Getting A Life Insurance License: Is It Challenging?

Getting a life insurance license is no easy feat. The process varies depending on the state, but there are some general requirements that must be met. These include being at least 18 years old, having no fraud or felony charges, and passing a background check. Aspiring life insurance agents also need to complete pre-licensing education, which varies in length and cost depending on the state, and pass a state insurance licensing exam. The exam covers a broad range of topics and is known for being challenging. However, with dedication and a good understanding of the material, it is possible to pass and obtain a life insurance license.

Eligibility requirements

The eligibility requirements for a life insurance license vary depending on the state. Here are the general eligibility requirements that must be met to obtain a life insurance license:

• 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. Some states may also require that you do not have any misdemeanors or outstanding child support payments.
• Financial Standing: You should not owe any federal or state income taxes.
• Background Check: You need to pass a background check, which may include fingerprinting, depending on the state.
• Education: You must have a high school diploma or its equivalent.
• Residency: You may be required to be a resident of the state where you plan to sell insurance for a certain period before taking the licensing exam. Check the specific requirements of your state.
• Pre-licensing Education: Most states mandate a specified number of pre-licensing education hours covering topics such as insurance industry regulations and insurance principles. However, some states do not require pre-licensing education, so check with your state's insurance organization.
• Exam Registration: You must register for the state insurance licensing exam and pay the associated fee, which varies by state.

It is important to note that these are general guidelines, and specific eligibility requirements may differ from state to state. Therefore, it is essential to consult the official website of your state's insurance regulation department for detailed information on eligibility, exam requirements, and the application process.

Pre-licensing coursework

To obtain a life insurance license, you must complete pre-licensing coursework, which is necessary to prepare you for state licensure examinations. Depending on your preference, you can take the subjects online or in a classroom. Each course comes with minimum mandatory hours, and the coursework covers a range of topics, including insurance industry regulations and insurance principles. The number of hours you'll have to complete varies by state.

In California, for example, anyone who wants to be an insurance agent or offer specific insurance products must complete courses and pre-licensing exams associated with those products. For those who want to offer only life insurance, this means applying for a life-only license. LyteSpeed Learning is California's leading provider of pre-licensing classes and exam prep for those seeking a life-only license. They offer a 32-hour mandatory life insurance pre-licensing course, online exam prep videos, and online practice exams.

In addition to life-only licenses, some states offer the option to earn a separate health insurance license, or a combined life and health insurance license. If you want to branch out and sell health insurance policies, you will need to take a health insurance course. However, 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 only need to take the Life & Health Laws and Regulations test.

The cost of pre-licensing courses varies, but generally includes state roster fees and access to course materials for a set period of time. For instance, LyteSpeed Learning's packages range from $139.98 to $460.62 and include 60 days of access to course links from the date of purchase.

State insurance licensure exam

The State Insurance Licensure Exam is the test you take to become a licensed insurance agent. The exam differs depending on the state in which you live. Twenty-five of the fifty United States use the Pearson VUE insurance licensing exam.

The exam is made up of two components: one on general insurance and the other on state-specific knowledge. The tests are usually made up of between 50 and 200 scored multiple-choice questions and must be completed in two to three hours. The passing score is typically 70% in all states, though some states use a scaled system.

The exam covers a broad range of topics, and you will need to prepare thoroughly. The more comprehensive your preparation, the more likely you are to pass. You can take a preparation course to help you learn the state-specific information that may be included in the exam. You can also take practice exams and questions to test your knowledge and determine how well you know the material.

The State Insurance Licensure Exam is challenging, with an average passing rate of 62.9% for life insurance, 60.4% for health insurance, and 64.8% for life and health insurance. However, with adequate preparation, you can increase your chances of passing.

Background check

To obtain a life insurance license, you must pass an exam and meet other requirements, including a background check. The background check process varies by state and, in some cases, includes fingerprinting.

The background check will review your criminal history, including any misdemeanours or felony convictions. It is important to be honest about your entire criminal history, as the insurance company will find out during their background check. Having a criminal record, especially a felony conviction, may make it more difficult and expensive to obtain life insurance. Most life insurance policies require you to wait at least a year after a felony conviction or until your probation period is over.

In addition to your criminal history, the background check will also review your health history, driving record, and other relevant information to determine your eligibility. The scope of the background check will depend on the size of the policy you are applying for.

To be eligible for a life insurance license, you must be free of any fraud or felony charges and not owe any federal or state income taxes. Some states also require that you do not have past-due child support payments.

Application process

The application process for a life insurance license can be broken down into several steps, each of which is outlined below. While the specific requirements may vary depending on the state, the general process remains consistent.

Meet Basic Eligibility Requirements:

Firstly, ensure you meet the minimum requirements to apply for a life insurance license. These may vary by state, but typically include:

• Being at least 18 years old
• Having no fraud or felony charges
• Not owing any federal or state income taxes
• Passing a background check
• Being up to date with child support payments (in some states)

Complete Pre-Licensing Coursework:

The next step is to complete a pre-licensing course to prepare for the state licensure examinations. These courses can be taken online or in a classroom and cover topics such as insurance industry regulations and principles. The number of mandatory course hours varies by state, with Florida, for example, requiring 40 hours of pre-license education, including 3 hours on ethics.

Pass the State Insurance Licensure Exam:

After completing the pre-licensing coursework, you'll need to pass the state licensure exam. The exam may have between 50 and 200 questions and must be completed within 2 to 3 hours. It is proctored, meaning it is supervised. The passing score is typically around 70%, and the results are valid for two years. The cost of each exam attempt can range from $40 to $150.

Apply for Your Life Insurance License:

Once you've passed the exam, you can apply for your life insurance license by submitting an application to your state's department of insurance regulation. There is often a waiting period of at least 48 hours after passing the exam before you can apply. You will need to pay a licensing fee, which varies by state. The insurance regulation department will review your application, and if approved, you can request a copy of your license.

Maintain Your License:

To maintain your life insurance license, you will need to complete a minimum number of continuing education credits during a specified period. For example, in Florida, license holders must take 24 hours of continuing education every two years, including 5 hours covering Florida law and ethics.

Frequently asked questions