Life Insurance Instructor: Steps To Become One

Life insurance agents sell policies that provide financial support for families after the policyholder's passing. It is a highly competitive industry, and agents are typically paid on commission, meaning they need to be resilient in the face of frequent rejection. While there are no formal education requirements, a strong background in sales is beneficial, and agents must pass a state-administered exam and complete a licensing course. This paragraph provides an overview of the key aspects of becoming a life insurance instructor, including the role's challenges, requirements, and potential rewards.

Pre-licensing education

To become a life insurance instructor, you'll need to complete pre-licensing education, which is the first step towards getting a life insurance license in most states. This will help prepare you for the state licensure exam. While some states like Texas and Virginia don't require pre-licensing courses, it's still highly recommended that you take a structured study course to prepare for and pass the exam on your first attempt.

• Life insurance: 20 credit hours
• Health insurance: 20 credit hours
• Life, accident, and health (LA&H) insurance: 40 credit hours
• Property and casualty (P&C) insurance: 90 credit hours
• Personal lines insurance: 40 credit hours

You can take courses in more than one line of authority, allowing you to branch out and sell policies in multiple insurance lines. The courses are designed to be flexible, helping busy professionals fit studying around other commitments such as work and family.

After completing your pre-licensing education, you'll need to schedule and take the state licensure examination. These exams are divided into two categories: Life, Accident, and Health; and Property and Casualty. Each exam consists of 50 to 200 items and must be completed within two to three hours. Passing scores vary by state but generally require getting at least 70% of the answers correct.

License application

Once you have completed your pre-licensing education, you can move on to the license application. This is the second step towards getting a life insurance license.

You can submit your application to your state's insurance regulation department. Wait a few days after the test results have been released to allow the department to process the results.

• License application fee (around $50 but varies by state)
• Electronic fingerprint (required by some states for the background check)
• Valid test results

Exam results are valid for one or two years, depending on the state. This means you must apply for your life insurance license during this period. If you fail to do so, you will need to retake and pass the licensure test.

Your state's insurance department will review your license application and conduct the background check. The process can take anywhere from three to five weeks. If something comes up in the background check, the department may contact you to clarify. This can slow down the process.

The department will also inform you of the status of your application through email. Here’s what you need to remember once you receive your insurance license:

• Your life insurance license is valid for two years.
• Some licenses require 24 hours of continuing education (CE) to be eligible for renewal.
• CE must include three hours of ethics-related training.
• At least half of the CE credits must be taken in a classroom.

Fingerprinting and background check

Fingerprinting

Fingerprinting is typically completed by a third-party company, and the applicant pays the fingerprinting fee, which usually ranges from $35 to $75. Some states work with law enforcement agencies to provide electronic fingerprinting as an option.

Background checks

Background checks are a crucial part of the licensing process for life insurance instructors. Most states will run a basic state-level background check, checking for criminal history and pending litigation.

Some states, such as Texas, require a fingerprint background check from IdentoGO, and a copy of the receipt must be sent to the relevant state department. However, some individuals may be exempt from this requirement, as outlined in the Texas Administrative Code.

It's important to note that having a criminal record does not automatically disqualify you from obtaining a life insurance instructor license. However, failing to disclose this information on your application will impact your approval.

The background check process can take several weeks, and if any issues arise, the relevant department may contact you for clarification, which can further slow down the process.

Passing the licensing exam

Know the Exam Format and Content:

The life insurance licensing exam typically covers state insurance regulations, general insurance concepts and terminology, specific policies related to life insurance (such as underwriting, setting up policies, policy provisions, options, and riders), annuities, tax considerations, and the requirements for maintaining an insurance sales agent license. The exam consists of 50 to 200 questions and has to be completed within two to three hours. The passing score varies by state but is generally around 70%.

Complete Pre-Licensing Education:

Before taking the exam, it is essential to complete pre-licensing education or coursework. This step is mandatory in most states and helps you prepare for the exam. The number of credit hours required varies, but for life insurance, it is typically around 20 credit hours. You can take these courses online or in a traditional classroom setting. They cover various topics, including insurance industry regulations, different types of insurance policies, and insurance principles.

Study Strategies and Practice:

Create a study plan and dedicate sufficient time to prepare for the exam. Utilize recommended study resources, such as Kaplan's online courses, which have a high pass rate. Take advantage of practice quizzes and exams to familiarize yourself with the exam format and types of questions. Review the exam content outline provided by your state to tailor your preparation accordingly.

Understand State-Specific Requirements:

Remember that insurance licenses are state-specific, so ensure you are registering and preparing for the exam in the state where you intend to be licensed. Each state may have slightly different exam content, so tailor your studies accordingly. If you plan to be licensed in multiple states, you will need to complete the licensing process for each state.

Schedule and Prepare for the Exam:

Schedule your exam at least 24 hours in advance through your state's insurance regulation department. On the day of the exam, arrive with the necessary documents, including your certificate of completion for pre-licensing education, proof of payment for the testing fee, and government-issued photo identification.

By following these steps and staying dedicated to your goal, you will be well on your way to passing the licensing exam and becoming a life insurance instructor.

Sales skills and mindset

Selling life insurance is a challenging career path that is not for the faint-hearted. It requires a particular mindset and a set of skills to be successful.

Firstly, it is important to understand that selling life insurance is a highly competitive field with a high burnout rate. More than 90% of new agents quit within the first year, and this rate increases to over 95% at the five-year mark. This is largely due to the difficulty in making a living from the job, as most life insurance sales jobs are commission-only with no base salary or benefits. This means that you could work a full week and not receive any pay if you don't make a sale. Therefore, a life insurance instructor needs to instil in their students the resilience and perseverance necessary to handle this pressure.

Secondly, the product itself is a hard sell. People generally do not like to think about their own mortality, so even getting a prospect to acknowledge and discuss the fact that they are going to die can be a challenge. Life insurance also does not offer any instant gratification, unlike other products such as cars or electronics. This makes it even more important for life insurance agents to be skilled communicators who can create a sense of urgency and tailor their pitch to the client's needs. Instructors should focus on teaching students how to communicate the benefits of life insurance effectively, emphasising its importance on the same level as stocks and bonds. Role-playing and practising delivering product explanations can be a useful training technique.

Thirdly, rejection is a huge part of the job, and a successful life insurance agent must be able to embrace it. Cold-calling and door-knocking are common tactics, and hearing "no" is far more common than hearing "yes". A good instructor should prepare their students for this reality and teach them to view rejection as a stepping stone to success.

Finally, a successful life insurance agent must have a passion for helping others. While the potential for high earnings is a major drawcard for many, the most important skill, according to industry expert Peter Roberts, is "having a heart of service". A life insurance instructor should emphasise this aspect of the job and encourage students to focus on building relationships and serving others rather than solely on making money.

Frequently asked questions