Update: 13.11.2022
“Side excitement. A side hustle is an entrepreneurial activity outside of your regular day job that generates additional income so you can reach your financial goals faster.”
Looking for a Side Hustle or Part Time Business Idea?
Here’s something that no one talks about and is probably one of the best side hustle ideas. I am talking about becoming an insurance agent.
What makes a good side hustle?
Ideally, a side hustle should be scalable, flexible in terms of timing, and highly rewarding. Becoming an insurance agent checks all the boxes.
There are many agents who work part-time or started out as part-time agents and then transitioned to full-time. Your earning potential is based on the insurance policy. It doesn’t depend on the number of hours you work. Plus, there’s a very low start-up cost, making it a worthwhile side hustle.
In fact, I would argue that the best way to get into the insurance agency business is to start out part-time.
Also, by working as a side hustler you can start to gain experience in the insurance industry and find out if it’s right for you. By selling a few policies per month, you can start building a book of business that will help you build a long-term business.
How to become an insurance agent? The ultimate guide
Selling life insurance part time or as a side hustle
Life insurance pays probably the highest commission up front, but there is almost no recurring revenue.
In most cases, your commission can be anywhere from 80-120% of the first year’s total premium. So, for example, if you sold a million dollar life insurance policy with a $1,500 annual premium, you could get about $1,500 in commission.
If your average commission is $1,500 per policy, then
Selling 1 policy per month = $18,000 per year
Selling 2 policies per month = $36,000 per year
Selling 5 policies per month = $90,000 per year
Selling 10 policies per month = $180,000 per year
Not bad, right?
Selling property and casualty insurance part-time or as a side hustle
Property and casualty insurance (also called P&C insurance) refers to auto insurance, home insurance, liability insurance, and other types of non-life/health insurance.
With P&C insurance, the initial premium may not be as high as Life insurance, but you get a recurring commission every time the policy is renewed. Therefore, if you do a good job as an agent and are able to retain your client, you get pretty much the same. amount every year. Successful agencies have a 90%+ retention rate.
Generally, the agent receives 8%-15% of the premium for each P&C insurance policy issued.
If you sold a $2,000 annual premium car insurance policy, you would be paid $200 with a 10% commission.
In the example above
For 10 policies, you get a recurring annual commission of $2,000
For 50 policies, you get a recurring annual commission of $20,000
For 500 policies, you get a recurring annual commission of $100,000
For 1,000 policies, you get a recurring annual commission of $200,000
That’s why you see agents who are in business for a certain amount of time making huge amounts of money with recurring revenue.
So, if you start building your book of business today, you can earn that kind of money over a period of time.
How to start a side hustle in the insurance agency space?
Depending on the line of business, you will need to obtain a license. Getting licensed while you are working part-time is not a bad idea as it can take anywhere from a few weeks to months.
Once you are licensed and registered as an insurance agent, you must be appointed by an insurance company to sell their products. This step is not easy and may take some time. To learn more about this process, you can check out our article Pro Tips for Acquiring Appointment for a New Agency.
Once assigned by an insurance agent, you’re good to go.
Professional tips for getting insurance Carrier appointment for a new agency
To grow your insurance agency, you need to find a sustainable way to generate leads and get new customers.
Many agents start out by marketing to their close contacts and then getting referrals to grow their business.
We have shared many of the latest marketing strategies on our blog that you can use to grow and expand your agency.
Why is starting an insurance agency/brokerage one of the best business ideas?
Expandable
The US population is over 325 million, and everyone needs several types of insurance. Plus, insurance is a trillion dollar market, so the sky’s the limit in terms of what you can achieve.
Limited minus
As an insurance agent, you sell a product that is created by an insurance carrier and they bear the risk of paying claims. It’s your job to connect customers with the right insurance company and you get paid a certain commission. You bear no risk of inventory or catastrophic loss or any other downside.
Barrier to entry
In most of the hustle and bustle on the other side, people can start in a few days. For example, every Tom, Dick, and Harry claims to be an expert at running Facebook ads, but over 90% of them have no idea what they’re doing.
Becoming an insurance agent takes some time in terms of licensing and designation, so you have a certain barrier to entry for new competition in this field. This licensing process helps qualify you to help your clients.
Financially rewarding
As discussed earlier, becoming an insurance agent is quite beneficial from a financial perspective. People have built generations of wealth by running a successful insurance agency. You can start as a part-time insurance agent and build a billion dollar company.
New features
Marketing has changed a lot in the last 10 years and it is evolving at a rapid pace. Many new opportunities arise to engage with audiences and generate new business.
What do you think?
Please leave a comment and let us know what you think about this article. Also, please subscribe to our mailing list to learn how you can get started as an Insurance Agent.
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