Life Insurance Agents CPMI Pre-licensingThe Life Insurance Agent Opportunity
A licensed life insurance agent (or producer) works with people to help them increase and protect their financial earning power by specializing in selling policies that pay beneficiaries when a policyholder dies. Depending on the policy owner's circumstances, a cash-value policy or annuities can be designed to provide retirement income, final expenses, funds for the education of children, paying off debt, as well as other benefits.
Agents may specialize in only life insurance, or function as generalists, providing multiple product types. These may include health insurance as well as property and casualty insurance. All Life insurance agents must obtain a valid Insurance License in their respective state.
Brief descriptions of types of life insurance policies sold by Life insurance agents include the following, along with some of the particular uses of the insurance:Term insurance
Term insurance is purchased for a specific term, or time period. The value of term insurance may be level, decreasing, or increasing. It is the least expensive form of life insurance and has no cash value build up in the policy. Term insurance is often used by people who are looking simply for a death benefit to cover final expenses or for covering credit liabilities such as paying off a home mortgage or credit card debt.Whole Life insurance
The face value (coverage/death benefit) stays level throughout the policy, projected to be a permanent policy, ending upon the insured's death. Whole life policies also develop cash value which grows throughout the life of the policy. This cash value can be borrowed against by the policy owner, or can be returned to the policy owner if he/she decides to cancel the policy.Universal Life
This is permanent life insurance in which the timing and amount of premiums as well as the death benefit can be changed by the policyowner.
- Premiums are put into the policy account. Mortality charges are deducted and interest is credited to the balance at a variable future rate, becoming the policy s cash value.
- Where the investment portion of the premium is invested (usually in various mutual funds with which the insurer works) can be determined either by the insurance company or by the policy owner, in which later case the policy is usually called Variable Universal life.
These are pure investment vehicles in which consumers invest money.
An increasing number of insurance sales agents offer their clients advice on how to minimize risk as well as comprehensive financial planning services, especially to those approaching retirement. These services include retirement planning, estate planning, and assistance in setting up pension plans for businesses. As a result, many insurance agents are involved in "cross-selling" or total "account development." Besides offering insurance, these agents may become licensed to sell mutual funds, variable annuities, and other securities. This practice is most common with life and health insurance agents who already sell annuities, but many property and casualty agents also sell financial products.