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How To Become a Licensed Insurance Agent

Many types of insurance products serve consumers today. These include life insurance, long-term care insurance, and health insurance, to name a few. Insurance companies seek to meet consumer demand. As such, the insurance industry is subject to several insurance laws to protect consumers and the financial markets.

One category of laws governs the licensing of insurance producers. Insurance producers are people who engage in insurance sales. Insurance agents or insurance producers must be licensed in each state where they serve as an insurance salesperson. This requires them to pass an insurance license exam and meet other state-specific licensing requirements.

Licensed insurance agents sell insurance policies and help clients file claims. Many rely on these services to provide a crucial safety net for anything from minor fender benders to devastating natural disasters or severe illnesses.

Many people find a career in insurance sales attractive—you can study and pass the exam relatively quickly. Education requirements are often limited to a high school diploma and an insurance license.

What does it take to become a licensed insurance agent? The particular requirements vary by state. But this article outlines common parts of the application process. It also discusses general requirements for pre-license education. These may include the following:

  • A background check
  • Particular insurance education courses
  • A licensing examination

To become an insurance producer, consider the following steps to getting your insurance agent license.

Type of Insurance Agent

Take time to determine what type of insurance agent you want to become. You'll need to decide whether to become a captive or independent agent.

Captive Insurance Agent

A captive agent only works for a single company. The captive company provides training and support to its agents. In return, the insurance agent can only sell the company's products. A captive agent can't sell policies to a competitor.

Independent Insurance Agent

An independent insurance agent works with more than one insurance company. The insurance agency can provide clients with policy quotes from multiple companies to find the policy and coverage at the best price. An independent agent has flexibility, but they don't receive dedicated training or support from the carriers the agent works with.

Types of Insurance Products

The types of insurance an agent can sell are vast. There are a variety of commercial lines and personal lines of insurance. Personal lines of insurance cater to individuals and families. Personal lines include life, accident, auto, home, and life insurance.

Commercial insurance agents focus on providing coverage to businesses. Commercial policies include the following:

  • General commercial liability
  • Commercial property insurance
  • Errors and omissions insurance

The type of insurance products an agent sells determines the particular requirements they must meet.

Know Your State's Licensing Requirements

It's critical to know your state's requirements for licensure. For example, California's Department of Insurance provides information about licensing in its state. It provides information for an individual resident license, individual non-resident license, and business entity licenses.

After you know what type of insurance you will sell, you can choose the proper license. For example, a life insurance agent must meet different requirements than an agent getting a property and casualty license.

Your career path may require you to obtain multiple licenses. Your state's department of insurance or the company you will work for will provide the specifics. Although state requirements vary, typical requirements are listed below.

Minimum Educational Requirements

Most states require at least a high school diploma for minimum education requirements. But many employers will want to see a college degree, as well. Courses in finance, business, and economics, as well as experience in sales, are helpful when seeking employment.

Insurance License Exam

Most states require a pre-licensing course to become a licensed insurance agent. Educational requirements to prepare for the exam can range from one day to more than 40 hours.

The National Insurance Producer Registry (NIPR) is a helpful resource for finding state-producer requirements. Again, the types of insurance you want to sell, such as life, health, or property and casualty insurance, dictate the requirements. Then, you can determine the list of approved and required courses and course providers.

After completing the pre-requisite training, you'll have to pay a fee and sign up for your state's licensing exam. In addition to questions regarding the exact types of insurance you'll sell, the exams will test your knowledge of insurance basics, rules, and regulations.

Many testing centers provide your results as soon as you complete your exam. This means you will know whether you passed quickly. If you fail, you should check your state's rules for retesting or appealing the results.

The Background Check

You'll be ready to submit your license application once you pass your state's license exam. Some states require a background check for insurance agents. Some states go further, requiring applicants to undergo fingerprinting. This allows an examination of state or federal criminal history. If the background check reveals any felonies in your past, they will generally disqualify you from becoming a licensed insurance agent.

Getting an Adjuster License

Just as an insurance agent needs a license to operate in a state, public adjusters are also subject to licensing requirements. Most state insurance departments regulate public insurance adjusters. The National Association of Public Insurance Adjusters provides information about the public adjuster profession.

Get Help With the Licensing in Your State

You may be an experienced licensed insurance agent dealing with a complex legal issue. Or you may be an applicant who's hit some legal roadblocks to obtaining your license. Insurance laws can be complicated and overwhelming.

Let an experienced legal professional explain the applicable insurance laws and help you resolve your issue. Contact a local insurance attorney today to get help defending your interests.

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