A Hot Job for Hard Times: The Life-Insurance Agent

Posted: March 22, 2010 in Uncategorized


by Leslie Scism
Sunday, March 21, 2010

One of the most old-fashioned occupations in finance is back in favor: the life-insurance agent. Some big insurers are adding thousands of agents and planning to sign up more. They’re taking advantage of the weak job market to scoop up former real-estate agents, mortgage brokers, bankers and lawyers whose prospects have declined. New York Life Insurance Co. added 3,618 agents last year. Northwestern Mutual Life Insurance Co. signed up 2,340. In Texas, a start-up with big-name backers opened in January with 2,200 agents and plans to double the number in three years.

It is an unlikely resurgence. Life-insurance agents, once an all-American type often portrayed in movies and television shows, underwent their own downsizing in recent decades. Companies deemed agents too expensive to recruit, train and subsidize in their early years, after which many soon gave up and left. Companies that once had armies of 10,000 to 20,000 agents began to rely increasingly, instead, on financial advisers, stockbrokers, banks and the Internet for sales.

Then, life-insurance agents’ mainstay product, known as whole life, suffered a black eye, both from a scandal over the way some agents sold it and from a widespread view that it wasn’t a very good investment.

The economic crisis turned things around. Many ordinary people lost heavily on stocks, making whole-life policies look better. That created an opportunity for insurance companies, some of which are now aggressively pursuing it by signing up new agents.

This coincides with a job environment that has many Americans adjusting their career aspirations to match the bleaker economy, considering work they might have passed up before.

Many discover that selling life insurance “is one of the most challenging careers you can take on,” says former agent Connie Staton, a “sunup to sundown” job of seeking out and meeting with potential customers, along with attending required educational sessions. Ms. Staton, 68 years old, quit the gig in 2007 after seven years, concluding that “the pay versus the hours didn’t match.”

Seventy percent of agents earn less than $35,000 in their second year, according to industry research firm Limra. Fewer than 20% of new agents are still on the job after four years.

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