regulatory and Development Authority of India). This exam ensures that candidate understands insurance business and can recommend a policy according to the needs of policyholder.
- After passing the exam, the insurance company will issue you a life insurance agent license and identity card.
- Congratulations! Now you have become insurance agent and ready to sell insurance products offered by the company.
What does an insurance agent do?
An insurance agent is a person recognized by an insurance company who is trained enough to recommend a policy to a customer according to his needs. The job of an insurance agent is to go to the prospect and persuade him to take an insurance policy.
Upon selling a policy, agent gets commission on premium paid by the customer and gets a fixed percentage of commission as long as policy remains in force.
As you may already aware that insurance plays a very important role in our life like life insurance gives compensation to the family after the death of the insured person so his family can live its life easily. And likewise in case of auto insurance, insurer bears the financial burden and third party liabilities cost arising from a road accident.
What is LIC agent salary?
It will be Zero. LIC or any other company will not be paying you any salary if you become their agent.
When an insurance agent sells a policy, the insurance company pays him a commission ranging from 10% to 35% of the premium paid by the customer. Not only this, as long as policyholder continues the policy, agent gets certain percentage of the premiums as incentive. This will be your earnings. Don't expect any type of LIC agent salary.
Let's understand it with an example.
Suppose you have sold an insurance policy that has a term of 15 years whose premium is ₹100000 per year and its commission is 30 percent. In this case, on first year premium, you will get ₹30000 as commission and on subsequent premiums, you will get a fixed commission set by insurer. If fixed incentives are 10 percent then every year, you will get ₹10000 rupees as incentives.
This way by selling only one policy, insurance agent can earn up to 1.7 lac rupees (first commission ₹30000 + subsequent incentives ₹10000×14 years).
Note: Above example is for only illustration. As discussed above commission varies from 10-35 percent.
Apart from that, insurers also offer international tours and the like benefits to agents who outperform to boost their spirit and encourage them to sell more policies.
How much does an insurance agent make a year?
It depends on the ability of insurance agent. More polices an agent sells, more commission he gets. There are not limits.
Insurance agent does not get any salary, he gets paid when he sells a policy.
Some agents earn in millions, some thousands and some beyond the imagination.
It depends on the ability of the insurance agent. Just to recall, 'the more policy he sells, the more commission he gets.' He will continuously get his commission as long as the duration of the policy sold.
Two agents I'm aware of who outperformed as insurance agents are Mr. Parekh and Ravi Jethani. Both earn in crores every year by just selling insurance.
As per Life Insurance Council (LIC), insurance companies had disbursed ₹20823 crore in April-September 2019 as commission to their agents.
Eligibility for LIC agent
Anyone can become an insurance agent in India. It does not require much qualification. You can become an agent if you acquire the following qualification:
- In order to become an agent in insurance company, the candidate from rural area must have passed at least tenth standard and in case candidate is from urban area, he must have completed 12th or HSC.
- Candidate should be an Indian citizen.
- He/she must be 18 years or older. There are no upper limits.
See, this is all you need to become life insurance agent or general. I think most of our readers fulfill this basic eligibility criteria.
Once company's sales manager finds you suitable for the job, you will be given 50 hours or 75 hours training. Thereafter, you will need to pass IRDAI exam and done.
Benefits of becoming LIC agent
- Live a flexible life, decide you working ours. You're your own boss.
- For talkative people, this profession is a boon. You get opportunity to meet people more and more people.
- There are unlimited opportunities to earn money, earning depends on you and only you. More leads you will generate, more success you will get. In my opinion, if you open talk with 10 prospects then by an average you generate 3 sales for the company.
- Insurance company provides free holiday packages to agents who outshine.
- Growing agents are called for special dinners in 3 or 5 star hotels. And sometimes to spark their self-esteem insurer gives them expensive gifts for example car.
- You will only gather approbation but no decry. In short, you become your own boss.
- Those who are looking for a part-time job for additional income without stress levels, this profession is a best bet.
- This job will not take anything from you except your time. But if you could generate good amount of leads then it can become your passive income source.
Questions and answers asked in the context of Insurance Agent Examination by IRDAI
How can I register for IRDA exam?
Candidates cannot register for IRDAI exam on their own. They will need to approach an insurer whose agent they would like to become and then insurer will apply for the exam on their behalf.
Is IRDAI exam tough?
Not at all. You will be asked questions on the basis of your training provided by the insurer and insurance business. If you understand how insurance works then it will not be that tough for you.
Most of the candidates pass this exam easily.
Can I sell life and general insurance products like health and auto insurance, and the like simultaneously?
You can do this. But for this purpose, you will need a Composite license. Generally, when you visit an insurer to become an agent, he issues you life insurance agent or general insurance agent license.
If your company sells life and general insurance products then you can request your sales manager to provide you a composite license so you can sell both types of policies.
If you would like to become an insurance advisor, then try to get a composite license, if possible. There will be a little more training like 75 hours but it will be helpful. This will allow you sell life insurance and non-life insurance products such as auto insurance with a single license.
I hope now you know how to become insurance agent in India. If you still have some questions then feel free to ask in the given comment box. I am here to help you.
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