Life Insurance Agent: Steps To Start And Succeed

Life insurance agents sell policies that provide financial benefits to beneficiaries upon the death of the insured person. To become a life insurance agent, you must obtain a license, which involves several steps. First, you must meet the basic eligibility requirements, including being at least 18 years old and having no fraud or felony charges. Next, you must complete pre-licensing education, which varies by state but typically covers insurance industry regulations, different types of insurance policies, and insurance principles. After that, you'll need to pass the state licensing exam, which covers state insurance regulations, general insurance concepts, and specific policies. Once you've passed the exam, you can submit your license application, which includes a background check and fingerprinting. Finally, stay on top of any continuing education requirements to maintain your license.

Research the licensing requirements for your state

The requirements to obtain a license to sell life insurance vary from state to state. In general, aspiring life insurance agents must meet the following criteria:

• Be at least 18 years old
• Be free of any fraud or felony charges
• Not owe any federal or state income taxes
• Be able to successfully complete a background check
• Not have past-due child support payments (required in some states)

In addition to meeting these basic eligibility requirements, most states require prospective life insurance agents to complete pre-licensing education. This typically involves taking a course that covers insurance industry regulations, insurance principles, and other relevant topics. The number of hours required for pre-licensing education varies by state and can range from 20 to 90 credit hours for life insurance. Some states, like Texas, do not require pre-licensing courses, but it is the responsibility of the applicant to study for the state licensure exam.

After completing any required pre-licensing education, individuals must pass a state licensing exam. This exam typically covers both general insurance product knowledge and specific insurance laws, rules, regulations, and practices that are unique to the state. The exam may be taken remotely or in person, and it usually consists of multiple-choice questions. The passing score is generally around 70%, and the cost to take the exam can range from $20 to $150.

Once individuals have passed the state licensing exam, they can apply for their license by submitting an application and paying a fee, which is typically around $50 but can vary by state. The application process may also involve a background check and fingerprinting. The entire process of obtaining a life insurance license can take anywhere from two to eight weeks.

It is important to note that life insurance licenses typically need to be renewed every two years and may require continuing education credits during this period.

Complete pre-licensing education

To become a life insurance agent, you need to obtain a life insurance license. This requires passing a state licensing exam and meeting all other application criteria. The specific requirements vary by state, so it is important to check with your state's insurance department for the most accurate and up-to-date information. However, here is a general overview of the pre-licensing education requirements:

Most states require completion of a pre-licensing education course to prepare for the state licensure exam. This course can be taken online or in a classroom setting and covers a range of topics, including insurance industry regulations, different types of insurance policies, and insurance principles. The required number of hours for the course varies by state and the type of insurance license you are seeking. For example, in California, you must complete 20 hours of pre-license education for a life insurance license, while a joint life, accident, and health license require 40 hours. Some states, such as Texas and Virginia, do not require a pre-license education course, but you will still need to pass the state licensing exam.

It is recommended to use a structured study course to prepare for the licensing exam, even if it is not required by your state. Kaplan's online courses are a popular choice, with an impressive 93% pass rate among students. Other recommended options include AD Banker and Kaplan Education Company, which offer pre-licensing exam prep courses and resources such as web classes, flashcards, and study manuals.

In addition to the pre-licensing education, you will also need to meet other eligibility requirements, such as being at least 18 years old, having a high school diploma or GED, and successfully completing a background check. Once you have completed the necessary education and met the eligibility criteria, you can proceed with the licensing process, including submitting your license application and taking the state licensing exam.

Pass the state licensing exam

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

Understand the Exam Format and Requirements:

Before you begin preparing for the exam, it is essential to understand the format and requirements. The state licensing exam for life insurance agents typically covers state insurance regulations, general insurance concepts and terms, and specific policies related to life insurance. This includes topics such as underwriting, setting up policies, policy provisions, options, and riders, tax considerations, and the requirements to maintain a life insurance sales agent license.

The exam is usually in a multiple-choice format and is taken on a computer. The number of questions and the time allotted for the exam may vary by state. For example, in Rhode Island, the Life Producer exam is 2 hours long with 90 questions, while the Accident & Health Producer exam is also 2 hours long but with 90 questions.

Complete Pre-License Education:

Most states require you to complete a pre-licensing education course before taking the state licensing exam. This course will help you gain the necessary knowledge to pass the exam. The required hours for the course may vary, with some states mandating 20 hours of pre-license education for a life insurance license, while others require 40 hours for a joint life, accident, and health license. You can usually complete these courses online or in a classroom setting.

Study and Prepare for the Exam:

Create a study plan and dedicate sufficient time to prepare for the exam. You can enrol in an exam preparation course, use study materials available online or in books, or take practice exams. Focus on understanding the concepts rather than memorizing, as the exam will likely test your comprehension of insurance regulations and policies.

Schedule and Take the Exam:

Each state has its own process for scheduling the state licensing exam. In some states, you may need to schedule it through the state's insurance regulation department or a third-party testing provider. There may be an exam fee associated with each attempt, so it is essential to be well-prepared before taking the test.

On the day of the exam, ensure you arrive at the testing centre on time and bring any required identification and documentation. During the exam, carefully read and follow the instructions, and manage your time effectively to complete all the questions within the allotted time.

Exam Results and Next Steps:

After completing the exam, you will typically receive a pass or fail notification immediately. If you pass, you can proceed to the next steps in the licensing process, such as applying for your license and completing a background check. If you fail, don't get discouraged. Many states allow you to retake the exam multiple times, with a short waiting period between attempts. You can use this time to review the areas where you struggled and improve your understanding before trying again.

Submit your license application

Once you have passed the state licensing exam, you can submit your license application. This is done through the National Insurance Producer Registry (NIPR) and there is an associated application fee (around $50 but varying by state). You will need to submit your application within a certain time frame after passing the exam, usually one or two years.

Some states will require an electronic fingerprint to be submitted with your application, to be used for a background check. This can be obtained through a third-party company, which you will pay directly, and costs between $35 and $75. Some states will also allow you to use law enforcement agencies to provide electronic fingerprinting.

You will also need to submit your exam results with your application. The testing centre will automatically send your results to the relevant state agency, but you should double-check that this has been done.

The review process can take up to several weeks, and you will be notified if there are any issues with your application. Once your application has been reviewed, you will be sent your license, which you can print out.

Get fingerprinted and complete a background check

To become a life insurance agent, you will need to complete a background check and get fingerprinted. This is a mandatory requirement for almost all licenses, registrations, and certifications. Fingerprinting and background checks are important because they help ensure that insurance providers can be trusted with consumers' sensitive information. While requirements vary by state, here is a general overview of the process:

Background Check

The background check will involve a criminal history record check, which will be conducted by running your name through state databases to check for any pending litigation or criminal history. This process may also include searching local databases, such as county or municipal court records, and national registries accessible by the FBI. The background check can reveal important information such as criminal history, misdemeanors, or other crimes that may otherwise have been missed or unreported by the applicant.

Fingerprinting

Fingerprinting is a more comprehensive method of background checking as fingerprints can be scanned against the FBI's Criminal Database, providing a more detailed criminal history. This process is often required for initial licensing and may need to be repeated for the acquisition of new lines of authority.

Combined Process

Some states may require both fingerprinting and a background check, while others may only require one or the other. The specific requirements depend on the state in which you are applying for a license, so be sure to check the relevant state's insurance department website for detailed information.

Submission Methods

There are typically two methods for submitting fingerprints: LiveScan, which is electronic submission, and Fingerprint Cards, which are submitted by mail. LiveScan results are typically processed faster. The cost for fingerprinting services can range from $49.50 to $50.75, plus local sales tax.

Additional Considerations

Keep in mind that the background check and fingerprinting process can take time, generally around three to five weeks. If something comes up during the background check, the reviewing department may contact you for clarification, which can further slow down the process.

By completing the background check and fingerprinting requirements, you are taking the necessary steps to ensure you meet the standards of trustworthiness and professionalism expected of a life insurance agent.

Frequently asked questions