Thinking about becoming a health insurance broker? You may have heard or read that insurance sales can be a lucrative career and can offer both rewards and challenges. In this blog post, you’ll learn about the pros and cons of being an insurance broker. By the end, you’ll have a clearer picture of what it entails and if it’s the right path for you.
What Does a Health Insurance Broker Do?
Before jumping into the pros and cons, you might wonder, “What does a health insurance broker do?” A broker assists clients in finding the most suitable insurance policies to meet their needs. They compare plans, manage claims, and offer invaluable expertise. Unlike agents who represent a single company, brokers can provide options from multiple insurers. They must be state-licensed and earn commissions from insurance carriers. Here are the many reasons why people choose to be a broker:
What Skills Do Health Insurance Brokers Need?
Successful health insurance brokers combine industry knowledge with strong interpersonal skills. While licensing and product expertise are important, brokers also need excellent communication, customer service, and relationship-building abilities. Because much of the profession involves helping clients understand coverage options and making recommendations based on their needs, brokers must be able to explain complex insurance concepts in a clear and simple way.
Other valuable skills include:
- Sales and prospecting
- Networking and relationship management
- Time management and organization
- Problem-solving and critical thinking
- Attention to detail
- Knowledge of health insurance regulations and compliance requirements
Developing these skills can help brokers build trust with clients, increase retention rates, and grow their book of business over time.
How Long Does It Take to Become a Health Insurance Broker?
The timeline for becoming a health insurance broker varies by state, but most individuals can complete the process within a few weeks to several months. The process generally includes completing pre-licensing education requirements, passing the state licensing examination, submitting fingerprints and background checks when required, and obtaining appointments with insurance carriers.
Many new brokers choose to work with a General Agent (GA) to gain access to training, technology, carrier relationships, and ongoing support as they begin building their business.
Pros of Being A Health Insurance Broker
Starting a career as a health insurance broker presents numerous advantages, making it an appealing option for many. Is insurance sales a good career? Here are some benefits of becoming a health insurance broker or agent.
- You have a lot of flexibility and you work on your own
If you choose to become an independent broker (sometimes also called an agent), you will have a lot of freedom and flexibility to do your job. You can work from your home, when you want, or you can set up your own office and select your office hours. (That contrasts with an in-house role, where you work in someone else’s office and follow a schedule set by them.) One thing to remember is your sales success is driven largely by your own efforts, so you need to commit to prospecting, quoting, enrolling, and servicing your customers in order to keep business on the books, although affiliating with a General Agent (GA) could relieve you of some of these responsibilities.
2. You will be helping people protect their future
One of the most satisfying aspects of being an insurance broker is the feeling you get by helping others find the right Health Insurance plan at the right price. Your work can mean the difference between whether a client can get coverage and protect their future health and financial security. You have the opportunity to build a career while making a positive contribution to the lives of those you serve.
- You can earn a good income
Earnings vary by broker, and by region; however, the S. Bureau of Labor Statistics says insurance sales agents across all experience levels had an average mean wage in California of $77,700 in 2017. More impressive is the $111,790 average mean wage for the Oakland-Hayward-Berkeley, California, metropolitan area, a $99,020 average mean in the San Rafael, and a $103,580 average mean in the San Francisco/Redwood City/South San Francisco region. Don’t forget, too, that your retention of business can help you earn ongoing income for years from business written during your first years as a broker. Click to learn how much you can potentially make as an insurance broker.
- You can get support from a GA to make your role easier
Partnering with a GA can make a big difference in whether you’re able to focus your time on prospecting and selling versus performing insurance-related administrative tasks. Word & Brown has been a partner with brokers for more than 30 years. The organization’s value proposition is built around the idea that Word & Brown delivers more than great service; the company provides everything brokers need to be successful. Services include sales and quoting, enrollment and underwriting, broker (and employer) technology, one-stop account management for answers to all of your business-related questions, in-house compliance expertise, ongoing training and education, marketing support, and client extras (like COBRA, POP, and HR support). By working with Word & Brown, you’re able to hand-off some of your administrative functions and focus on sales.
- You have the potential for career growth
The insurance industry is vast and offers numerous opportunities for career advancement. As you gain experience and build a strong client base, you could move into more specialized areas of insurance, such as life or property and casualty insurance, or even take on a managerial or executive role. The skills you develop as a broker, including sales, customer service, and in-depth knowledge of insurance products, can open doors to a variety of other positions within the industry.
- You can enjoy job stability
The need for health insurance is constant, providing a level of job stability that is attractive to many. Health insurance is a necessity for individuals and businesses alike, ensuring a steady demand for knowledgeable brokers. Additionally, the relationships you build with clients can lead to recurring business and referrals, helping to solidify your place in the industry. This ongoing need for insurance services means you’re likely to find consistent work and opportunities for maintaining and growing your income.
Cons of Being A Health Insurance Broker
While being a health insurance broker comes with many advantages, it also has its downsides. Here are some of the challenges associated with the profession.
- Your earnings could vary
If you lack the dedication to put in the time necessary to identify potential prospects and nurture positive relations with your clients, you may not be successful as a broker. If you have a high-income requirement that is initially out of reach, you could become discouraged and not want to stay in the industry. Insurance sales are typically commission-based, so your income may be higher one month and lower in another. A lot of business is written in the fourth quarter, as employees gear up for coverage to begin in the first quarter of the following year. It is important you be able to attract new business, month after month, to ensure yourself of a steady income.
- Being a broker requires some training – and a background check
Both California and Nevada require you to earn an insurance license, which includes completion of pre-license training and passing a license exam. In California, a minimum of 20 hours of study is required as well as 12 hours of code and ethics training. In Nevada, you are required to complete 20 hours of training for Life Insurance and 20 hours of training for Health Insurance. A background check entails a review of criminal offender record information (CORI) from the state where you apply and from the FBI. It includes fingerprinting for each applicant. The National Association of Insurance Commissioners (NAIC) Regulatory Information Retrieval System (RIRS), state producer license database, and special activities database are also checked for possible disciplinary actions. If you have any blemishes on your record, your best career choice may be a different field.
- Continuing Education is required to maintain your license
Both California and Nevada also require you to complete additional training to keep your insurance license. California requires 24 hours of Continuing Education (CE) hours (including three hours of ethics training) during each two-year license period. Nevada requires 30 hours of CE Credits, including three hours of ethics training, every three years.
- Meeting Sales Targets
Sales targets can be stressful. You need to constantly find new clients and retain existing ones, which involves a lot of networking, follow-ups, and relationship management. This pressure can be a major downside for many brokers, as it often leads to long working hours, high stress levels, and the need to stay updated with market trends and customer preferences.
- High Competition
The insurance industry is highly competitive. Brokers must stay ahead of the competition to succeed, which often involves staying updated with the latest industry trends, regulations, and customer needs. This can be particularly challenging, especially for newcomers who are still building their networks and expertise. Successful brokers usually invest significant time in continuous learning and developing strong relationships with clients to differentiate themselves in the market.
- Managing Client Expectations
Clients often have high expectations, and meeting these can be difficult, especially when dealing with complex claims or policy issues. Navigating through intricate regulations, understanding detailed policy language, and managing client communications all add layers of complexity to the process. Ensuring client satisfaction requires a combination of expertise, patience, and effective problem-solving skills.
Is Being An Insurance Broker A Good Job?
For many professionals, being a health insurance broker is a rewarding career because it offers flexible work arrangements, income potential through commissions and renewals, job stability, and opportunities for career growth. However, success requires strong sales skills, ongoing education, and the ability to build lasting client relationships.
Being an insurance broker comes with its own set of challenges and rewards. It offers flexibility, potential for high earnings, and job satisfaction. However, it also requires dealing with sales pressure, competition, and ongoing learning.
If you’re considering a career as an insurance broker, weigh the pros and cons carefully. Think about your skills, interests, and long-term goals. For those ready to take the plunge, it can be a fulfilling and profitable career.
We believe the benefits far outweigh the disadvantages. If you’re ready, and you want to explore your opportunities, visit the Word & Brown General Agency or call 800-869-6989.
Frequently Asked Questions About Becoming a Health Insurance Broker
How do you become a Health Insurance Broker?
To become a health insurance broker, you must satisfy your state’s licensing requirements, complete any required pre-licensing education, pass the licensing examination, and complete a background check if required. Once licensed, you can work independently, join an agency, or partner with a General Agent to access additional resources and support.
Is insurance sales a good career?
For many people, insurance sales is a rewarding career because it offers flexibility, income potential, career growth opportunities, and the ability to help individuals and businesses protect their health and financial well-being. Success often depends on a broker’s commitment to building relationships and maintaining a strong client base.
How much do health insurance brokers make?
Insurance broker salary and commission earnings vary depending on location, experience, production levels, and client retention. Many brokers earn commissions on new enrollments and may also receive renewal commissions on retained business, creating opportunities for recurring income.
What is the difference between a health insurance broker and an insurance agent?
A health insurance broker generally represents multiple insurance carriers and helps clients compare plans from different companies. An insurance agent may represent one insurance carrier and primarily sell that carrier’s products.
Can health insurance brokers work from home?
Yes. Many independent health insurance brokers operate from home offices and enjoy flexible schedules. Others choose to maintain office locations or use a hybrid approach that combines in-person and virtual meetings.
Is there demand for health insurance brokers?
Yes. Individuals, families, and employers regularly seek guidance when selecting health insurance coverage. Changes in healthcare regulations, employee benefits, and insurance offerings continue to create demand for knowledgeable health insurance professionals.
What are the benefits of being an insurance broker?
Some of the most commonly cited benefits of being an insurance broker include flexible work arrangements, the ability to help clients, income potential through commissions and renewals, career advancement opportunities, and long-term job stability.
