Becoming An Insurance Salesman: A Guide To Success

Becoming an insurance agent or salesman is a career path that offers flexibility, diverse clients, and significant growth opportunities. While the requirements to become an insurance agent vary by state, they can often be completed faster than other licensed professions. In general, becoming a successful insurance agent requires a combination of education, licensing, ongoing training, networking, and dedication to serving your clients. This article will provide a comprehensive overview of the steps needed to become an insurance agent, including the different types of insurance agents, the training and licensing requirements, and tips for finding and maintaining clients.

Choose a speciality: property, casualty, life, health, auto, liability, etc

When it comes to choosing a speciality in the insurance industry, there are several options available, each with its own unique focus and scope. Here's an overview of some of the common specialities:

Property and Casualty Insurance

Property and casualty insurance is an umbrella term encompassing various forms of insurance. This includes homeowners insurance, renters insurance, auto insurance, and powersports insurance. The key coverage types within this speciality are liability coverage and property protection coverage. Property and casualty insurance agents help clients manage risks related to damage or loss of property, including vehicles, homes, or businesses. They also provide liability coverage for negligent acts or omissions that may result in financial losses for their clients.

Life Insurance

Life insurance agents specialise in selling policies and annuities that provide financial benefits to beneficiaries upon the death of the insured. This type of insurance is a common speciality, as it is a fundamental aspect of financial planning for individuals and families.

Health Insurance

Health insurance agents assist individuals and businesses in finding suitable health insurance plans within their budgets. They sell medical, disability, Medicare supplement, and long-term care policies. This speciality is in high demand, as health insurance is a critical component of overall financial security.

Auto Insurance

Auto insurance, while falling under the broader property and casualty insurance category, is a significant speciality in its own right. Auto insurance agents focus on providing coverage for vehicles, including cars, motorcycles, and specialty vehicles like RVs. They help clients manage risks related to accidents, theft, and damage to their vehicles.

Liability Insurance

Liability insurance is another critical area of specialisation. This type of insurance provides coverage for individuals or organisations in the event of negligent acts or omissions that lead to financial losses for others. It can include various forms, such as general liability, professional liability, and worker's compensation insurance.

Other Specialities

In addition to the above, insurance sales professionals can also specialise in other areas, such as surplus line insurance, variable products insurance, personal lines insurance, disability insurance, and long-term care insurance. Surplus line insurance covers unique risks, while variable products insurance combines insurance with investment elements. Personal lines insurance focuses on selling products like auto and homeowners insurance directly to consumers. Disability and long-term care insurance agents help individuals and businesses plan for income protection and future care needs, respectively.

When choosing a speciality, it's important to consider your interests, the demand for that type of insurance in your target market, and the licensing requirements in your state.

Understand state-specific requirements

Each US state has different licensure requirements for insurance agents, and these requirements vary depending on the type of insurance being sold. While some states may have similar names for their licenses, they may cover different types of insurance. Therefore, it is important to check the specifics of the insurance license you need for your state.

• Property and casualty license: This license is for agents who plan to serve clients who need auto, home, and business casualty insurance.
• Life, health, and accident license: This license is for agents who plan to serve individuals who need insurance and annuities related to life events, such as life insurance, accidents, or health insurance.
• Property & Casualty (P&C) license: To sell auto insurance and homeowners insurance, you need this license.
• Life & Health (L&H) license: To sell life insurance, annuities, and health insurance, you need this license.

In addition to the type of license, each state may have different requirements for obtaining it. For example, some states require a certain level of education, such as a high school diploma or GED, while others may prefer a college degree. Most states require the completion of a pre-licensing training course, which can vary in length from a few days to several weeks and cover both national and state-specific information. Some states also require a background check, which may include fingerprinting, and many require the completion of periodic continuing education to maintain your license.

To find out the specific requirements for your state, you should check with your state's department of insurance licensing division or the National Insurance Producer Registry (NIPR), which has a helpful resource for reviewing state-specific licensing requirements and fees.

Pass the state exam

To pass the state exam, you must complete a pre-licensing course. These courses can be taken online or in person and typically take a few days to complete, although some states require 20-40 hours of training. They cover topics that will appear on the state licensing examination, such as insurance ethics, different types of insurance policies, and state laws pertaining to insurance sales. After fulfilling any pre-exam requirements, you can schedule your official licensing exam. An outside company usually proctors these exams, which are often taken at a testing site and completed on a computer. The exam usually consists of multiple-choice questions, and you will be informed of your result immediately after completing it. If you do not pass on your first attempt, you can reschedule and try again.

The exam process is generally not considered difficult, especially if you have completed the necessary pre-exam requirements and come prepared. The exams are time-restricted and typically contain anywhere between 50 and 200 multiple-choice questions, but this will depend on your state and the type of license you are testing for. You will usually be given around 1.5 to 2.5 hours to complete the exam. You will be informed in advance of the passing score, which is usually in the range of 70% to 80%. It is worth noting that some states include a small number of "pre-test" questions that don't count toward your final score but are used by the testing company to assemble future exam materials.

To improve your chances of passing the state exam on your first try, it is recommended that you take a pre-licensing course, even if your state doesn't require it. These courses provide valuable education and cover both national and state-specific information. They will help you become familiar with the broad range of topics covered in the exam, from insurance basics to ethical business practices. Additionally, you can consider utilizing exam prep courses and study materials offered by companies like America's Professor to enhance your preparation.

Get fingerprinted and a background check

To become an insurance agent, you will need to pass a background check and, in some states, submit your fingerprints. This is because insurance agents are held in a fiduciary responsibility with clients and insurance companies, meaning they handle customers' money, and insurance companies require that agents be trustworthy and competent to handle such monies.

The background check process varies by state, and in some cases, includes fingerprinting. Some states that require fingerprinting as part of the licensure process include Alabama, Alaska, Arizona, California, Florida, Georgia, Hawaii, Idaho, Louisiana, Minnesota, Montana, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Tennessee, Texas, Utah, Washington, West Virginia, Wisconsin, and Wyoming.

If you are in a state that does not require fingerprinting, it is still important to fully vet your insurance agent. You can do this by checking insurance companies and looking for high ratings with M. Best, Fitch, Moody's, and Standard & Poor's, which indicate financial strength and creditworthiness. You can also read social media and local directory reviews, or ask friends and family members for recommendations based on personal experience.

If you have a criminal background, it is important to know that most states have regulations that specifically disqualify persons with convictions involving crimes of moral turpitude, such as fraud, dishonesty, or breach of trust, from licensure. However, this does not mean that you cannot qualify for an insurance license if you have a misdemeanor or felony conviction; it will depend on the hiring company and licensing state. It is always best to be transparent and honest in your license application.

Complete pre-licensing education

To become an insurance agent, you'll need to complete pre-licensing education. This involves taking a pre-licensing training course that covers topics relevant to the state licensing examination. These courses are typically a few days long, but can be up to several days, and consist of 20 to 40 hours of insurance education. They cover insurance ethics, different types of insurance policies, and state-specific laws and regulations relevant to the type of insurance you plan to sell.

Around half of US states have pre-licensing requirements, meaning you must complete a state-approved pre-licensing education course before you can register to take your insurance license exam. Even if your state doesn't require it, it is strongly recommended that you take a pre-licensing course to improve your chances of passing the licensing exam on the first try.

The specific pre-licensing requirements depend on the type of insurance you plan to sell and the state you're in. For example, to sell auto insurance and homeowners insurance, you'll need a Property and Casualty (P&C) license, whereas selling life insurance, annuities, and health insurance requires a Life and Health (L&H) license.

In addition to pre-licensing education, you'll also need to meet other general requirements to become an insurance agent, such as being at least 18 years old and passing a background check.

Frequently asked questions