How to get an Insurance License – The First Step to Become an Insurance Agent

TLTR: This article is an in-depth guide to help you understand the process of obtaining an insurance agent license and how to prepare for your upcoming exam. Also mentioned are tips on how to ace your exam!

In 2023, the insurance industry is going to be more competitive than ever. If you’re looking to stand out from the rest of the competition and distinguish yourself from the crowd, the first step is to get a license. Without one, you will not be able to sell or represent any type of risk coverage for your clients.

In order to obtain this license, it is necessary that you apply and pass the one-time state-mandated exam and fulfill all of the required licensing requirements. The process can take up to six months from start to finish, so make sure that you are prepared before starting your professional journey. Learn more on how you can prepare to get an insurance license.

Is Becoming An Insurance Agent a Good Career Choice?

Yes, it is! Once you’re licensed, there are unlimited opportunities to make a career in insurance. Captive insurance agents, for instance, get a base salary, but the majority of their earnings is commission-based. If you build a strong network of clients and insurers, you can build a book of business worth millions in a short time span.

Additionally, insurance agents don’t work a nine-to-five desk job. Independent agents, more specifically, have the freedom to choose when to work and who to work with. They also get to choose which products to carry and which companies to represent.

As independent agents, your interpersonal skills are very important. If your top skills are listening, marketing, and convincing others, you will do great in your career. While a college degree can be helpful, it isn’t mandatory. You just need a state-mandated license, and you’re good to go!

What Are the Requirements to Become an Insurance Agent?

Having a current insurance agent license in the line of insurance you’re selling is the only requirement to becoming an insurance agent. But having a college degree or people skills will give your career a boost.

Depending on where you live, state requirements will vary for becoming an insurance agent in the U.S. For instance, you must attend 20 hours of pre licensing education, either in a classroom or online, before you can sit for an exam.

Becoming an insurance agent doesn’t require you to have a college degree. If you have a high school diploma or a GED, then you’re good to go.

Of course, once you’ve passed and started working as an agent, your license needs to be renewed regularly.

As an insurance agent, you’re working for people’s safety. Therefore, you need to be updated on the state’s rules and regulations, tax laws, and any changes in the insurance market. If you’re rusty in your knowledge, your clients will directly suffer, which means that your career will suffer as well. So, an agent is also required to continue educating themselves regarding rules and regulations.

One of the other viable insurance career for you could be to become an insurance adjuster.

Do Insurance Agents Make Good Money?

According to the U.S. Bureau of Labor Statistics, the median annual wage for insurance sales agents was $52,180 as of 2020. However, the higher ten percent of the insurance agents earned around $130,000. It’s safe to say that those pursuing insurance careers are going down a well-paying and exciting path. If you want to know how to become an independent insurance agent but don’t know where to start, an insurance license is the first step.

How Long Does It Take to Become an Insurance Agent?

Sitting for the exam and obtaining the license can take anywhere between a few days to a couple of weeks, but preparing for the exam could take longer. It honestly depends on when you’ll feel prepared to take the exam.
Kaplan Financial Education has free as well as paid-for materials that aspiring insurance agents can take advantage of.

How Much Does It Cost to Get an Insurance License?

Getting a state-mandated insurance license isn’t too expensive. Every state has a different set of requirements, and different costs attached to the process. For instance, America’s Professor claims that the Georgia Department of Insurance charges a total of $150 per license.

What Can You Expect to Find on Your Insurance Examination?

You will be given multiple-choice questions that quiz you on your knowledge of insurance terminologies, numbers, and practicality-based scenarios. In most states, you will need a score of over 70 to pass the exam.

There is no tough or easy exam; the level of difficulty depends on how well you’ve prepared yourself for it. Depending on your state and line of insurance, you will be sitting down for about two to three hours answering less than a hundred questions.

Don’t worry if you do not pass on the first try; you can sit for the licensing exam three times in a year.

How Can I Get an Insurance Agent License?

Let’s look at the five steps of acquiring an insurance agent license:

Step One: Acquire a high school diploma and/or a college degree

Although a high school diploma is the only educational requirement for an insurance agent, it would be a huge asset to get higher education relating to insurance.

In addition, an insurance agent must understand what motivates people to purchase. Recently, a few colleges like Bauer College of Business and Ferris State University have started offering courses in insurance and sales marketing.

Having people skills will take you considerably far in this career, but a good knowledge of the business world will give you an edge when competing against a rival independent insurance brokerage.

Step Two: Decide what kind of insurance license you want to obtain

Now that you have the basic requirements down, it’s time to learn about different lines of insurance. Here are some of the common types:

• Life Insurance
• Health Insurance
• Property and Casualty (P&C) Insurance

The type of insurance you want to sell determines what insurance licensing exam you take.

Insurance agents take multiple licensing exams so they can sell one or more of the lines of authority (types of insurance that an agent is licensed to carry out). Since your job is selling insurance, it’s always better to choose as many lines of authority as possible.

For example, if you want to sell auto insurance in Georgia, you must prepare and sit for P&C insurance in Georgia in accordance with its state laws. Once you’ve passed the licensing exam, you’re good to sell auto insurance there. But if you want to sell auto insurance in Texas, you must license yourself for Texas as well.

So, if you wish to add a line of authority to your existing license, you must apply online through the National Insurance Producer Registry (NIPR).

Step Three: Research about insurance license requirements in your state

Requirements vary for acquiring an insurance license depending on which state you want to sell policies in. Did you know that you can live in one state and sell policies in another? Educate yourself on the various licensing requirements provided by the department of insurance in the state you wish to sell policies in to find out what you need to do to take the licensing examination.

Furthermore, check out the National Association of Insurance Commissioners (NAIC) website for more information and consult with any insurance company.

A majority of states require you to complete a pre-licensing insurance course before registering for state licensing exams. Enroll in a state-approved coursework program before your license examination.

For example, the California Department of Insurance approves the Property Casualty/Broker-Agent Course program from MGT Insurance School. Moreover, a program like that can help aspiring agents understand property-casualty insurance better.

Step Four: Take your insurance licensing examination

All states require their applicants to submit documents for a background check relating to their work history and criminal record. These documents include a state exam certificate, fingerprint card, a citizen affidavit, and a background report. The state insurance board will review, approve, and issue your license.

Step Five: Submit your documents for a background check to acquire your insurance license

All states require their applicants to submit documents for a background check relating to their work history and criminal record. These documents include a state exam certificate, fingerprint card, a citizen affidavit, and a background report. The state insurance board will review, approve, and issue your license.

Before You Go

Congratulations on successfully obtaining your insurance license! You have opened the doors of the insurance industry for your career growth. The insurance license exam exists to create a standardized benchmark, so all licensed agents know how best to help their clients. Don’t forget that a periodical license renewal is mandatory!