Life and Health Insurance License - The Basics

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What Is A Life Insurance License

A life insurance license means you are approved by your state to sell life insurance in your state. The license is state-issued, and you have to take an exam at a state-approved facility to get one. Usually, the testing company is an independent company, separate from the state, but state-approved to give insurance licensing exams. Remember, your license will have your picture on it, so dress nicely for the exam. You want your future employer and customers to see you wearing business attire in the license picture.

If you are hired by a company prior to being licensed, you may be tutored for the exam by the company that hired you. Most states have pre-licensing education requirements, so an online or in person course may also be provided by your company. StateRequirement recommends Kaplan Education Company for all pre-license education courses. By doing this, when you go to take the actual exam, you will know that you are as prepared as possible for it, and confident you will do well. You will need to set up an appointment to take the state exam with the proper test provider.

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Is The Life Insurance License Exam Difficult

If you have been adequately prepared for the exam, it should not be difficult for you. You will be tested on different types of life insurance, what those types of insurance do, who should buy them, how and why premiums increase, and state laws regarding how you can approach customers to sell life insurance to them.

Life Insurance License Renewal

In most states, the license is good for two to four years, with a continuing education requirement during the interim. This means you must take a certain number of continuing education hours in life insurance law and updates to those laws every two years. Most of the time, you will take this continuing education in an online course. It is usually 30 hours or less, depending on your state.

When your license expires, you must prove you have taken your continuing education hours. Most of the time, in the majority of states, the continuing education companies are required to report your progress to the state. Depending on the course provider, you may also be required to take a test to be sure you retained the information in the course.

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What Products Can You Sell With A Life Insurance License

A life insurance license means you can sell term, whole, and universal life insurance policies to your customers. You may be hired as a producer for a single life insurance agency, or as a producer for a broker who deals with products from more than one life insurance company. You may also sell life insurance policies as an independent producer, in an independent contractor status, or by starting your own agency. There are an array of different directions having your license can lead you.

Term life insurance is a policy that is in place for a certain period of time specified in the insurance contract, usually with premiums that go up every few years as the insured gets older. Some term policies may have a set premium for the extent of the contract.

There may be a rider for accidental death and dismemberment that customers can add that will increase the value of the policy. All term life policies have an end date, the age at which the company will no longer insure you.

Whole life insurance is in place for the insured’s “whole lifetime,” and premiums do not go up based on age; however, this type of life insurance is typically more expensive than term life.

Universal life insurance combines the inexpensive premiums of term life with a savings account that has a value which builds up over time, as each premium is paid. You can cash out this savings without penalty after a certain amount of time, as specified in the individual insurance contract.

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Limitations Of The Life Insurance License

You cannot sell any type of insurance other than life insurance products. This includes variable contracts and annuities, which are often associated with life insurance, or any other variable products. These things require a separate FINRA securities license to sell, as they are considered investments, rather than pure life insurance.

Certain insurance company contracts may mandate that the principal agent obtain their Series 6 and Series 63 FINRA securities licenses by a certain date to maintain the relationship.

What Is A Health Insurance License

A health insurance license means you can sell any type of health insurance policy that is offered in your state. You can also recommend policies to your customers based on their needs, you can assist them in applying for state health insurance subsidies, and you can advocate with the insurance companies whose policies you sell on behalf of your customers.

To become licensed, you must pass a licensing exam given by the proper exam provider in your state. Your state may also have pre-licensing education requirements as well. StateRequirement recommends Kaplan Education Company for all pre-license education courses.

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Is The Health Insurance Exam Difficult?

Like any exam, the ease or difficulty of it will depend on how well prepared you are when you enter the exam room to take it. The education from the courses you take should prepare you to take the exam and pass on your first attempt.

You will be tested on the various types of health insurance, the proper way to counsel clients on the best policy for them, how you can approach clients and what you are allowed to say to them when selling them health insurance, and your state’s particular health insurance laws, as well as federal health insurance laws.

Health Insurance License Renewal

When your license expires, you must prove you have taken your continuing education hours. Most of the time, in the majority of states, the continuing education companies are required to report your progress to the state. Depending on the course provider, you may also be required to take a test to be sure you retained the information in the course.

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Health Insurance Prodcuts

You can sell any type of health insurance with your health insurance license. This means full health insurance policies, hospital-only policies, vision and dental policies, catastrophic coverage policies, and prescription drug policies. You will educate your clients on deductibles, and help them choose one they can pay, with a premium they can afford.

You may only sell health insurance. Any other insurance products are prohibited to you, unless you have a license to sell them, as well. This would require separate training on those insurance products, as well as different exams. Some health insurance products are packaged with annuities, or other investment/retirement products.

A health insurance license only allows you to sell pure health insurance. If you or your employer wants you to sell annuities or variable products along with the health insurance, you must be licensed separately with a securities license.

Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. Huge Hammer LLC and its members and affiliates are not responsible for any losses, monetary or otherwise. For more information, please contact your state's authority on insurance.

Disclosure: StateRequirement has an affiliation with Kaplan Education company, and may receive compensation based on user activity on this site. We truly believe that Kaplan offers excellent products and services, and compliments the mission of StateRequirement.