Becoming A Licensed Life Insurance Agent: Steps To Take

Life insurance agents sell policies that cater to the unique needs of their clients and help them provide financial safety nets for their families. In the US, every state requires life insurance agents to carry a valid license. The requirements for obtaining a license vary depending on the state, but the process generally involves completing pre-licensing education, passing a state exam, submitting an application, and complying with continuing education requirements. Obtaining a life insurance license can be a rewarding career choice, offering flexibility and strong earning potential.

Meet basic eligibility requirements

To sell life insurance, you must be licensed by your state's insurance regulation department. Each state has its own set of basic eligibility requirements that aspiring life insurance agents and brokers must meet to secure a life insurance license. While these requirements vary depending on the state, here is a general overview:

Age

In most states, you must be at least 18 years old to apply for a life insurance license. This is the minimum age requirement to enter the profession.

Criminal Record

To be eligible for a life insurance license, you must be free of any fraud or felony charges. A background check is typically required as part of the licensing process to ensure applicants meet this criterion.

Financial Standing

Aspiring life insurance agents and brokers must also be in good financial standing. This includes not owing any federal or state income taxes and ensuring that all child support payments are up to date. These requirements demonstrate financial responsibility and trustworthiness when handling clients' financial matters.

Education

While a college degree is not required to sell life insurance, a high school diploma or GED is necessary to earn your insurance license. Additionally, some insurance companies may prefer candidates with a bachelor's degree in a related field, such as business or marketing.

Furthermore, pre-licensing coursework or education is typically mandated by states. These courses cover essential topics such as insurance industry regulations, insurance principles, state rules and regulations, insurance applications, and policy exclusions. The required hours for these courses vary by state, ranging from a one-day class to several weeks of online training.

Additional Requirements

Some states may have unique additional requirements. For example, fingerprinting and citizenship requirements are specified for Florida residents. It is important to review your specific state's licensing requirements to ensure you meet all the necessary criteria.

Complete pre-licensing coursework

To sell life insurance, you must be licensed, and each US state has its own licensing requirements. Before you can take your licensing exam, you'll need to complete pre-licensing coursework. This will prepare you for the state licensure exam and is a mandatory requirement.

The pre-licensing coursework can be taken online or in a classroom. Each course will have a minimum number of mandatory hours, and the topics covered will include insurance industry regulations and insurance principles. Some states will require a certain number of credit hours to be completed.

In California, for example, anyone who wants to be an insurance agent or sell specific insurance products must complete courses and pre-licensing exams associated with those products. To sell life insurance in California, you need to apply for a Life Only License. This will allow you to sell life insurance, fixed annuities, and indexed annuities. There are various packages available that meet the requirements, including mandatory life insurance pre-licensing courses, online exam prep videos, and online practice exams.

Some states require a background check and fingerprinting as part of the pre-licensing requirements. You may also need to apply for a license before taking your exam.

Pass the state insurance licensure exam

Passing the state insurance licensure exam is a crucial step in becoming a licensed life insurance agent. Here are some detailed instructions to help you prepare for and pass this exam:

Understand the Exam Format and Content:

The state insurance licensure exam typically consists of multiple-choice questions, covering a broad range of topics. The exam is designed to test your knowledge of life insurance products, procedures, and state regulations. It is important to familiarize yourself with the exam format and the specific content outline provided by your state.

Complete Pre-Licensing Coursework:

Before taking the exam, it is mandatory to complete pre-licensing coursework, which can be done online or through classroom instruction. This coursework covers essential topics such as insurance industry regulations, insurance principles, and health insurance (if you plan to branch into selling health insurance policies). Make sure to put in the required number of hours and thoroughly understand the material to prepare for the exam effectively.

Develop a Study Plan:

Creating a structured study schedule is vital for exam success. Consider your professional and personal commitments, and allocate specific blocks of time each day for studying. It is recommended to spend a couple of hours daily on your pre-license education, along with additional time for practice questions and tests. This disciplined approach will help you master the material before the exam.

Utilize Practice Questions and Mock Exams:

Spend dedicated time answering practice questions and taking mock exams. The more you engage with practice material, the better your understanding of the exam content. Mock exams also help you become familiar with the exam format and improve your time management skills.

Take Care of Yourself Before the Exam:

In the week leading up to the exam, maintain a healthy balance. While studying is important, avoid overwhelming yourself with excessive cramming. Get plenty of rest, eat nutritious meals, and engage in physical activity to stay energized and focused.

Know What to Bring to the Exam:

On the day of the exam, arrive at the testing center at least 30 minutes early. Bring the required identification documents, including a valid ID with your photo and signature. Typically, you will need one form of ID with a photo and another with your signature.

Exam Day Procedures:

The state insurance licensure exam is a proctored computer test, conducted in a quiet, monitored environment. You will be given between one and two hours to complete the exam, which usually consists of 50 to 100 multiple-choice questions. Remember to read and follow the instructions carefully, and reach out to the proctor if you have any questions or concerns.

Understand the Passing Score:

To pass the state insurance licensure exam, you typically need to achieve a score of at least 70%. The passing score may vary slightly depending on your state, so be sure to check the specific requirements for your location.

Results and Next Steps:

After completing the exam, you will receive an official score report indicating whether you passed or failed. If you pass, your score will be reported to your state and added to your life insurance license application. If you don't pass, don't lose hope. Use the feedback on your weak areas to guide your future studies, and consider taking a live online study course to improve your chances of success on your next attempt.

Apply for your life insurance license

Congratulations! You've passed the exam—now it's time to apply for your life insurance license. The process can vary slightly depending on your state, but here's a general guide on what to expect.

First, you'll need to submit your license application to your state's department of insurance regulation. It's recommended to wait at least 48 hours after passing the licensure exam before applying. You can usually fill out the application form online on the state department's website. Don't forget that you'll also need to pay a licensing fee, which differs between states. If you're applying for a health insurance license as well, you'll typically need to pay a separate fee for that.

The insurance regulation department will then review your application. There is no standard timeframe for this process, as each application is treated individually. If there are any issues with your background check, the department may contact you for clarification, which can cause delays.

You can check the status of your application through the department's website. Once your application is approved, you can request a copy of your life insurance license. Keep in mind that some departments don't mail printed licenses, so you may need to download and print your license yourself.

If there are delays in processing or if your application is rejected, you can contact the department for clarification.

The entire process of getting a life insurance license can take anywhere from two to eight weeks, depending on your pace. This timeframe includes completing your pre-licensing coursework and studying for the state licensure exam.

Once you obtain your life insurance license, don't forget that you'll need to fulfil continuing education requirements to maintain your license. This typically includes taking a minimum of 24 hours of continuing education credits during a two-year term, including ethics training.

Comply with continuing education requirements

Continuing education is a crucial aspect of maintaining your life insurance license and ensuring you can serve your clients to the best of your abilities. Each state has different guidelines for earning continuing education (CE) credits, but most allow you to take CE courses online at your own pace, while some require classroom instruction.

To maintain your life insurance license, you must meet the CE requirements within each renewal period. Most insurance agent licenses are valid for two years, although some states have three or four-year validity periods. You will typically need to complete 24 hours of training every two years, including two to three hours of ethics training. Some states mandate that a certain number of these hours be dedicated to insurance law and regulatory changes.

If you complete excess hours during a renewal period, some states will allow you to carry over the credits to the next cycle. This is especially useful if you plan to sell life insurance in multiple states, as almost all states are signatories of the NAIC's continuing education reciprocity agreement (CER), which allows them to recognize courses completed in other member states.

The internet offers a plethora of CE course providers, covering various topics relevant to your line of work. To find the right courses, you should check your state's requirements and assess your training needs. Most state insurance departments provide an online tool to help you track your CE credits and see how many hours you have left to complete.

While the time it takes to finish your CE credits depends on several factors, such as the number of credit hours required and the topics covered, you can generally complete the courses at your own pace, whether you choose online or in-person classes.

Frequently asked questions