Life Insurance License: Easy Exam Or Tough Test?

Getting a life insurance license is a challenging process that requires dedication and effort. The requirements for obtaining a license vary depending on the state, but there are some general steps and eligibility criteria that aspiring life insurance agents must meet. These include being at least 18 years old, passing a background check, and completing pre-licensing education. The latter includes taking courses on insurance industry regulations, principles, and life insurance products. The state licensure exam is considered one of the most difficult tests due to its broad range of topics, with passing scores typically set at 70% or higher. The cost of the exam ranges from $40 to $150, and applicants must wait at least 48 hours after passing before applying for their license. The entire process, from pre-licensing coursework to receiving a license, can take between two and eight weeks.

Eligibility requirements

The eligibility requirements for obtaining a life insurance license vary across different states. Here is a general overview of the common requirements:

Age

Most states require insurance agents to be at least 18 years old, which is the minimum age to apply for a license.

Background Check

A background check is mandatory, and you must be free of any fraud or felony charges. Some states also require that you do not have past-due child support.

Financial Requirements

You must not owe any federal or state income taxes. Additionally, you will need to pay a licensing fee, which varies depending on the state. The cost of the exam is usually around $40 to $150, and there may be additional fees for the application and other processing charges.

Education

Completing a pre-licensing course is necessary to prepare for the state licensure examinations. These courses are available online or in a classroom setup and cover topics such as insurance industry regulations and insurance principles. The coursework typically includes a minimum number of mandatory hours.

Veterans of the insurance industry with specific designations may be exempt from the pre-licensing requirement and can directly take the licensure exam.

Examination

After completing the pre-licensing coursework, you must pass the state licensure exam. The exam covers a broad range of topics and is considered challenging. It usually consists of 50 to 200 items, and you will have around two to three hours to complete it. The passing score is generally around 70%.

Pre-licensing coursework

The pre-licensing coursework is a mandatory step in the process of obtaining a life insurance license. The coursework covers a range of topics, including insurance industry regulations and insurance principles. The number of hours of pre-licensing coursework required varies depending on the state and the license type. For example, in Colorado, the Casualty pre-licensing requirement is 50 hours, while the Life, Accident, and Health (LA&H) requirement is 40 hours.

The pre-licensing coursework can be completed online or in a classroom setting. It is designed to prepare you for the state licensure examinations. The exams cover both general and state-specific knowledge. In Iowa, for instance, the life insurance exam outline contains 77 scored questions across these two sections and has to be completed in 120 minutes. The passing score varies by state, but generally, a score of at least 70% is required to pass.

The cost of the pre-licensing coursework also depends on the provider and the state. In Iowa, the Kaplan Education Company offers a pre-license course for $149 or more.

State insurance licensure exam

The state insurance licensure exam is a pivotal step in becoming a licensed insurance agent. The exam is not easy, and adequate preparation is critical to passing it on the first try. While the exam is similar across states, there are some differences to note.

The exam is administered by Pearson VUE in 25 states, including Iowa and Texas. It consists of multiple-choice questions, with no fill-ins or essays. The questions cover a broad range of topics, including insurance industry regulations, principles, and state-specific insurance concepts, rules, and regulations.

The exam can be taken online or in person, and you will be monitored by an official proctor in a controlled environment. The number of questions and the time allotted vary depending on the state and the type of insurance exam. For example, in Texas, the Life, Accident, and Health exam and the Property and Casualty exam are 150 minutes long, while in Iowa, the Life Insurance Licensing Exam gives you 120 minutes to answer 77 scored questions across two sections: general and state-specific knowledge.

The passing score for the exam also varies by state but is typically around 70%. In most states, you need a score of 70-75 to pass. The test results are valid for two years, after which you will need to retake the exam if you have not obtained your license.

The cost of the exam ranges from $40 to $150 per attempt, and you must present a valid signature-bearing ID and the original copy of your pre-licensing education certificate.

To prepare for the exam, it is recommended to take a pre-licensing course, which can be done online or in a classroom. These courses cover the relevant topics and provide study materials such as practice exams and flashcards. Additionally, allocating sufficient time to study and preparing for exam anxiety are crucial steps to increase your chances of passing.

Application and fees

The application process for a life insurance license varies depending on the state. In Iowa, for example, the application fee is $50, plus a $5.60 transaction fee. In California, the application fee is $188, or $193.60 if applying through the National Insurance Producer Registry (NIPR). In Florida, the application and license fees vary; applicants must refer to the Payment Methods and Fees page.

The application process usually involves submitting the application form online, via the state department's website. In California, applicants can also submit their application by mail.

In addition to the application fee, there are several other fees to consider when applying for a life insurance license. These include the cost of the pre-licensing education course, the background check, and the licensing exam. The total cost of obtaining a life insurance license can range from $220 in Iowa to over $400 in California.

After submitting the application, the review process can take a few days to several weeks, depending on the state. In California, for instance, the review process usually takes two to three weeks. During this time, the insurance regulation department may contact the applicant to clarify any issues or delays. Once the application has been approved, the license can be printed from the department's website.

Background check

Firstly, most states require some form of criminal background check, typically involving fingerprinting and a basic state-level background check. This may include running fingerprints through the FBI Criminal Database and checking state databases for information such as pending litigation or criminal history. Some states may exempt non-resident licensees from this process, while others require it for the acquisition of each new line of authority. It is worth noting that 25 states currently require fingerprints as part of the background check process.

The background check process also typically involves verifying an applicant's financial history. This includes checking for outstanding debts, bankruptcies, foreclosures, and tax liens. Additionally, as insurance agents handle customers' money, most states have regulations that disqualify persons with convictions involving crimes of moral turpitude, such as fraud, dishonesty, or breach of trust.

It is important to note that honesty and integrity are crucial in the life insurance field. Applicants must disclose their entire criminal history, including misdemeanors and lesser infractions. Failing to do so may result in application denial and future insurers may be less likely to consider the application.

The background check process can be lengthy and involve multiple layers of screening. Utilizing technology and professional verification sources can help make the process more efficient and thorough.

Frequently asked questions