How To Become An Insurance Agent
Find Your State’s Licensing Requirements
Becoming an insurance agent is an excellent job choice. Whether you are young and just starting out, working to level up your sales skills, or changing your career path mid-way, being an insurance agent is a great way to make good money and live how you want.
This article will cover everything you need to know to become an insurance agent. Read on to learn everything from licensing to salary and everything in between.
How To Get Your Insurance License
Getting your insurance license is the first step to becoming an insurance agent. Each state has different processes and requirements when it comes to insurance licensing, but these general guidelines are followed in most states.
Which Types of Insurance Licenses Do You Need?
Depending on what type of insurance agent you want to be or what types of policies you need to sell, you will need to choose what type or types of insurance licenses you need to get.
These are examples of the types of insurance policies you can sell with each type of license:
- Property & Casualty Insurance License – Car Insurance, Home Insurance, Business Insurance, etc…
- Life & Health Insurance License – Life Insurance, Annuities, Health Insurance, etc…
Most insurance agents choose to get both of these licenses, but if you will only sell one type of policy then you just need to choose which license fits your needs.
Insurance Pre-License Education
Depending on the state, you may be required to take an insurance pre-license education course. This is a course that can be taken online or in-person to prepare you to pass your insurance license exam. The length of this course is dependent on your state and the different lines of licensing you are looking to earn. In states that don’t have a pre-licensing requirement, people still generally choose to take a course to study for the exam. This is wise, as these tests can be tough, especially if you don’t come prepared.
Insurance License Exams
After your pre-license course, you are now ready to take the insurance license exam. These exams are generally between 80-160 questions, obviously depending on the state.
You will need to take an exam for each line of insurance you wish to attain, which means that in some states you may be required to take as many as four exams total (though most only require two).
The fees for the exams have a large range with some states costing around $40 per attempt, while others can cost upwards of $150+ per attempt. This is the number one reason to come prepared for your exam.
Insurance exams in all states follow these guidelines:
- Proctored – You will take this test in a professional testing center with a proctor monitoring you
- Timed – Generally, you have about two hours per exam
- Multiple-choice – These exams give you a question and four possible responses to select from
- Closed-book – You will not be able to bring any study materials into the building with you when testing
As mentioned previously, these exams can be difficult, but with the proper amount of study with the right courses or materials, they be passed on the first attempt.
License Application and Background Check
Each state has its own license application process. These applications can generally be filled out online and have a fee ranging from $30 to $200. Some states require this before your exam, and some after, so be sure to check your individual state’s steps.
All states will run some form of a background check while reviewing your application. Some will also require fingerprint data to be taken prior to licensing. This is normally run through a third party and carries a fee of around $30, give or take.
If you have questions about the background checks or any other detailed license questions, you can find your state’s Department of Insurance contact information on your state’s license page.
FINRA Securities Licenses
If you are working to become a life insurance agent or financial advisor, you will need licensing over and above your state’s insurance license.
Selling life insurance or other retirement products that are tied to the stock market will require federal level licensing from FINRA.
In most cases, Series 6 & Series 63 licenses are what you need to obtain to sell these products. The SIE exam will be a qualification you must complete before attempting to get your Series 6 or Series 63.
Some agents choose to get their Series 7 license instead of Series 6, as this allows them to market and sell a much broader line of securities products. The Series 7 exam, however, is one of the most difficult exams offered by FINRA, so be sure you understand which license would fit your needs best.
What Are The Requirements To Become An Insurance Agent?
The qualifications and prerequisites to become an insurance agent are actually very little compared to other jobs. Aside from licensing, you will need to have a relatively clean background, great people skills, and the willingness and ability to learn.
Do I Need A Degree To Be An Insurance Agent?
A degree is not required to get an insurance license or to sell insurance.
Depending on the job you are taking, however, the insurance company or agency that is offering the position may have a different set of requirements.
If you are looking to open your own insurance agency, you are essentially going to be running your own business. Having knowledge of how to operate an organization will be a great advantage to you and your team, but it doesn’t necessarily require a degree in business.
Working for an agency as an insurance producer (which most people also call an insurance agent) usually doesn’t require any college experience. The agent you will be working under may have specific requirements and qualities they are looking for in a sales employee, but a degree is generally not on that list.
How Long Does It Take To Become An Insurance Agent?
Since there are multiple steps to becoming an insurance agent, let’s break this down by sections:
- Getting your insurance licenses – Three to six weeks
- Finding an insurance agent job – Two or more weeks
- Getting your FINRA licenses (optional) – Four to eight weeks
These numbers are estimates, and not guaranteed by any means. Finding the right job could potentially take much more time than two weeks. Use your best judgment to give yourself enough time to do things right.
If you're looking for new job or to start your career in insurance, find an open position on StateRequirement's:
How Much Does It Cost To Get An Insurance License?
This number will vary greatly from state to state. To find the correct answer for your case, you should check your state’s license page.
Here is an example from a state with mid-range fees:
- Pre-license Education (Life & Health License) – $330
- Pre-license Education (Property & Casualty License) – $330
- Insurance Exam Fee (Life & Health License) – $62 per attempt
- Insurance Exam Fee (Property & Casualty License) – $62 per attempt
- Fingerprinting Fee – $31
- License Application Fee (All lines) – $100
- Grand Total – $915
There is a strong possibility that the company that hires you will assist or reimburse you for these fees, so be sure to ask about this when you are interviewing for a position.
Is Being An Insurance Agent A Good Career Choice?
Being an insurance agent is an excellent career choice for all different types of people. Younger people see insurance sales to be a great way to add flexibility and grow the size of their network. More experienced folks can leverage the network that they already have and use the career to leverage their savings into large growth.
Here are some of the major benefits of becoming an insurance agent:
- Potentially unlimited salary – Depending on your level within an agency or position in an insurance company, your compensation may include commissions on your sales. This means that the more you sell, the more you make. No ceiling!
- Low barrier of entry – A license and a hunger to learn and work hard are the only things you need to enter in as an insurance agent.
- Flexibility – Insurance agents often work at whichever time of day makes the most sense for them. This means that you have the ability to work outside the standard 9 to 5.
- Leverage – If you plan to be an owner of your own insurance agency, you are able to leverage other people’s work as well as your own. If you can find a sales method that suits your team well, you can scale it up as large as you would like!
- Networking – Building and growing your network is one of the largest factors of success of an insurance agent. The possibility of meeting important people in your area is a sure thing. In fact, it’s probable that you will become an important figure in your community.
- Helping people – There is no doubt that the longer you spend in insurance sales, the more people you will make an impact on. When you deliver a claim check to someone, you are delivering peace of mind. It’s more than just dollars, it’s an assurance that they will be able to make it through life after a loss.
These are just a few examples of the benefits of the job. The longer you stay with this career, the more advantages you will garner.
How much do insurance agents make
The overall take-home pay of an insurance agent varies widely on a number of variables. Things like location, sales, company, experience, and many other factors go into what this job can pay. According to Glassdoor, the average base around $40,000 per year. Many of these positions offer commissions based upon your sales on top of your base pay. Your pay will be completely dependent upon your arrangement with the insurance company or agency you write business for.
Is being an insurance agent stressful?
Whether insurance is stressful or not is completely dependent on your temperament and external factors of your agency. Some agents who have a handle on the day-to-day may find almost no stress in their job, while others may not have as strong a grip and find the work to be much more demanding.
Sales goals can, at times, be a source of stress for insurance agents, but this is dependent on the culture and atmosphere of your specific agency. While you are interviewing with an agency, try to get a feel for the general mood of the employees so you can take temperature before accepting the position.
Another situation that could be considered stressful for insurance agents is dealing with claims events. This may be an apprehensive time as customers can be unsure or fearful of what will happen in their financial situation. Just know that you have control of the situation and act with respect and tact, and you will make it through just fine.
Common Questions About Being An Insurance Agent
How Can I Find A Job In Insurance?
The best place to find a job or begin your career in insurance is to use our insurance job board. If you need to update your resume before applying, check out our guide on how to write an insurance resume.
Do Insurance Agents Get Paid Hourly?
This is dependent on your arrangement with your agency. Some agents are paid hourly, some by salary. These can also be combined with commission splits or bonus structures. There are many ways to compensate an insurance agent, and there doesn’t seem to be a prevailing method.
If you are an agency owner, it is almost certain that you will be paid a commission split with your insurance company. This may be supplemented based on your agency’s age or performance.
Can You Sell Insurance Without A License?
No. All states require a license to sell insurance. You must also hold the correct license for the type of policies you are advertising.
Example: if you have only a life insurance license, you cannot sell car insurance, but you can sell a term life insurance policy.
Is The Insurance License Exam Hard?
The national pass rate average for first-time test-takers is right at about 50%. Success rates vary by state, license types, and test prep company. We see that folks who study with a pre-license education course tend to fare better on the exam than those who use lesser study materials.
Can Insurance Agents Work From Home?
Working from home is a dream for many employees nowadays! Luckily, there are some agencies that accept remote staff members. These positions are not as widely available as in-office spots, but they can be found. Check out our job board for open positions in your area.
Information on this page has been gathered by a multitude of sources and was most recently updated on July 2020.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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