Should a DoI ever issue temporary licenses?

[Survivor]

I don't think it happens in every state, but I know Georgia issues a temporary license to those just getting in the business. One only needs to meet age requirements and have a pretty clean criminal record. I myself started on a temp license with UA, and I really had no idea what I was doing. I think that my ignorance of insurance allowed them to feed me whatever BS they wanted. I had my resident license in within a couple of weeks, and left UA once I knew WTF was going on.

Now, my roommates friend has been hired by LibNat. She has been working for them and selling for a little while. She told me yesterday that she can't even pass the practice exam, though she has taken it SEVEN times. To me, this means that she has no idea what she's talking about when she sits down with an insurance consumer. There is a difference in knowing a product to sell it, and understanding a product and how it relates and helps the consumer.

In your opinion, is a temporary license a good way to keep people coming into or business, or does it make us all look bad when people out there are "insurance agents" without really understanding insurance?

 

[J.R.]

I don't think it happens in every state, but I know Georgia issues a temporary license to those just getting in the business. One only needs to meet age requirements and have a pretty clean criminal record. I myself started on a temp license with UA, and I really had no idea what I was doing. I think that my ignorance of insurance allowed them to feed me whatever BS they wanted. I had my resident license in within a couple of weeks, and left UA once I knew WTF was going on.

Now, my roommates friend has been hired by LibNat. She has been working for them and selling for a little while. She told me yesterday that she can't even pass the practice exam, though she has taken it SEVEN times. To me, this means that she has no idea what she's talking about when she sits down with an insurance consumer. There is a difference in knowing a product to sell it, and understanding a product and how it relates and helps the consumer.

In your opinion, is a temporary license a good way to keep people coming into or business, or does it make us all look bad when people out there are "insurance agents" without really understanding insurance?

What a great question Survivor. As you and the rest of us know, the vast majority of the material on the tests are nice to know but not applicable to selling insurance in the real world. How many clients ask you when HIPAA was enacted or want to find out more about the in's and out of COBRA for group and individual plans? You'd probably put them to sleep in about 2 minutes judging from the response I get when talking about insurance with non-insurance related folks.

I'm open to the possibility of issuing temporary licenses, as long as the licensee has a sponsor who will take on full responsibility for his or her actions. Otherwise you will have agents selling crappy plans without understanding how the different plans can impact the future of a family.

I'm getting ready to hire my 1st agent in January and plan on taking the following approach as I bring on more people.

1) Conduct telemarketing, B2B, etc. for 2-4 hours every day without missing a beat while getting an hourly rate plus benefits for meeting the minimum levels of production.

2) Continue to study for the license test in off hours.

3) Study the A-Z Guide to Selling Health Insurance that I'm putting the finishing touches on.

4) Accompany me on sales appointments to see my approach to designing and selling plans.

5) Listen to pre-recorded sales calls.

6) Take test and obtain license

7) Transition to 100% commission unless the individual feels that he or she is more comfortable telemarketing.

IMHO it is not smart from a business perspective to sell insurance, if a person cannot or will not prospect. A temporary license would be nice as a way to split commissions with a new agent, but it is not needed. Simply pay hourly and work in a bonus until the individual is licensed and ready to go out on their own.

 

[Survivor]

You make a good point on how the details can be unnecessary. However, I think there are some key basic things that one operating on a license is missing out on. For instance, do they know the real difference in explaining an indemnity based plan vs. one that pays the hospital? Do they understand what an insurable interest is as it applies to life insurance? Do they really understand the different parts of Medicare and how the different supp. plans fit different situations? One could argue that it will only effect the new agent's selling ability. I argue that it will also effect how well they provide service to the client in matching him or her with the correct insurance program.

 

[TXINSURANCE]

YES DOI's SHOULD permit temp under the following circumstances:

-Pass background check
-Minimum hours of "in house" training , i.e. can't sell day one
-Must be paired with licensed agent
-Can not renew temp back to back

Remember a TEMP can't get appointed with ANY carrier, or get E&O so someone with a license has to sign off on every deal.

I know TONS of agents licensed for 10 , 20 years that don't know a fraction of what my 90 day agents know. There are no shortage of uneducated agents out there - this is highly subjective and some people specialize in certain market segments. Ask me about Annuities, I can barely spell it...

Now if someone is to stupid to pass the real exam, their temp expires and they go away...

I really like TEXAS approach to this issue, and just about every other issue in general as well. Texas is great...

 

[J.R.]

You make a good point on how the details can be unnecessary. However, I think there are some key basic things that one operating on a license is missing out on. For instance, do they know the real difference in explaining an indemnity based plan vs. one that pays the hospital? Do they understand what an insurable interest is as it applies to life insurance?

If the agent is properly trained he or she will understand the different between an indemnity plan vs. non-indemnity plans, but more importantly, how to sell the different types of plans. I'd love to see how agents sell indemnity plans and to what type of client. The agent can price out a GR or Assurant plans and see the different in prices between traditional and indemnity. What do you mean by a plan that pays a hospital?

Do they really understand the different parts of Medicare and how the different supp. plans fit different situations? One could argue that it will only effect the new agent's selling ability. I argue that it will also effect how well they provide service to the client in matching him or her with the correct insurance program.[/quote]

If the agent is selling Medicare products it does matter. If not, it actually adds credibility if the agent specializes in a few insurance products and lets that be known vs. being a generalist. You well know the amount of time it takes to remain up to speed on the changes in your respective niche market.

"Hi MR. Smith, I offer health, Life, DI, CI, Accident Policies, LTC, Annuities and on Fridays I also write mortgages. Which one would you like to talk about."

My average client is right around 40ish years old and Medicare is still another 20 years away. Therefore, the comfort knowing that I'll take care of that down the road is sufficient enough for me and my clients IMHO. If the client gives me a referral for somebody who wants Medicare I will pass it along to somebody I trust. Buy me some food and beer, split the commission or send me their health leads and I'm content.

New agents have enough to learn and worry about then to inundate them with information that will not produce results. There are people who own a business and business people. The key is to work smarter, nor harder.