Updated: Sep 5
A sales job - a challenge some might say, as the average mortal freezes at the idea of cold calling, roadshows or presentations to sell a product or service.
However, sales is an excellent experience that everyone should have in their life.
The courage to walk up to a stranger to strike a conversation or the ability to persuade someone convincingly are skill sets that empower you in all areas of your life.
Shyness and timidity has no place in our soul if we aspire to scale great mountains of achievements.
That said, when it comes to sales careers with unlimited income potential, property and insurance are the two that usually comes to mind.
Among the many choices out there, the real estate and insurance industry stand out as the most popular ones due to the perks of the job, such as having a flexible schedule and being their own boss.
If you are willing to work hard and smart, a lucrative journey awaits, potentially earning you a pretty decent pay-check of five to six-digit commission per month. We have seen this happening many times even for those in their 1st year of business.
And that's well around the pay grade of typical high-earning professionals like lawyers, doctors and C-Level executives who might be decades into their professions.
Not too bad isn’t it?
Well, of course, there are many who do not make it too and no one can guarantee your success in either field; but to put it in perspective, the odds are just like any other industry.
So what are the major differences of a real estate and an insurance agent career?
Real estate agents and insurance agents are both sales professionals who focus on selling different types of products and services.
They perform many similar duties that yet has distinct differences.
Similarities Between Real Estate Agents and Insurance Agents
You have to be at least 21 years old to start.
Career Courses & Qualifications:
Being a real estate agent or insurance agent requires you to take up relevant courses and getting professional certifications and licenses.
For real estate, you would need to sit for and pass the Real Estate Salesperson Course and Exams.
For Insurance, you would need to pass all 4 papers from the SCI (Singapore College of Insurance).
If you are sick of the nine-to-five grind, being a real estate agent or insurance agent gives you flexible working hours.
You will be able to work on your own schedule. With that, it also means you have to work during weekends or public holidays as it is usually when your clients are free to meet you.
Both professions do not receive a fixed salary and their incomes are mainly commission-based which allows them to earn an attractive commission from just a few sales.
Apart from meeting and servicing clients portfolios, both agents are responsible for advertising and marketing their services so that they can grow their business and expand their networks.
That said, property agents usually have higher marketing expenses than insurance agents due to the need to advertise on multiple platforms.
When deals are confirmed, they both need to fill up the paperwork for clients and keep records.
From my point of view, paperwork is usually less complex for property transactions than it is for insurance.
Need to Work Well Independently & With Others:
Many real estate agents and insurance agents join experienced mentors in established agencies when they first start out as guidance, training and technology support is critical for a rookie.
Both jobs are usually one-man shows that run multiple departments of a typical business from marketing, admin, sales, customer service and all else that falls between the gaps.
Amidst industry competition, it is important to have great team support.
Hence, it is important to be a good team player, cooperating with others in the team and watching each other’s backs.
The longer you are in the sales industry, the more you will understand the following:
To run fast, you can run alone. To run far, you need to run as a team.
Communication Skills & Personal Bearing:
Whether you are selling a million dollar property or hundreds of thousand worth of insurance policies, all consumers want a person whom they can trust and speak to comfortably.
Therefore, it is important for an agent to be trustworthy and possess great communication skills and deep domain knowledge.
Dressing and grooming yourself well is also an important aspect of first impressions as they do affect people's opinions of you.
Differences Between A Real Estate Agent and An Insurance Agent
Real Estate Agent:
Minimum 4 GCE ‘O’ Level passes or equivalent (taken at not more than 2 sittings).
GCE ‘A’ Level certificate with passes in at least 3 subjects at “HIgher 2” level and two subjects at “Higher 1” level; an International Baccalaureate Diploma qualification; a diploma awarded by a polytechnic in SIngapore or any other equivalent academic qualifications.
Real Estate Agent:
A real estate agent can choose to work on all types of properties or to select their specialisation, such as to focus on new property sales, HDBs, landed properties, relocation of expats or even commercial properties.
Note that they have to source for their own inventory if they are focusing on resale properties.
Insurance agents too have their own specialisations or can choose to function as generalists providing various policy-type products from savings to hospitalisation plans or investment linked products and endowment policies.
Insurance agents do not need to source for inventory though as their products are policies created by the companies they are affiliated with.
Commission & Compensation
Real Estate Agent:
A typical rental deal would net an agent between 1-2 months rent as commission and may be renewed annually with the agent making renewal commissions every year or two.
Some top agents even hire staff to manage their portfolio of lease renewals as they amount in the hundreds per year, netting them a handsome 6-figure income annually consistently.
A typical sale of a property will yield an agent 1-2% commission for a resale property and 2-4% for new properties. This means a sale of a million dollar home could potentially bring in a $10K-40K income.
Take note though that at times, there may be co-broking (sharing between agents when they bring clients to each other) involved hence this figure may be split between them.
Hence, to make $100K, a Property Agent would need to close ten 1 million dollar home sales a year (Assuming 1% commission per sale) or just one 4 million dollar home sales a year (Assuming 2.5% commission per sale).
It is possible and very common for property agents to make a 6-figures annual income even in their 1st year of work. The exemplary ones might even be making 6-figures a month.
Insurance agents get paid based on the products they sell - Whole Life, Endowment and Term, Accidents and Investment Linked Policies etc.
Each product has a different scheme of payment and agents typically get paid a larger First Year Commission (FYC), followed by lower annual renewal commissions.
Some policies like personal accidents might even pay them renewals for a lifetime.
In addition, there are bonuses and long term incentives that insurance advisers may earn along the way.
Take a look at this chart:
Example, if you managed to close a whole life policy of 25 years with an annual premium of $4000, your FYC will be $2000 followed by 2nd year renewal commission of $1000 and subsequent year commission of $200 up till year 6.
Hence, to make $100K in your first year, you would need to close 50 such cases.
Real Estate Agent:
Good real estate agents typically keep in touch with their clients in person at least once or twice a year after concluding a sale or send them regular market updates to maintain contact.
Great real estate agents even have a system to keep in touch with those who did not buy from them (This might be similar for insurance agents too).
In rental cases, agents will typically have to keep in touch 1-2 times over the duration of the lease unless required to convey communications between landlords and tenants.
After-sales service is critical in the insurance industry.
Insurance agents have to analyse their clients policies and financial conditions annually to suggest additions and amendments to their coverage.
During times of difficulties, they would also have to assist their clients in making claims.
Opportunity to Travel
Real Estate Agent:
Property agencies are sometimes appointed by property developers to market new launch projects abroad.
This means you may have the opportunity to travel, learn about foreign markets and expand your overseas clientele base.
Chances of an insurance agent working abroad are slim.
Closing The Sale
Real Estate Agent:
Negotiation and people skills are important to a real estate agent as he/she will frequently be required to negotiate terms of a deal and prices.
The ability to observe and size up a prospect is also desirable as he will be able to obtain maximum leverage for his client.
As insurance policy prices and terms are set by the insurance agency, insurance agents are typically not required to negotiate as much.
Real Estate Agent:
Friends and family typically respond favorably and proactively when you are in the real estate industry as people usually enjoy learning about the market, trends and where good deals are.
It is easy to ask a friend out for a drink.
The stigma of an insurance agent friend who asks you for a drink is very real and hence people generally react very cautiously.
Hence, warm market leads tend to be harder when first starting out.
To summarise, at the end of the day, both property and insurance are great timeless professions that will remain relevant to the community as most people need help understanding the complexities in each product and advice when it boils down to comparing them.
Regardless of which profession you are inclined towards, both will provide you an amazing experience in personal growth and development.
Did this article provide you with ideas or inspiration?
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Stuart Chng, Senior Associate Executive Director of OrangeTee & Tie, is a renowned leader and personality in the real estate industry.
He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.
Professionally, he is a licensed real estate agent, investor, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.
Throughout his career, he has helped many clients grow their wealth through selecting great property investments and managing their portfolios actively. Read his clients' reviews here.
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