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Insurance Licensing Articles
The insurance industry is rewarding and needs people who enjoy helping others set themselves and their family up to be financially secure even while facing emergencies. If you are looking to begin your career as an insurance agent, the first step you need to take is to get your insurance license.
Becoming an insurance agent requires that you pass a state-specific insurance license exam. This article gives the general insurance licensing requirements, though the process varies by state. Passing the insurance licensing exam is the most crucial step of the process, and that’s a requirement in every state.
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How Do I Get My Insurance License?
Start by researching the requirements for your state to become a licensed insurance agent. It is important to learn what is required in your state, as you may need to take courses which are state specific.
The information below represents common steps to get your insurance license, but may differ slightly from state-to-state. Be sure to follow your state’s rules when applying for your license.
Step 1: Complete a Pre-License Education Course
Some states require that you complete a pre-license education course to be able to register for the insurance exam, while others only need your completion certificate on test day. Some states do not require a course at all.
Whether or not your state requires pre-license education hours, it is always a good idea to properly study for your insurance license exam. A pre-license education course is the most comprehensive and straightforward way to prepare for the test.
Features of a pre-license education course include:
- Practice exams, self-paced or proctored
- Study calendar
- Live online instructor-led modules
- Study guides and materials, including cram sheets and practice questions
- Access to instructors for questions
Most pre-license education courses range from 20 to 40 hours and will meet the requirements of your state. The material covered varies by state and type of insurance license that you plan to pursue.
Some states require that you present an original completion certificate from an approved pre-license education course at the test center when you take your insurance license exam.
If you are not sure what your state requires to get your insurance license, visit the StateRequirement insurance licensing guide.
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Step 2: Complete Your Insurance License Application
You will need to complete and submit an official license application. These applications are state-specific and most often available through your state’s Department of Financial Services, Department of Insurance, or State Corporation Commission. Most states use the National Insurance Producer Registry (NIPR) to submit and process license applications.
To complete your application, you will need to provide your own basic information, such as full legal name, social security number, address, and criminal history, if applicable. It is important to read each question carefully and answer to the best of your ability.
You will need to know what kind of insurance license you want to get so that your pre-license education and other requirements are evaluated correctly. The options may include:
- Life Insurance License
- Health Insurance License
- Life and Health Insurance License
- Property Insurance License
- Casualty Insurance License
- Property and Casualty Insurance License
- Personal Lines Insurance License
Step 3: Get Fingerprinted and Complete a Background Check
As the applicant, you are responsible for having your fingerprints taken and submitted. You will receive directions to completing this step in your state, which may direct you to a third-party agency or local law enforcement. The cost of fingerprinting is usually between $35 and $75 dollars.
Your state will initiate a background check as part of the application process. Your state’s agency will complete this step, but you should be aware that it is part of getting your insurance license.
Step 4: Take Your Insurance Licensing Exam
This is one of the most critical steps to getting your insurance license and takes the most amount of preparation. Many states provide an exam content outline on their website that details all of the information and regulations on the test. A pre-license education course is still the best way to study and master what you need to know to pass the state insurance exam.
The specific information tested will vary by state and type of exam. It may include:
- Purpose of insurance for financial security and emergencies
- Contract law as it applies to insurance
- Underwriting and application
- Traditional policies, such as term life insurance or homeowner’s insurance
- Flexible feature policies, such as whole life policies
- Policy provisions, options, and riders
- Annuities and retirement plans
- Business and group life insurance, commercial property and casualty insurance
- Duties and responsibilities of a life insurance agent
- State-specific insurance law and regulations
Check out our state-specific Insurance License Exam guide for more information on taking and passing your insurance exam.
For insurance pre-license education and study tools, StateRequirement recommends:
Step 5: Application Review and License
After you have submitted all of your required documents, taken your pre-license education course, passed your state insurance license exam, and your background check has been completed, your state’s insurance authority will review your application.
This can take anywhere from a few days to a few weeks. If your processing authority has questions, they will follow up with you.
Once your application has been approved, you will receive notification and a copy of your official insurance license. Print this for your records, as well as to have available for potential clients.
You should always be able to show your state insurance license if asked. When applying for a new job within the insurance industry, your employer will ask for your license number and National Producer Number (NPN).
Make sure that your contact information is up-to-date on your application so that you are easy to reach if you need to provide additional information.
Insurance Agent License Requirements
All licensed insurance agents are required to pass their state’s exam, have a current license to sell the specific type of insurance, and complete state-approved continuing education each year.
FINRA Securities License Exams
Many insurance agents go on to get their securities license as well. These licenses allow insurance agents to market and sell securities or variable-contract life insurance policies and are administered by the Financial Industry Regulatory Authority (FINRA).
Insurance agents often choose to get the Series 6 and Series 63 licenses. To take these exams, you need to pass the prerequisite Securities Industry Essentials (SIE) exam and be sponsored by a FINRA-member firm, company, or organization. You can choose to get your Series 7 license to market and sell additional securities-based products.
You can also get your Series 65 or Series 66 license, which allows you to market and sell securities in your state. These exams are administered by the North American Securities Administrators Association (NASAA). The FINRA and NASAA exams are complementary and together can allow you to provide the best products available to your clients.
Insurance Licensing FAQ
What Exam Do I Have to Take to Sell Insurance?
To sell insurance, you will need to take a state insurance licensing exam in the specific line of insurance you want to sell. For example, if you want to sell life insurance in Florida, you will need to take and pass Florida’s life insurance licensing exam. Some states offer test-takers the option to combine multiple lines of insurance licenses that are commonly marketed together, such as life and health insurance or property and casualty insurance.
Is it Hard to Get Your Insurance License?
There are several steps in acquiring your insurance license, which some people find difficult to navigate without the help of a step-by-step guide. Researching what is required by your state will help you keep on the right path to get your insurance license with ease. Of the steps to get your insurance license, passing the state insurance licensing exam is the most time-consuming step. Even if your state does not require a pre-licensing education course, spending the time to study with the help of a course will greatly increase your knowledge.
How Hard is the Insurance Licensing Exam?
Passing the insurance license exam is the most challenging step in the licensing process, but taking a test prep course can help you prepare. The insurance license test covers a lot of information, which can make it difficult if you are not prepared. The average pass rate for all insurance licensing exams where state data is provided is about 60%. The National Association of Insurance Commissioners (NAIC) reports pass rates on the individual tests as:
Life Insurance: 62.9%
Health Insurance: 60.4%
Life & Health Insurance: 64.8%
Property Insurance: 53.6%
Casualty Insurance: 62%
Property & Casualty Insurance: 54.9%
Personal Lines: 61.4%
How Much Does it Cost to Become an Insurance Agent?
The cost to become an insurance agent varies by state and is typically around $350. For example, if you are applying to become a life insurance agent in North Carolina, you will pay the following fees:
Pre-licensing education course: between $129 and $249, depending on the course
Licensing exam: $45
Registration fee: $50
Application processing fee: $44
The application fees and registration are rarely refundable. If you chose a basic pre-license education course for around $129, you will have access to study modules, practice questions and practice tests, and a license exam manual. For more in-depth study materials, you can purchase a more comprehensive study course that includes videos, instructor-led Q&A, or even a live online classroom.
How Much Do Insurance Agents Make?
According to the Bureau of Labor Statistics, insurance sales agents earn a median salary of $50,940 annually. The highest earning insurance sales agents work for direct health and medical insurance carriers and make $65,180 annually. Those working for direct insurance carriers other than life, health, and medical make $54,110 annually. Finally, those who work at insurance agencies and brokerages make $49,000 annually. Once you are ready to apply for a job as an insurance sales agent, check out the StateRequirement’s Insurance Job Board.
How Long Does it Take to Get Licensed to Sell Insurance?
You should plan to spend at least two to eight weeks completing the steps to get your insurance license. The majority of that time is spent completing your pre-licensing education course and studying for your licensing exam. If you need to take the licensing exam more than once, it can increase the time it takes to become licensed to sell insurance. If you have not passed your licensing exam within six months of initiating your application, your state may require you to submit a new application and pay additional fees. Schedule your licensing exam within a week after finishing your pre-license education course to make sure that the information is fresh in your mind and you are ready to pass on your first attempt.