A career in insurance can be a lucrative choice for people willing to put in the time and effort to succeed. But where to start?
Here’s a general summary of the process you need to follow in order to get an insurance license and become an insurance agent. It’s important to note that insurance licensing requirements will vary from state to state so be sure to check with your state’s insurance department for guidance.
Although it’s possible for an insurance agency to hire you directly from high school, most companies prefer candidates with a college education in an area like finance, business or economics. It’s also possible to choose a major in insurance and risk management in college, particularly if you have an interest in eventually entering the insurance industry. Many insurance companies have programs for interns that let new agents to train and work as agents or underwriters while still in college, as long as you’re licensed appropriately.
States require you to have a license in each category of insurance for which you sell policies. You will need to complete pre-license courses, then pass the pre-license exam. Then expect to be fingerprinted and submit to a criminal background check. Depending on the state and the kind of insurance, the pre-license course may be classroom training or self-study, often online, requiring about 20-50 hours. Classroom-based pre-license courses may be available at community colleges, public technical colleges or private education providers. Check with your state’s insurance department for a listing of accredited schools in your area.
In some scenarios, employers will hire the right candidates first, and then send them off to pre-license education. In that case, the employer will generally cover the cost of pre-licensing. Most will also pay for continuing education to ensure that their agents stay properly licensed.
If you’re interested in becoming an insurance agent, it’s worth your time to check on available entry level positions on job boards like Indeed or even Craigslist before you spend your time and money on pre-licensing. That way you can get started in the business at the same time you’re getting the licensing education done.
In order to get an insurance license you must first pass a licensing exam (for a fee) that covers state insurance laws and other general insurance concepts. Every state has its own laws governing insurance licensing, and the structure of the test reflects this. The exam will contain general questions about insurance as well as questions about state-specific laws and regulations. The test will most likely consist of 75 to 200 multiple-choice questions, and you’ll be given between 2 to 3 hours to finish it. A passing score is often between 70-80%.
To sell some kinds of life insurance, you may be required to hold the Series 6 or Series 7 license. Testing for these designations are directed through a network of exam centers on behalf of the Financial Industry Regulatory Authority (FINRA).
As a new agent or broker, you might work exclusively for a particular insurance company as a “captive” agent (such as State Farm), or you may be appointed with multiple insurance carriers and operate as an independent insurance broker. However, understand that insurance school is just the tip of the iceberg when it comes to learning about the business. You'll get real-world, on-the-job training by working with experienced brokers and agents for a while before venturing out on your own to prospect and sell. In fact, it can take several years to really get comfortable with the insurance products you sell. While getting into the business is relatively simple in most cases, patience and dedication to your craft will ultimately determine your success.
In order to properly maintain your insurance license, you’ll also have to complete continuing education courses in ethics, insurance law, coverage concepts, etc. every two to four years (again, state specific) to renew your license. In the past, a classroom setting was the only option for continuing education. Now, like Pre-licensing, many services have established online portals for satisfying state continuing education requirements. You can study and earn CE credits online, without having to step foot in a classroom.
You may also decide to further your insurance education and pursue industry-specific designations. Although professional designations like the CPCU (Chartered Property Casualty Underwriter) and ARM (Associate in Risk Management) are purely voluntary ways of showing prospects and clients that you're knowledgeable in your field, by themselves they are unlikely to actually help you close a deal. However, the courses required for many of these common insurance designations may help you to satisfy continuing education requirements for renewing a state insurance license.
