Orlando Harmon
Becoming a licensed insurance agent can be a rewarding career choice, offering flexibility and the opportunity to work with a diverse roster of clients. While the requirements to become an insurance agent vary by state and type of insurance, there are some general steps that can help you get started on this career path. First, you'll need to decide between becoming a captive agent, who works exclusively for one company, or an independent agent, who represents multiple insurance companies. Next, you'll need to meet the basic eligibility requirements, which typically include being at least 18 years old and completing pre-licensing education specific to your state and chosen line of authority. After that, you'll need to pass the state insurance licensing exam and a background check. Once you've obtained your license, you can start prospecting for clients and marketing your agency.
| Characteristics | Values |
|---|---|
| License | Required for all professionals selling policies; obtained from the insurance regulation department of the state where policies will be sold |
| License type | General lines (life, accident, health), General lines (property, casualty), All lines adjuster |
| License duration | Temporary licenses last 6 months (can be extended up to 15 months); regular licenses need to be renewed with 24 hours of continuing education every 2 years |
| Basic requirements | 18 years old; prelicensing education (hours vary by state); pass state insurance licensing exam; pass background check |
| Additional requirements | Varies by state and company; some require no past-due child support |
| Post-license | Prospect for clients, market agency, secure commercial insurance for own agency |
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What You'll Learn
Choose a specialisation
When choosing a specialisation, it is important to consider your educational qualifications and interests. There are several common insurance specialisations to choose from, including:
Health Insurance
Health insurance agents sell policies that cover some or all of the costs of medical care. This can include dental insurance and short- and long-term disability insurance.
Life Insurance
Life insurance agents specialise in selling policies that pay beneficiaries when a policyholder dies. They also sell annuities, which require the policyholder to make a series of payments in exchange for regular disbursements.
Property and Casualty Insurance
Property and casualty insurance agents sell policies that protect people and businesses from financial loss resulting from events such as automobile accidents, theft, or damage to property. For businesses, this can also include claims related to workers' compensation, product liability, and medical malpractice.
Long-term Care Insurance
Long-term care insurance agents help insured individuals plan for future long-term care services such as assisted living facilities and nursing homes.
General Insurance
General insurance agents handle different types of contracts, including car insurance, home insurance, life insurance, and supplementary health insurance. They are appointed by an insurance company to represent it in a given geographical area and act as brokers, marketing and managing insurance policies.
In addition to the above specialisations, insurance agents may also function as generalists, providing multiple products. It is also common for agents to become licensed to sell other financial products, such as mutual funds and securities.
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Check state requirements
The requirements to become a licensed insurance agent vary depending on the state in which you live and the area you plan on servicing. Therefore, it is important to check the specific requirements of your state.
In general, to become a licensed insurance agent, you will need to meet certain education, exam, and licensing requirements. Most states have a department of insurance that regulates insurance and provides information on the licensing rules and requirements. You can usually find the relevant information by searching for the insurance licensing rules on your state's official website. Many state insurance websites also provide handbooks that outline the specific requirements for becoming a licensed insurance agent in that state, including the number of education hours needed, exam registration and locations, and the process for obtaining your license.
For example, in Georgia, you must meet specific requirements that vary depending on the category or class of insurance you wish to sell. The Georgia Insurance Licensing Candidate Handbook provides detailed information on licensing, prelicensing, application requirements, exams, licensing fees, and more. Additionally, Georgia requires applicants to complete a Citizenship Affidavit and submit a copy of an acceptable form of identification.
Another example is Texas, where there are three common types of licenses: General lines – life, accident, and health; General lines – property and casualty; and All lines adjuster. Each type of license allows agents to sell different types of insurance, and most require passing an exam.
It is important to note that some states, like California, may have exemptions from certain requirements, such as continuing education for licensees over 70 years of age who have been in good standing for 30 continuous years. Additionally, some states offer temporary licenses that are valid for a limited period and cannot be renewed. These temporary licenses may require sponsorship from a licensed insurer or agent and can be a pathway to obtaining a regular license.
Therefore, it is essential to thoroughly research the specific requirements of your state before beginning the process of becoming a licensed insurance agent.
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Complete pre-licensing education
To become a licensed insurance agent, you must complete pre-licensing education. This is an important step in the process and will help you gain the knowledge and skills needed to sell insurance policies. The requirements for pre-licensing education vary by state, so it is important to check the specific requirements for the state in which you plan to sell insurance. Most states require individuals to complete a certain number of hours of pre-licensing education, which can be done through online courses or in a classroom setting. This is also known as pre-licensing coursework.
The number of hours required for pre-licensing education varies by state and can range from a few weeks to a few months. Some states may also require individuals to pass an exam at the end of their pre-licensing education. It is important to check the specific requirements for the state in which you plan to sell insurance policies. The cost of pre-licensing education may also vary depending on the state and the provider.
During your pre-licensing education, you will learn about the different types of insurance, including life insurance, health insurance, property insurance, and casualty insurance. You will also learn about the regulations and compliance standards that govern the insurance industry. This education will prepare you for the state licensure exam that you must pass to become a licensed insurance agent.
In some states, you may be able to waive the pre-licensing education requirement if you have certain designations or licenses from another state. For example, if you hold a CLU or FLMI designation, you may be able to waive the pre-licensing course and examination. Additionally, if you are already licensed in another state and have an active license, you may be able to apply for a waiver when moving to a new state.
Overall, completing pre-licensing education is an important step in becoming a licensed insurance agent. It will provide you with the knowledge and skills needed to sell insurance policies and protect your clients. By understanding the specific requirements for your state, you can ensure that you are on the right path to a successful career in the insurance industry.
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Pass state exam and background check
To pass the state exam and background check, you must first meet the basic requirements to be eligible for a license. This includes being at least 18 years old, which is the minimum age to apply for a license in most states. Some states may also require insurance agents to not have any past-due child support to qualify for a license.
Next, you must complete pre-licensing education for your line of authority, which is determined by each state. The number of hours you'll need to complete and the cost varies by state. You can take the course online or in a classroom setting. After completing your pre-licensing education, you can then proceed to register for the state licensure exam. Each state website will provide information on how to register for the exam, where to go for the exam, and how you'll get your score. You can also make use of exam preparation packages to help you pass the exam.
Once you have passed the state exam, you will need to pass a background check. This may include completing a Sponsoring Insurer/Agent Certification Form, a Citizenship Affidavit, and providing a copy of an acceptable form of ID.
After passing the state exam and background check, you will need to wait about one to two weeks for your license to be issued.
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Prospect for clients
Once you have your licence, you can start prospecting for clients. Many agents begin by writing their own insurance and prospecting to friends and family. This is a great way to get a feel for how the systems work and become comfortable quoting new coverage.
Social Media
Staying active on social media is a great way to prospect for clients. You can use platforms like LinkedIn to establish yourself as an insurance authority. Share valuable insights and tips related to topics your prospects care about, such as life stages and risk mitigation. You can also use social media to organically connect with potential insurance leads and build relationships over time. When a connection mentions a life event, such as buying a new home, you can offer congratulations and mention upcoming advice on relevant insurance. This can smoothly transition into a sales conversation.
Direct Mail
Direct mail sales letters can still be an effective prospecting tool, but only if you can guarantee that recipients will read them. You have mere seconds to capture someone’s attention, so craft your letters with a compelling narrative that gets to the heart of your offering. Inject creativity and personality into your letters, using language that resonates with your target audience.
Referrals
You can ask your best customers to refer people to you. Be sure to send a small gift or thank you to those who do. You can also incentivize partners to refer prospects your way by offering a commission for each sale. This collaborative approach can be incredibly effective in generating quality leads, as the customers you acquire will already be familiar with your partner’s services and have a certain level of trust in them.
Phone Calls
92% of all customer interactions happen over the phone, so you've got to pick up the phone and dial every day. You're generally more likely to reach clients in the early evening and on Saturday mornings. It’s also important to call as soon as you get a lead.
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