Life Insurance License: Foreclosure Impact On Health Coverage

If you're looking to become a life insurance agent, you'll need to get licensed. The requirements vary by state, but there are some general steps you'll need to take. These include completing pre-licensing education, passing a state licensing exam, undergoing a background check, and applying for your license. In some states, you'll be earning a joint life and health insurance license, which will require passing a separate exam for each. The cost of obtaining a license depends on the state and can include fees for education courses, background checks, applications, and exams. It's important to note that having a foreclosure may impact your ability to obtain the necessary licenses, as it can affect your financial standing and background check. It's recommended to check with your state's insurance organization to understand the specific requirements and any potential impacts of having a foreclosure.

Pre-licensing education requirements

The pre-licensing education requirements for a life and health insurance license vary by state. Here is a summary of the requirements for a few states:

Florida

To obtain a life and health insurance license in Florida, applicants must complete a 60-hour Health and Life (Including Annuities and Variable Contracts) Agent Pre-Licensing Online Course. The tuition for the basic course is $139, while the essential course is $189. This includes a 3-month (90-day) enrollment term. All applicants must pass the end-of-course final exam with a score of 70% or higher, and the course completion certificate is valid for four years from the date of issuance.

Texas

In Texas, individuals seeking to become Life and/or Health Agents must complete a mandated pre-licensing course online. The pre-licensing courses for different lines of authority are as follows:

• Life – 20-hour course on Life Insurance or 40-hour course on Life & Health Insurance
• Accident & Health or Sickness (Disability) – 20-hour course on Health Insurance or 40-hour course on Life & Health Insurance
• Combined Life / Accident & Health or Sickness (Disability) – 40-hour course on Life & Health Insurance

California

California has specific prelicensing requirements for a Life and/or an Accident and Health or Sickness Agent license. The prelicensing education requirement for a Life license applicant consists of a 20-hour product-specific course and a 12-hour course on code and ethics, totalling 32 hours. For an Accident and Health or Sickness Agent license, the prelicensing requirement consists of the same 20-hour product-specific course and 12-hour code and ethics course, also totalling 32 hours. If applying for both licenses, the applicant must complete the 40-hour product-specific course and the 12-hour code and ethics course, for a total prelicensing requirement of 52 hours.

State insurance licensing exam

To become a licensed life or health insurance agent, you must pass your state's insurance licensing exam. The requirements for these exams vary by state, so it's important to learn your state's specific requirements. Some states test for life insurance and health insurance licenses separately, while others offer a combined exam.

The testable areas of all insurance exams include the benefits of insurance, how to work with clients, and state and federal regulations. There are also specific policies, provisions, and regulations that pertain to individual lines of insurance that are tested on the life or health insurance exam.

Life Insurance Exam Topics

• Types of individual life insurance (term, whole life, endowment, premium variations, etc.)
• Annuities (function, features, determination of benefits, etc.)
• Policy provisions, options, and other features (insuring agreement, loans against a policy, premium payments, etc.)
• Group contracts and underwriting
• Tax-qualified retirement plans (IRAs, 401ks, tax-sheltered annuities, etc.)
• Legal and tax implications of life insurance premiums, benefits, and withdrawals

Health Insurance Exam Topics

• Disability insurance policies (total, partial, residual, etc.)
• Basic medical expense insurance policies (hospitalization and care covered, common exclusions)
• Major medical insurance policies (covered charges, deductible, percentage participation, common exclusions)
• Managed care (HMOs, PPOs, etc.)
• Accident and health insurance provisions (claim forms, time of claims, change of occupation, pre-existing conditions, policy continuation, etc.)
• Group health insurance
• Social security disability
• Legal and tax implications of health insurance premiums, benefits, and withdrawals

Each state also includes questions about regulations that licensed insurance agents must follow, such as laws related to insurance contracts, definitions of terms, the regulatory authority in the state, general regulations, licensing requirements, and continuing education.

How to Prepare for the State Insurance Licensing Exam

Many states require test-takers to complete an authorized pre-licensing education course. Even if it is not a requirement in your state, a pre-licensing course can help you get accustomed to the extensive amount of content that you will need to memorize. Pre-license education requirements are typically around 20 hours for the life insurance exam, 20 hours for the health insurance exam, and 40 hours for a combined exam, but this can vary depending on your state.

You can choose between an in-person course, workbook, self-guided online course, or facilitated online course. Consider your other commitments and learning style when choosing a course.

How to Schedule Your Exam

You can schedule your state insurance licensing exam at any time. Your course facilitator or workbook will cover the process of scheduling your exam and getting your admissions ticket. Some states require that your Exam Admissions Ticket is signed by your instructor before you can schedule your test. Licensing exams are provided by Pearson VUE, and you can schedule your exam online or over the phone. Remember to use your legal name and personal information as it appears on your government-issued ID.

How to Pass the State Insurance Licensing Exam

Passing your state insurance licensing exam is all about preparation. Most states allow a period of around 90 days to take the exam after you complete your course. It's best to register for and take the exam as soon as possible so that the information is fresh in your mind.

The state insurance licensing exams are computer-based tests using four-option multiple-choice questions. The exams are timed and range from one hour and fifteen minutes to over two hours.

The cost of the state insurance licensing exam varies by state. For example, each insurance exam in North Carolina costs $45, while neighboring Virginia has a $35 fee per exam. If you choose to take the life and health insurance exams separately, you will need to pay for two exam fees and may need to complete two separate pre-licensing education courses.

Keep in mind that there may be additional fees to become fully licensed as a life and health insurance agent, such as an application fee, background check processing fee, or fingerprinting costs.

Background checks

The background checks are designed to verify an applicant's character and trustworthiness, as insurance agents handle clients' finances and sensitive information. Most states have regulations that specifically disqualify individuals with convictions involving crimes of moral turpitude, such as fraud, dishonesty, or breach of trust. Therefore, it is essential to disclose any criminal history accurately and completely on the insurance license application. Failure to do so may result in denial or delay of the license application.

In addition to criminal background checks, insurance providers may conduct additional background checks on applicants, including reviewing their health history, driving record, and other relevant information. These checks are regulated by state laws and are typically more extensive for larger policy amounts.

Application process

The application process for a life and health insurance license typically involves a number of steps, and the specific requirements may vary by state. Here is a general overview of what you can expect:

• Find your state's requirements: The first step is to familiarize yourself with the specific requirements of your state. You can usually find this information on the website of your state's insurance department or licensing agency. This will outline any requirements regarding criminal history, credit history, or financial stability that may impact your application due to your foreclosure history.
• Complete pre-licensing education: Most states require you to complete a certain number of credit hours of pre-licensing education before you can sit for the insurance licensing exam. This education is designed to provide you with the knowledge and skills necessary to sell life and health insurance products.
• Pass the insurance licensing exam: After completing your pre-licensing education, you will need to pass a state-approved insurance licensing exam. This exam will test your knowledge of the topics covered in your pre-licensing education, including insurance laws, regulations, and ethical practices. Be sure to review the content outline and any study materials provided by your state or education provider.
• Complete the license application: You will need to complete and submit an application for your life and health insurance license. This application will require you to disclose any relevant history, including criminal convictions, bankruptcies, or financial issues such as foreclosures. Be transparent and provide all the necessary information.
• Undergo a background check: As part of the licensing process, a background check will be conducted. This will involve a review of your criminal, financial, and credit history. The impact of your foreclosure on this process will depend on the laws in your state and the specifics of your situation. Some states may require a certain amount of time to have passed since the foreclosure or may consider extenuating circumstances.
• Pay the associated fees: There are typically fees associated with the application, background check, and licensing process. Make sure you understand the fee structure and have the necessary funds available to cover these costs.
• Wait for approval: Once you have submitted your application, you will need to wait for the licensing authority to review and approve your request. The time frame for this process can vary, so be sure to allow sufficient time for processing.
• Complete any additional requirements: Depending on your state's regulations, there may be additional requirements, such as errors and omissions (E&O) insurance or appointment with an insurance carrier. Consult with your state's licensing authority or an insurance industry association to understand any state-specific requirements or guidelines that may impact your application process.

Remember to refer to your state's specific guidelines and stay transparent throughout the process. If you have any questions or concerns about how your foreclosure may impact your application, don't hesitate to consult with the relevant licensing authority or seek advice from professionals in the insurance industry.

Exam topics

The topics covered in the life and health insurance exam vary by state. However, there are some overarching topics that are tested in all states. These include:

• Life insurance general knowledge
• Life insurance policies
• Policy riders and options in life insurance coverage
• Life insurance tax issues
• Annuity policy tax issues
• Health insurance general knowledge
• Dental, individual, and group policies
• Special needs individual insurance
• Health Maintenance Organizations (HMOs)
• Health insurance tax issues

Life Insurance Exam Topics

If you are taking a separate life insurance exam or a combined life and health insurance exam, you will be tested on topics such as:

• Types of individual life insurance (term, whole life, endowment, premium variations, etc.)
• Annuities (function, features, determination of benefits, etc.)
• Policy provisions, options, and other features (insuring agreement, loans against a policy, premium payments, etc.)
• Group contracts and underwriting
• Tax-qualified retirement plans (IRAs, 401ks, tax-sheltered annuities, etc.)
• Legal and tax implications of life insurance premiums, benefits, and withdrawals

Health Insurance Exam Topics

If you are taking a separate health insurance exam or a combined life and health insurance exam, you will be tested on topics such as:

• Disability insurance policies (total, partial, residual, etc.)
• Basic medical expense insurance policies (hospitalization and care covered, common exclusions)
• Major medical insurance policies (covered charges, deductible, percentage participation, common exclusions)
• Managed care (HMOs, PPOs, etc.)
• Accident and health insurance provisions (claim forms, time of claims, change of occupation, pre-existing conditions, policy continuation, etc.)
• Group health insurance
• Social security disability
• Legal and tax implications of health insurance premiums, benefits, and withdrawals

In addition to these topics, you will also be tested on state-specific regulations that licensed insurance agents must follow. These include laws related to insurance contracts, definitions of terms, regulatory authority, licensing requirements, and continuing education.

It is important to check the specific requirements and topics covered in your state's life and health insurance exam.

Frequently asked questions