Life Insurance Agent: Steps To Start Selling

Life insurance agents sell policies that provide financial benefits to beneficiaries upon the death of the insured. It is a competitive field with a high burnout rate, but it can be a lucrative career for those with the right mindset and work ethic. To become a life insurance agent, you'll need to meet certain requirements, including licensing and educational standards. Here's a step-by-step guide to help you get started:

First, ensure you meet the basic eligibility criteria, which may vary by state. Generally, you must be at least 18 years old, have no fraud or felony charges, be free of tax debts, and have no past-due child support payments. A background check is also typically required.

Second, complete your pre-licensing education. Most states mandate a pre-licensing course with a minimum number of hours to prepare you for the state licensure exam. This course covers insurance industry regulations, types of insurance policies, and insurance principles. The required hours vary by state and the type of insurance license you're pursuing.

Third, pass the state licensing exam. This exam covers state insurance regulations, insurance concepts, specific policies, annuities, tax considerations, and more. The exam format and content may differ by state, so be sure to review your state's requirements.

Fourth, submit your license application. This typically involves completing the application, paying the associated fee, providing electronic fingerprints, and submitting any other required documentation. A background check is also part of the licensing process.

Finally, once you've obtained your license, you can start applying for jobs in the life insurance field. Remember to research potential employers thoroughly and consider factors such as company reputation and ratings from agencies like Moody's and Standard & Poor's.

Research the licensing requirements for your state

To sell life insurance, you must obtain a license. The requirements for this vary from state to state, so it's important to research the specific rules for your state.

In some states, you must take a pre-licensing class with a minimum number of hours before taking an exam, while other states require only that you pass the exam. For example, Kentucky requires those seeking a life insurance license to complete a 20-hour prelicensing course before taking the state licensing exam. On the other hand, Texas and Virginia do not require a pre-license education course, instead relying on the licensing exam to demonstrate your professional knowledge.

In addition to passing the exam, you will also need to undergo a background check and submit your fingerprints in most states. You can find directions for scheduling your fingerprinting appointment in the same place that you find the insurance license application, typically a state agency or department.

The cost of fingerprinting typically ranges from $35 to $75. Some states work with law enforcement agencies to provide electronic fingerprinting as an option.

The application process will also require you to pay various fees. For example, in Kentucky, there is a $40 application fee, a $5.60 service charge, and a $50 exam fee.

It's important to note that the requirements may differ depending on whether you are seeking a license to sell life insurance only or if you want to be licensed to sell life and health insurance.

Complete pre-licensing education

To become a life insurance agent, you'll need to complete pre-licensing education. This is the first step towards getting a life insurance license in most states. The number of hours of pre-licensing education required varies by state, from 20 hours in California to 40 hours for a joint life, accident, and health license. Some states, like Texas and Virginia, don't require a pre-licensing course, but you'll still need to pass the state life insurance exam.

Pre-licensing education courses are typically offered by third-party organizations and cover topics such as insurance industry regulations, different types of insurance policies, and insurance principles. The courses can be taken online or in a face-to-face classroom setting. The cost of these courses varies, but they are usually paid for by the employer if you've already been hired.

It's important to note that the licensing requirements for life insurance agents vary depending on the state in which you intend to sell insurance. Therefore, it's recommended to check with your state's insurance department or commission website for specific information on pre-licensing education requirements.

Pass the state licensing exam

Passing the state licensing exam is a crucial step in becoming a life insurance agent. The exam is not easy, and many people fail on their first try, but adequate preparation can play a large role in helping you pass. Here are some tips to help you prepare for and pass the state licensing exam:

• Complete pre-license education requirements: Before taking the state licensing exam, you must complete a pre-licensing education course. The required number of hours varies by state. For example, California requires 20 hours of pre-license education for a life insurance license, while a joint life, accident, and health license require 40 hours. Some states, like Texas and Virginia, do not require a pre-license education course, but you will still need to pass the state licensing exam.
• Understand the exam format and content: The state licensing exam typically covers state insurance regulations, general insurance concepts and terms, specific policies applicable to life insurance (underwriting, setting up a policy, policy provisions, options, riders, etc.), annuities, tax considerations, and requirements to maintain an insurance sales agent license. The exam consists of multiple-choice questions, with no fill-in or essay questions. It is important to note that the exam content can vary by state, so be sure to check with your state for a copy of the exam content outline.
• Utilize preparation courses and study materials: Preparation courses and study materials, such as Kaplan's online courses, can provide you with the tools and knowledge needed to pass the state licensing exam. These courses are tailored to your state, so ensure you register for the state in which you intend to be licensed. Additionally, you can find study materials and practice exams online or in books to help you prepare.
• Follow a structured study plan: Create a strict schedule and maintain focus and discipline during your exam preparation. Watch lectures, highlight key concepts, review test bank questions, and seek help if needed.
• Be aware of state-specific requirements: The state licensing exam will include a "`national`" insurance section and a "state" section. The state portion of the exam tends to cover trivial details relating to complicated state regulations and can be very detailed and challenging. Therefore, it is crucial to focus on state-specific information during your exam preparation.
• Know the passing score: In most states, you need a score of 70-75% to pass the exam. However, keep in mind that each exam consists of two parts – the national and state sections – and the passing score may vary slightly between them.

Apply for your insurance sales license

To apply for your insurance sales license, you'll need to meet the licensing requirements in your state. This typically involves the following steps:

Complete Pre-Licensing Education

Most states require you to complete a pre-licensing education course before pursuing your insurance license. This course will help prepare you for the licensing exam and is typically offered online through a third-party financial education company. The required hours vary by state, ranging from 20 to 40 hours. However, some states do not require a pre-license education course and rely solely on the licensing exam to assess your professional knowledge.

Complete a License Application

Once you have completed the required pre-licensing education, you can fill out the application for your insurance sales license. It is important to be thorough and accurate in your application. Make sure to disclose any relevant information, such as a criminal record, as it will be subject to a background check. The application is usually available online through the state's Department of Financial Services, Department of Insurance, or State Corporation Commission.

Get Fingerprinted and Complete a Background Check

Due to the sensitive nature of a life insurance agent's work, states require fingerprinting and a background check as part of the licensing process. You can find information on scheduling your fingerprinting appointment on your state's insurance license application website. The fingerprinting fee is typically paid by the applicant and ranges from $35 to $75.

Take the Licensing Exam

After completing the above steps, you will need to pass the state licensing exam. This exam covers state insurance regulations, general insurance concepts, specific policies related to life insurance, annuities, tax considerations, and more. Preparing for this exam by taking a pre-license education course or utilizing other study materials is highly recommended.

Application Review and License Issuance

Once you have completed all the required steps, your application will be reviewed along with your background check. This process can take a few days to several weeks, depending on the state. After a successful review, you will receive your insurance sales agent license, which you can print and save electronically. Keep your license number and National Producer Number (NPN) handy when applying for jobs.

Consider additional licenses to sell other types of insurance

Once you are a licensed life insurance agent, you may want to expand your practice by obtaining additional licenses to sell other types of insurance. This is especially true if you live in an area where you will be selling insurance in multiple states, as each state has its own licensing requirements.

There are several other types of insurance that you can sell, each with its own license:

• Health insurance: Selling medical, disability, Medicare supplement, and long-term care policies.
• Property insurance: Selling homeowner, commercial property, and inland marine policies.
• Casualty insurance: Selling auto, workers' compensation, crime coverage, and professional liability policies.
• Variable products insurance: Selling insurance products with an investment element. This type of insurance requires certain securities licenses.
• Personal lines insurance: Selling products like auto insurance, homeowners insurance, renters insurance, and policies for boats, motorcycles, and snowmobiles to individual consumers.

In addition to these common types of insurance, you can also become an adjuster, which involves investigating and adjusting claims on an insurance policy. Adjusters also solicit for the adjustment business.

It's important to note that the requirements for obtaining these additional licenses may vary depending on your state. Be sure to research the specific requirements for your state before pursuing any additional licenses.

Frequently asked questions