What’s good about choosing to get into the insurance industry is that there are many avenues to establishing a long-term, fulfilling career.
The insurance agent profession specifically need not be restricted to selling general insurance. For those who like helping people, you can get into a more specific line of insurance – life insurance.
Pause for a minute and think about the importance of this critical type of insurance. By offering life insurance, you can help people protect their spouse and children from serious financial losses if something unexpected happens.
With life insurance, clients can pay off debts, help pay for living expenses and pay for medical or final expenses should they meet an untimely demise. If you believe this is the career path for you, this guide should be very helpful.
Insurance Business provides insight into how to become a life insurance agent in Canada in this guide. We’ll provide answers to important questions like:
If you’re wondering if a career as a life insurance agent suits you, this guide can help. Keep reading and find out the pros and cons of this career path.
There are several steps to do to become a life insurance agent in Canada, and these can vary slightly from province to province. The following is a general overview of the vital prerequisites you’ll need to get your life insurance agent licence.
Note that those intending to pursue only Accident & Sickness (A&S) products, the licensing process is like that of the path to getting a full life licence.
Since January of 2016, the harmonized Life License Qualification Program (LLQP) has been the pre-licensing course requirement in Canada for a life insurance licence. This is typically a four-module course and offered by various education providers.
Register with an approved course provider, then successfully complete the exams. You can find a list of approved course providers on the Canadian Insurance Services Regulatory Organizations (CISRO) website.
Keep in mind that each provincial regulator manages the schedules of the LLQP exams in their jurisdiction. After passing the LLQP, you should apply for the licence within a year, or you will be required to retake the exams.
Next, register for the licensing exams with the appropriate provincial or territorial insurance regulator in your location. Below is a list of the insurance regulators across Canada.
|
Province/territory |
Insurance regulator |
|---|---|
|
Alberta Insurance Council |
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Insurance Council of British Columbia (ICBC) |
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|
Insurance Council of Manitoba |
|
|
Financial and Consumer Services Commission |
|
|
Superintendent of Insurance |
|
|
Superintendent of Insurance |
|
|
Superintendent of Insurance |
|
|
Superintendent of Insurance |
|
|
Financial Services Commission of Ontario |
|
|
Superintendent of Insurance |
|
|
Autorité des marchés financiers |
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Insurance Councils of Saskatchewan |
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|
Superintendent of Insurance |
If you want to practice in more than one province, or if you decide to move between provinces, you do not need to retake the licensing exams. This is the rule if you have a licence from another regulatory body in another province and are deemed to be in good standing.
The only exception to this rule is Québec -- this province has its own ethics and professional practice modules. To practice there, you will have to take these modules first.
After passing the exams, find an insurance provider to sponsor the license application in your location.
Typically, the sponsoring insurance company contracts you as their insurance agent.
It's the sponsor’s responsibility to determine whether a candidate meets all the criteria and is suitable for the licence. They must also monitor your activities to ensure you perform your work in compliance with established rules and regulations.
You will need to get errors & omissions (E&O) insurance before formally submitting your life insurance licence application. E&O insurance is mandatory, and it's very likely that your sponsoring firm will help you find an E&O provider.
This professional liability insurance is necessary to protect you from any client claims that may arise resulting from any unintentional mistakes on your part.
Once you have your sponsorship, you must pay a licensing fee and get clearance from criminal record checks and financial background checks as required. Take care when completing the application – make sure that you include all the necessary and relevant information.
The applicable authorities in your location will then review your application form and supplemental information to establish whether you have met all criteria. Based on their assessment, the regulatory authorities will also decide whether you have sufficient good character and may be entrusted to conduct business in good faith.
Depending on the volume of applications and the regulatory body, your application may take between 10 and 20 business days to review before you can be informed of whether your application is approved.
To know the status of your application, you may contact the appropriate licensing authority via their online portal.
To keep your life insurance licence active and updated, most regulatory authorities will require that you take continuing education (CE) courses.
Find out what these CE requirements are, what they entail, how many credits you must earn, and how often you need to take CE courses. You must also keep accurate, detailed records of the CE credits you earn for auditing purposes.
Other provinces may have specific, unique requirements when it comes to the licensing process. Québec, for instance, requires new life insurance licensees to undergo a 12-week probationary period. During this time, they must work under the supervision of a licensed representative.
Meanwhile, in BC, The Insurance Council of British Columbia requires all licensees to take and complete a Council Rules Course within their first year of acquiring their licence. Check with your provincial regulator and make sure to comply with their unique requirements, if any.
When getting your life insurance licence in Canada, the variations in the licensing processes of Alberta, BC, and Ontario have some unusual requirements. If you plan to get your insurance licence in any of these provinces, take note of their differences in their licensing procedures:
|
Process |
How to become a life insurance agent in Alberta |
How to become a life insurance agent in British Columbia |
How to become a life insurance agent in Ontario |
|---|---|---|---|
|
Harmonized LLQP |
Required course from accredited provider |
Required |
Required |
|
Sponsorship from insurance company |
Required |
Not required, but agents need at least 1 contracting insurer |
Required |
|
E&O Insurance |
Required |
Required |
Required |
|
Governing body licensure |
Required |
Must meet certification requirements |
Licence from FSRA required/candidate must pass Suitability test |
In Canada, the life insurance sector is composed of a wide range of products, including term life, whole life, and universal life insurance policies. One study has shown that the life insurance market in Canada is still growing, with a large portion of Canadians preferring to get their policies via insurance agents.
Canadians see life insurance as the primary means of providing financial security for their families in case of unexpected events. But is the career path of a life insurance agent in Canada for you? Let’s look at some important facts:
Source: clhia.com
Candidates who want to have a broader scope and help clients even more can become an insurance broker in Canada for life insurance instead. Their main purpose is to work in the interests of their clients, as opposed to life insurance agents who work only for their contracted life insurance companies.
That typically depends on the individual and their location. However, going through the process of how to become a life insurance agent in Canada is generally challenging. This is due to the inherently competitive business environment and the stringent educational and licensing requirements.
While most provinces and territories require only a high school diploma or GED equivalent, the province of British Columbia requires a bachelor’s degree as the minimum educational requirement. Some employers like insurance companies, may place more value in candidates that got higher marks in their licensing exams. Others express greater preference for those with college degrees over those with only high school diplomas.
For some candidates, the cost, time, and energy you must devote to training programs, studying for the licensing exams, passing these exams, and supplying the necessary information can be overwhelming. That’s why it’s advisable to know the exact requirements of your province’s licensing process so you can be ready to meet them.
Without mincing words and thinking realistically, yes, the role of life insurance agent can be challenging. Despite the need and growing demand in Canada for life insurance, it can be tough to sell insurance, especially for independent agents. Here are some of the most common reasons that make the career of an insurance agent difficult:
Finding qualified potential customers is not easy. Cold calls don’t always convert leads to actual clients, and many leads may have already been contracted by other insurance agents.
Even though many citizens need life insurance, a significant portion of people contacted will not be interested in purchasing life insurance. As an insurance agent, you will have to be ready to receive a lot of "no’s".
Many life insurance agents are paid purely by commission, meaning their incomes are heavily dependent on individual sales performance and can fluctuate often. Given this challenge, you must decide early on if you want to specialize in life insurance.
The life insurance industry in Canada is often saturated with other more experienced agents with whom you will compete for the same clients.
One of the biggest obstacles to success and the biggest challenge can be establishing rapport and trust. Remember, much of your job involves convincing people to share personal financial information and discuss their mortality. This can make a lot of people hesitant and uncomfortable to share, especially with new clients.
When it comes to succeeding as a life insurance agent, getting your life insurance licence and maintaining the licence are only the tip of the iceberg. You need practical skills to succeed in this industry. Here are some essential skills you can acquire and develop.
Communicating effectively is important when dealing with clients. You need to explain complex insurance policies to your clients and get them to articulate their needs. Empathy and active listening are also essential components of communication, enabling you to accurately assess clients’ needs and tailor-fit your products.
Staying updated on industry trends, changes in regulations, and developments in insurance software and other technologies can help you succeed as a life insurance agent. Part of this is also meeting CE requirements, as this not only helps you maintain your licence, but continually enhances your skills.
By continuing your professional development and getting additional certifications, you can better match clients with the right life insurance products and personalize your services.
Knowing how to handle client’s concerns and complaints is another essential skill for success as a life insurance agent. This is related to effective communication. With good customer service skills, you can build trust, understand clients’ needs better, simplify complex concepts, and handle any objections or questions they may have in a professional manner.
This also involves staying in contact with clients after the sale, which can be crucial for building loyalty and obtaining future referrals.
It’s possible to establish a long, lucrative, and fulfilling career as a life insurance agent, but it will involve putting in a lot of time and effort to find clients. You can earn commissions on policies you’ve already sold and can earn from clients whenever they need to renew their policies. This is a challenging career that constantly requires finding leads, building relationships, and closing sales.
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