Opinions expressed are solely those of the author and do not reflect the views of Rolling Stone editors or publishers.
Health insurance is becoming all the rage as a business these days. Technology companies are diving into the tradition-bound industry, and individuals are also pouring in. People are lured by the hope of high compensation and passive income. But, how do you get started in the industry, and how can you get off to a successful start? Here are seven steps to becoming a health insurance agent that will help you launch your career on the fast track.
In order to be compensated for selling health insurance, you’ll need to be licensed. Insurance licensure is handled at the state level. You will need to become licensed as a resident of your home state. Once you’re licensed there, you can choose to get licensed in other states as a non-resident.
To become licensed, you’ll have to take a certain amount of pre-licensing education and pass a state-administered test. You will also have to renew your license every couple of years. You’ll need to take various continuing education courses and pay the renewal license fee to maintain your license in each state.
Get the Required Certifications
Most health insurance agents also need to attain certain certifications, the two biggest being:
• AHIP (for Medicare insurance)
• FFM (for Affordable Care Act plans/under-65 health insurance)
You can attain these certifications on your own before contracting with a marketing organization or insurance company. Depending on the states you’re licensed in, you may also need to obtain state health insurance exchange certification, such as Covered California, in order to sell health insurance in your state.
You will likely have to complete these certifications, plus any required by the insurance companies you work with, every year.
Find a Marketing Organization
Many health insurance companies, and most of the large nationwide carriers, require you to be contracted through an agency structure; this structure is based on marketing organizations. The various organizations form your “upline,” which might look like this: You are contracted with a local agency, which is contacted with a field marketing organization (FMO), which is contracted with a national marketing organization (NMO), which is contracted with various health insurance companies.
Smaller or regional health insurers may allow you to contract with them directly. But, if you’re going to contract with a marketing organization for other carriers, you might want to contract through them even for carriers that you could, theoretically, contract with directly; this could help simplify your business.
Get Appointed With Insurance Companies
Once you’re set up under a marketing organization, you can get appointed with the health insurance companies you’d like to work with. They all have their own requirements in terms of paperwork, but some services exist that allow you to contract with multiple insurance companies at once; ask your marketing organization about this. Once you’re officially appointed with health insurance companies, you can legally help people with health insurance. You can also receive commissions at this point.
Work With a Mentor
There’s a lot of competition out there and it’s growing by the day. Since insurance companies typically work on an agency structure (local agency, FMO, NMO), you may not receive much useful advice on finding prospects and closing deals from the insurance companies you’re contracted with.
Try to find a mentor to work with you as you start out in the business. You will hopefully find a mentor within your local agency or FMO. They are incentivized to see you succeed since they will make more money as you make more money. However, if you don’t ask about it, you may not be offered this opportunity. The insurance industry is generally dominated by self-starting types who aren’t known to take time out of their schedules to ask people if they want mentorship. Be proactive and find someone who is successful in the industry and ask them if they’ll mentor you.
You’re unlikely to have business walking in your front door, or calling you out of the blue, when you first become a health insurance agent. Marketing is a requirement to make sales. As people respond to your marketing, they become leads. You work with your leads, trying to turn them into clients.
There is a multitude of ways to market; some cost money and others don’t. When you first start out, money may be tight. It’s perfectly acceptable to focus on lower or no-cost marketing strategies at first, like networking. As you grow, you’ll expand into the various forms of paid advertising and lead generation. Working with a mentor can help you avoid wasting money in this area.
Spend Most of Your Time Talking With Prospects
As you start to expand your marketing, you’re bound to become busier doing things like website optimization, upgrading technology and other tasks that offer great promise. Protect yourself against this, though. You won’t make sales if you don’t talk to people who need health insurance coverage. Make a point of spending as much time as possible speaking with these people. Don’t allow all of the “back-end” administrative tasks to take up so much time that you can’t talk to prospects. Your sales will dry up. Also, the more you interact with leads, the more confident you’ll become in your sales skills and the more efficient you’ll become at actually making sales. None of this happens if you waste too much time on non-critical tasks.
Health insurance is one of the hottest verticals or opportunities for entrepreneurs right now. There are people who need the services, so believe in the products, go through these steps, and put all you have into it for 3-5 years. It would be very unlikely that you can’t create a great income out of helping people navigate the confusing landscape of the health insurance marketplace.