Becoming A Life Insurance Broker: Steps To Success

Life insurance brokers are intermediaries between consumers and insurance companies, helping consumers find the best insurance policies to suit their needs. To become a life insurance broker, you'll need to meet basic eligibility requirements, get the necessary training, and meet licensure requirements. While the specific requirements vary depending on your location, you'll typically need to be at least 18 years old, complete a background check, and pass an exam. You may also need a college degree in a related field, such as insurance, business, economics, or finance.

Education: A college degree in a related field is beneficial, but not always required

While a college degree is not a requirement to become a life insurance broker, it can be beneficial in building a solid foundation for your career. A college degree in a related field such as insurance, business, economics, finance, business administration, marketing, accounting, or business law can provide you with valuable knowledge and skills that can help you excel in your role as a broker.

Although it is not necessary, a degree in a related field can give you a competitive edge and increase your employment opportunities. It demonstrates a strong background in relevant areas and can make your resume more attractive to potential employers. Additionally, a degree can provide you with valuable networking opportunities and internships that can enhance your career prospects.

If you are considering obtaining a college degree, common degree programs for insurance brokers include business administration and communications. Some educational institutions also offer specific degrees in insurance and risk management, although these are less common. An associate or bachelor's degree, or another training program, can provide a solid foundation of knowledge that may benefit your career as a broker.

It is important to note that the requirements to become an insurance broker may vary depending on your location. Therefore, it is always advisable to check the specific requirements of your state or region. However, in general, a college degree in a related field is not mandatory but can offer numerous advantages as you pursue a career as a life insurance broker.

Pre-licensing: Complete required coursework, submit fingerprints, and pass the exam

To become a life insurance broker, you will need to complete the pre-licensing requirements, which include taking specific courses, submitting fingerprints for a background check, and passing an exam.

Firstly, you will need to complete the required coursework. The number of hours of instruction required will depend on the state in which you plan to practice. For example, in New York, you must complete a Department-approved prelicensing education course totaling 40 hours of instruction for the life, accident, and health authority, or 20 hours for either life-only or accident and health-only authority. In Florida, applicants for a Life and Health Insurance license must complete a 60-hour Health and Life Agent Pre-Licensing Online Course.

Secondly, you will need to submit your fingerprints for a background check. Again, the requirements vary by state. In California, for example, you must submit fingerprints, while in Florida, electronic fingerprints are required to run a criminal background check.

Finally, you will need to pass the qualifying broker exam. This exam covers state laws and insurance products. If you plan to work in more than one insurance area, you may need to take multiple exams. In New York, the Life Insurance Agent/Broker exam (Series 17-51) is a 2-hour exam with 100 questions, while the Accident and Health Insurance Agent/Broker exam (Series 17-52) is also 2 hours with 100 questions. In Florida, the state exam fee is $44 for each attempt, and a passing score is valid for one year from the passing date.

Application: Submit your application, including fees, to obtain your license

Once you have met all the pre-licensing requirements, you can submit your application for a life insurance broker license. The application process will vary depending on your state and the type of license you are applying for. For example, in New York, applicants must apply online via NY LINX, while in other states, non-resident applicants can apply through the National Insurance Producer Registry (NIPR) website.

When submitting your application, you will typically need to include the following:

• Proof of meeting all the pre-licensing requirements, including completion of any required coursework and exams.
• Proof of passing the licensing exam.
• A completed license application form.
• Application or processing fee.

The fee for a life insurance broker license can vary depending on your state and the type of license you are applying for. For example, in New York, the fee for residents is $80 for a full two-year license and $40 for a one-year license. Non-residents can refer to the Department's Application Fee Schedule to determine the fee. Payment methods accepted typically include credit card, electronic funds transfer (e-check), or paper check.

It is important to submit your application and fees promptly to avoid missing any deadlines. Once your application is approved, you will be able to discuss, solicit, negotiate, and transact insurance sales. You can also start building your own clientele base or apply for jobs with insurance agencies or brokerages.

Broker bond: Most states require a surety bond to ensure financial accountability

To become a life insurance broker, you'll need to meet certain educational requirements, pass a background check, and get licensed. Most states require insurance brokers to have a license, and part of the licensing process involves purchasing a surety bond to ensure financial accountability.

An insurance broker bond is a three-party agreement that protects consumers from unethical business practices and ensures financial accountability. The three parties involved are the obligee (usually a state department of insurance or licensing authority), the principal/obligor (you or your company), and the guarantor (the surety bond broker). This type of bond is purchased by insurance brokers to comply with state licensing requirements.

The bond guarantees that the broker is financially capable of paying any claims and will act in the client's best interests. It protects consumers by ensuring that brokers operate ethically and follow state and local laws and regulations. If a broker engages in unethical practices, such as price manipulation or fraud, the harmed party can file a claim on the bond to be compensated.

The cost of the insurance broker bond varies by state, surety, and the business and credit profile of the broker. Typically, the bond cost is around 1-15% of the required bond amount, which is often $10,000 to $20,000. Bad credit programs are available for those with challenged credit or financial hardships.

Continuing education: Maintain your license with regular courses and stay up-to-date

To maintain your license as a life insurance broker, you must stay up-to-date with the latest changes in the insurance industry. This includes keeping abreast of new insurance laws and policies. Most states require renewals to ensure insurance brokers are current with insurance laws and other industry changes. For example, in California, renewals require a specified amount of continuing education.

To renew your license, you should check with your state licensing board to understand the educational requirements and pay any licensing fees. You can also pursue optional certifications to advance your career and stay on top of new laws and policies. The Certified Professional Insurance Agent (CPIA) Designation is a way to learn new sales and marketing techniques and is open to everyone. However, other certifications, like the Certified Insurance Counselor (CIC) program, require a minimum of two years of full-time industry experience.

You can also maintain your license by pursuing a degree. A bachelor's degree or higher will provide training in relevant business-related fields like marketing and finance. Other subjects like psychology and risk management can improve your communication and sales skills. Most continuing education courses allow you to network, which can help you arrange internships and future jobs.

In addition to the above, you can also consider taking up internships. Although brokers don't typically work for agencies, interning for one can give you a different perspective on the insurance industry. You will learn about different insurance policies, underwriting, and how agents sell insurance, which can be helpful when working with agents in the future.

Frequently asked questions