Get Your Life Insurance License: Steps To Success

If you're considering a career in insurance, one of the first steps is to obtain a license in the state where you plan to operate. The process varies depending on the state, but there are some common steps. These include meeting basic eligibility requirements, such as being at least 18 years old and having no fraud or felony charges; completing pre-licensing education; passing a state insurance licensing exam; undergoing a background check, which may include fingerprinting; and submitting an application, often through the National Insurance Producer Registry (NIPR). The cost of the process varies but expect to pay several hundred dollars for exam and application fees, pre-licensing education, and background checks.

Eligibility requirements

To be eligible for a life insurance license, you must meet the following requirements:

Age

You must be at least 18 years old to apply for a life insurance license in most states.

Criminal Record

You must be free of any fraud or felony charges and not have any criminal convictions, including DUIs, reckless driving, driving on a suspended license, misdemeanours, felonies, or military offenses. Some states may also require you to not have any pending criminal charges at the time of your application. It is important to disclose any disciplinary actions or crimes to avoid delays or denial of your application.

Financial History

You must not owe any federal or state income taxes and should not have any past-due child support payments in some states.

Education

You must have a high school diploma or its equivalent. Additionally, you must complete any prelicensing education required by the state, which may include a specified number of hours of coursework covering topics such as insurance industry regulations, insurance principles, and health insurance. The cost and number of hours required vary by state, and some states do not mandate prelicensing education.

Pre-licensing coursework

To obtain a life insurance license, you must complete pre-licensing coursework, which is necessary to prepare you for the state licensure examinations. The number of hours of coursework you'll need to complete varies by state, ranging from 20 to 40 hours. You can take the subjects online or in a classroom.

The coursework covers a range of topics, including:

• Insurance industry regulations
• Insurance principles
• Health insurance (optional)

The coursework will cover the topics that will be on the state licensure exam. These topics include:

• Life insurance general knowledge
• Life insurance policies
• Policy riders and options in life insurance coverage
• Life insurance tax issues
• Annuity policy tax issues

If you are taking a combined life and health insurance exam, there will be additional health insurance topics.

Insurance veterans who have earned certain industry designations can skip the pre-licensing coursework and take the life insurance license exam directly. For example, those with a Chartered Life Underwriter (CLU) designation are only required to take the Life & Health Laws and Regulations test.

State insurance licensure exam

The State Insurance Licensure Exam is a pivotal step in becoming a licensed insurance agent. The exam is administered by Pearson VUE in 25 states, including Texas, while other states, like California, use PSI. The exam can be carried out online or in person, but note that you are only allowed one online attempt. All other attempts must be taken in person at a Pearson VUE testing centre.

The exam consists of multiple-choice questions and includes both general and state-specific material. The general questions test your federal insurance product and agent knowledge, while the state-specific questions cover state insurance regulations and laws. The number of questions on the exam varies depending on the state and the type of insurance license you are seeking. For example, in Texas, the Life exam has 80 scorable questions, the Life and Health exam has 130 scorable questions, and the Property and Casualty exam has 130 scorable questions.

The passing score for the exam is typically around 70%, but this can vary by state. It is important to note that the exam is not scored in the most obvious manner. Each exam has multiple versions with different questions, and a statistical procedure called "equating" is used to ensure that any differences in difficulty are accounted for. This means that your exam may be easier or more difficult than someone else's, even if you are being tested on the same material.

To prepare for the State Insurance Licensure Exam, it is recommended to take a pre-licensing course, which is required in some states like California. These courses can help you get familiar with the extensive content that you will need to know for the exam. Additionally, practice exams and questions can be helpful to test your knowledge and identify areas that need further review. It is crucial to focus on state-specific material as this may be the most challenging part of the exam.

On the day of the exam, arrive early to get accustomed to your surroundings and complete any necessary paperwork. Remember to bring the required identification, which typically includes one valid signature-bearing ID with your photo and the original copy of your pre-licensing education certificate.

Background check and fingerprinting

To obtain a life insurance license, you will need to complete a background check and fingerprinting. This is a standard part of the process and is required by most states. The purpose of this step is to ensure that applicants are trustworthy and meet the basic eligibility requirements to secure a life insurance license.

The specific requirements and procedures for background checks and fingerprinting may vary depending on the state. Some states may require both fingerprinting and a background check, while others may only require one or the other. It is important to check the specific requirements of your state.

• General background check: This type of check does not typically require fingerprinting. It will return information such as driving records, credit history, and other public information.
• Criminal background check: This type of check will use fingerprints to scan criminal databases and law enforcement records.
• FBI background check: This is the most in-depth type of check, searching federal records and potentially returning expunged records.

When it comes to fingerprinting, there are also different approaches taken by different states. In some states, you may need to drive to a physical location to have your fingerprints taken on-site, while others may offer more flexibility. Some states have fingerprint vendors, while others may use local law enforcement to conduct fingerprinting. It is important to submit your fingerprints within the specified timeframe, as some states have "expiration dates" for fingerprints.

It is important to be transparent and honest during the license application process. If there is any information in your background that may raise concerns, it is advisable to disclose it upfront. This can increase your chances of getting your license approved and demonstrate your commitment to compliance.

Application and fees

The final step in the process of getting a life insurance license is to submit your application and pay the relevant fees. The application can normally be completed through the National Insurance Producer Registry (NIPR) and will be accompanied by a filing fee that can range between $20 and $150 depending on the state you're based in and the lines of authority you're applying for. The cost of an insurance license varies depending on several factors, including the lines of authority you're applying for (e.g. health insurance or casualty insurance) and the state where you plan to operate. Generally, you can expect to pay several hundred dollars for the licensing exam and application fees, though there may be other costs, such as pre-licensing education courses and background checks.

It's important to note that the exact steps and their order may vary depending on your state's specific regulations. For example, applicants in Michigan must submit their application straight after choosing an insurance line, while those in Vermont aren't required to complete a background check at all.

Once you've submitted your application, all that's left to do is wait. Processing times vary from state to state, ranging from a couple of weeks to a few months. The state will typically notify you by email once your application has been processed, providing you with your license number and National Producer Number (NPN).

It's worth noting that the processing time for your application may be longer than expected if the state department encounters issues with your background check or is experiencing a particularly busy period.

Frequently asked questions