The income potential of an LIC agent is directly proportionate to the amount of hard work one puts in. You are the business, so how much ever time and effort you put in, is what you get. Compared to other businesses, where there is an initial investment, along with regular overheads, such as rent, salary, maintenance, etc; as an LIC agent you will not have to worry about these things. For many businesses, success is not guaranteed, as the cost of setup is heavy, and therefore they are susceptible to failure at the beginning. For them, the stakes of failure are high.
As an LIC agent, let’s assume that in a year, you bring in a premium worth 1,00,000; on average you will earn 35,000 in the first year of the policy, 7,500 in the second and third year and 5,000 every year till the maturity of the policy. The renewal commissions will form a steady stream of income. Sounds like a good plan, right? On the other hand, if we were to look at it from the Life Time Value (LTV), from the customers’ lifecycle point of view, the total earnings, if paid regularly for 21 years, would be 1,40,000. Moreover, while the client has a steady income, will generally take policies 3 times for various needs and might refer 3 people. Because of the repeat and referral business, the LTV of the customer grows exponentially. It becomes a passive royalty income and permanent income for generations to come. This is the USP of LIC, it is a business with zero risk and very high rewards. There is absolutely nothing to lose, and only everything to gain.
Once you have established your customer base, as an experienced LIC advisor, you will run on auto-pilot mode, where you will be gaining the most from repeat business and referrals. Selling to an existing client is more time efficient and requires less effort, as they have already formed a bond with you. Therefore, this is more effictive than working with new prospective clients.
Role of an LIC Advisor
As an LIC advisor, your role will include, but will not be limited to prospecting people who might be looking to do financial planning, understanding their requirements, advising them on various available options, following up with them and closing the sale. Attractive commissions can be expected, not only at the time of sale but as long as the policy is active. This renewal income or royalty income becomes a good source of passive income.
Prospecting a potential client can be done in the following ways:
Through mobile phone contacts listing, segregation, and/or classification
Social media – Using attractive creatives, through Whatsapp marketing, Facebook marketing, or Joining relevant Facebook groups, and/or Sending out bulk emails, etc.
Corporate Stall activity
Developing a referral network
Center of Influence
Steps after prospecting–
The income potential as an LIC agent is massive. The job never gets boring because prospecting clients can be done through various means. Moreover, once a bond is formed with the customer and they rely on your expertise for their insurance needs, your commission, royalty income and renewal income become a constant source of passive income.