Life, Accident, And Health Insurance: Do Licenses Expire?

The life, accident, and health insurance license does expire and needs to be renewed. The renewal period varies by state, with most states requiring renewal every two years. For example, in New York, the license is valid for two years, expiring on June 30 of odd-numbered years. In Texas, the renewal fee is $50, and there is a $25 late fee if payment is not made before the expiration date. The requirements for renewal also differ by state. For instance, in California, the licensee must complete 24 hours of continuing education credit before renewing their license.

What are the prelicensing requirements?

The prelicensing requirements for a Life and/or Accident and Health license vary depending on the state.

California

In California, the prelicensing education requirement for a Life license applicant consists of a 20-hour prelicensing course that is product-specific and a 12-hour prelicensing course on code and ethics. Therefore, there is a 32-hour prelicensing requirement for this license.

The prelicensing education requirement for an Accident and Health Agent or Sickness license applicant consists of a 20-hour prelicensing course that is product-specific and a 12-hour prelicensing course on code and ethics. Therefore, there is a 32-hour prelicensing requirement for this license.

The prelicensing education requirement for a Life and Accident and Health or Sickness license applicant consists of a 40-hour prelicensing course that is product-specific and a 12-hour prelicensing course on code and ethics. Therefore, there is a 52-hour prelicensing requirement for these licenses.

New York

In New York, to qualify for a license, the licensing candidate must meet the following prelicensing requirements:

• Complete a Department-approved prelicensing education course totaling not less than 40 hours of instruction for the life, accident & health authority or not less than 20 hours for either life-only or accident & health-only authority.
• Pass, within 2 years of applying for the license, the licensing exam administered by PSI Services.
• A candidate applying for variable life/variable annuities authority must provide proof of having passed FINRA series 6, 7, or 63.

Florida

In Florida, to qualify for a 2-15 Health & Life license, an applicant must complete the 60-hour prelicensing course and complete and submit an application for a license with the Florida Department of Financial Services, along with the associated fees.

How do I renew my license?

The renewal process for a life, accident, and health insurance license varies depending on the state. Here is a general overview of the steps to renew your license:

Check State Requirements:

Before initiating the renewal process, it is essential to verify the specific requirements of your state. For instance, in Texas, licenses must be renewed every two years and require 24 hours of Continuing Education (CE) credits. In contrast, New York requires license renewal every two years, with the expiration date determined by the applicant's birth year.

Complete Continuing Education (CE) Requirements:

Most states mandate a certain number of CE credits or hours to maintain your license. These requirements often include specific topics or types of courses, such as "classroom" or "classroom-equivalent" courses and ethics. Ensure you meet the necessary CE criteria before your license expiration date to avoid fines and delays.

Pay Any Outstanding Fines:

If you have accrued any CE-related fines, pay them off. These fines are typically separate from the renewal fees and must be addressed to achieve compliance.

Submit Renewal Fees:

Pay the required renewal fee to the relevant authority. Some states, like Texas, charge a flat renewal fee, while others, like New York, have varying fees for residents and non-residents. Late fees may apply if you don't pay by the expiration date.

Update Contact Information:

Keep your contact information, legal name, business name, and address up to date with the licensing authority. This ensures you receive important communications, such as renewal invoices, at the correct email address.

Follow Up with the Licensing Authority:

After completing the necessary steps, follow up with the licensing authority to confirm the renewal of your life, accident, and health insurance license. This may involve checking the status of your license online or contacting the relevant department for confirmation.

Remember to refer to your specific state's guidelines, as the process may vary slightly. Additionally, if you have a lapse in your license due to non-renewal, you may need to retake the qualifying examination, as seen in the case of New York.

What can I do with a life and health insurance license?

Obtaining a life and health insurance license allows you to sell and retain life and/or health insurance policies within a specific state. It qualifies you as a life insurance agent who is legally able to explain, sell, and process that line of insurance.

Both of these types of insurance protect a claimant from loss relating to medical situations or death. The terms of the life and health insurance you are selling are dependent on the provider of the policy. If you work for an independent agency or broker, you will have access to several insurance brands.

Life Insurance License

Life insurance policies ensure that the policyholder and their beneficiaries will receive a stated benefit upon the event of a death. Life insurance policies can vary based on the length of time covered, and with that, the premiums and amount of coverage vary. For example, term life insurance policies usually have lower premiums and cover a specified amount of time should death occur. Whereas whole life insurance policies cover the lifetime of the insured but at higher premiums. Whole life insurance can be seen as a long-term investment as there is a cash component that appreciates over time.

Health Insurance License

Your health insurance license will allow you to sell common types of health insurance within your state, like HMOs, PPOs, and HSAs. These are variants of different types of health insurance coverage, but they share the same intent to reimburse the claimant should they experience medical expenses from injury or illness. An HMO allows the insured and their beneficiaries to access a network of care providers, hospitals, and specialists. A PPO offers more flexibility as it will still cover a care provider outside the health insurance network. HSAs are savings accounts for insured people who typically pay higher deductibles so that they can save accordingly for any medical expenses that are not covered.

A health insurance license may also allow you to sell some disability lines, depending on your state.

What are the limitations of a life and health insurance license?

A life and health insurance license allows you to sell life insurance and health insurance but does not cover auto, home, title, or property and casualty lines. These other types of insurance will have their own licensing exams and requirements as mandated by the state.

For example, in New York, a life and accident and health insurance agent's license expires after two years. If the license has been expired for more than two years, the qualifying examination must be retaken.

In California, a life and accident and health or sickness agent license entitles the holder to transact insurance for human lives, benefits of endowment and annuities, death benefits or dismemberment by accident, and benefits for disability income.

The license is granted upon the successful passing of a specific state's exam and allows the recipient to solicit and build a book of business of health and life insurance within that state. It is possible to work on behalf of an insurance agency, selling just their brand of products, or as an independent broker with access to several brands of products.

It is worth noting that a life and health insurance license does not qualify someone to sell variable whole life insurance products, which are tied to securities-backed investment vehicles that require a FINRA license to market and sell.

How do I get my life and health insurance license?

The process of obtaining a life and health insurance license varies depending on the state. However, there are some common steps that you can follow to get started on your journey towards becoming a licensed insurance agent. Here is a detailed guide to help you get your life and health insurance license:

Step 1: Check State Requirements

Each state has different qualifications and requirements for obtaining a life and health insurance license. It is important to check with your state's insurance organization to understand the specific rules and regulations that apply to you. Some states may require you to be a resident of that state or to have lived there for a certain period before taking the licensing exam. Additionally, the cost of the license, the application process, and the qualifications may vary, so it is essential to review the requirements for your specific state.

Step 2: Complete Prelicensing Education

Most states require you to complete prelicensing education before taking the licensing exam. The number of hours and the cost of this education can vary by state. For example, in Michigan, prospective agents need to complete forty hours of Life, Accident, and Health coursework, while in California, the requirement is for a 40-hour product-specific course and a 12-hour code and ethics course, totalling 52 hours. It is important to review your state's requirements and choose an approved prelicensing education provider to ensure you meet the necessary standards.

Step 3: Register and Prepare for the Exam

After completing your prelicensing education, you will need to register for the state insurance licensing exam. This exam is typically a proctored, multiple-choice test that covers topics such as general insurance knowledge, policy riders, state-specific regulations, and marketing practices. The cost of the exam varies by state, ranging from $40 to $150. It is recommended to give yourself ample time to prepare for the exam, as it covers a wide range of topics and can be challenging. Utilizing exam preparation resources and practice tests can increase your chances of passing.

Step 4: Pass the Licensing Exam

The life and health insurance licensing exam typically consists of around 100-150 multiple-choice questions and has a time limit of 2.5 to 3 hours. The passing score is generally 70% for all states. It is important to note that you may be limited to a certain number of examination attempts per year, so adequate preparation is crucial.

Step 5: Complete a Background Check

Most states require candidates to pass a background check as part of the licensing process. This process may include fingerprinting and can vary depending on the state.

Step 6: Submit Your Application

After successfully passing the exam and completing the background check, you will need to submit your license application to the appropriate state authority. This process may involve providing additional documentation and paying a fee.

Step 7: Print Your License

Once your application has been approved, you will receive a notification, and you can then print your license. Congratulations! You are now a licensed life and health insurance agent!

Please note that maintaining your license may require ongoing education and the payment of renewal fees, depending on your state's requirements.

Frequently asked questions