E-Book Content
A CAREER IN
LIFE INSURANCE
Institute Research Number 40 ISBN 1-58511-040-X DOT Number 250.257-010 O*Net SOC Code 41-3021.00
A CAREER IN
LIFE INSURANCE SALES – ACTUARIES – UNDERWRITERS – CLAIMS HIGH EARNINGS STABLE PROFESSION WITHOUT GRADUATE SCHOOL “I DON’T WANT TO TELL YOU HOW MUCH INSURANCE I CARRY WITH THE
Prudential,” the comedian Jack Benny used to quip, “but all I can say is, when I go, they go too.” An obvious exaggeration for the sake of comedy. (Benny was also said to be such a cheapskate that when a mugger demanded, “Your money or your life!” he replied, “Wait, I’m thinking about it.”) Still, the wisecrack has an element of truth to it. Insurance is in the business of risk, and it can be a risky business. It is the collective job of the team of life insurance salespeople, underwriters, actuaries, and investigators to make sure that insurance companies are financially sound, that premiums are appropriately priced for each policyholder, that payments can be made to claimants without the whole outfit going bankrupt. (Premiums refer to the amount paid for an insurance policy, usually in installments.) Nobody wants to contemplate his or her own mortality. But the alternative is to risk the possibility of premature death that leaves dependents or loved ones unprovided for. Life insurance protects against financial loss in the midst of personal loss. It can guarantee that children are educated, a spouse can remain in the family home, or elderly parents will receive a retirement income. The simplest type of life insurance policy, and usually the cheapest, is term insurance, which provides protection for a specific 2
period of time (20 years, for instance, or until the policyholder turns 60). At the end of that period, if the policyholder wants to renew, the premium increases. If the policyholder dies within the period stipulated in the contract – the “term” – the named beneficiary receives the agreed-upon amount of money. A different type of policy, whole life insurance provides lifelong protection, and there is always a payout since the policyholder’s eventual death is inevitable. An annuity is another financial product issued by life insurers, and is designed to provide a steady allowance, for example, during retirement years. There are different types of term insurance and several versions of whole life insurance; there are tax-deferred and investment options; and endless add-ons and customizations can be made to any policy, but you don’t need to learn about them until you’re selling, pricing, writing, or investigating policies yourself. The life insurance industry is made up of insurers, or insurance carriers, large companies that invest the money accumulated from premium payments from policyholders so that it can pay out the claims to beneficiaries; and insurance agencies, which serve as the liaison between insurance carriers and customers. Some agents sell the insurance and financial products of just one insurance carrier; they are called captive agents. Others are independent agents who represent a number of different insurance providers. Independent agents can do research on behalf of their clients to get them the best value for their money and can put together a package with the policies and services that best meet clients’ needs. In addition to life insurance, such a package may include investments and securities. Agents are also increasingly qualified to offer financial planning services.
There are excellent career opportunities in the
trillion-dollar life insurance industry, requiring a diversity of skills and offering a variety of benefits and rewards, so keep reading!
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EXPLORING THIS CAREER BECAUSE THERE ARE SEVERAL DIFFERENT CAREER PATHS IN THE LIFE INSURANCE
industry, there are different ways to explore and prepare for a career in this fi