How to Obtain an Insurance License

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Insurance agents—called “producers”—get their licenses in one, two or three categories, such as Life, Health, or Property and Casualty. Getting all licenses would enable them to sell medical expense policies, hospitalization coverage, disability income insurance and personal life insurance; automobile insurance, business property policies, homeowners and renters insurance generally.

An insurance producer who can eventually educate and label himself as a “comprehensive planning analyst” by putting together total accounts and selling all financial products—including mutual funds, annuities and other securities—will have more potential income possibilities. Each state has its own requirements and its own specialized tests.

Difficulty: Expect to invest some time getting educated, licensed, and certified for sales.

Things You’ll Need:

* State requirements information
Preparatory class
Exam study materials (books and online as well)
Application, fee and police background check materials
Registration for state exam
Passing test score
Certification with each individual insurance company

The Path to Insurance Sales Starts Here

Step 1:

Familiarize yourself with your state’s individual licensure requirements. You can telephone, or go online and type “insurance agent—your state” into a search engine and locate your state’s insurance commission page.

Step 2:

Understand that many states have a course in insurance that you must take as a preliminary to studying for the state exam: a pre-licensing course. You or your broker—if you work under someone else—will pay a fee and register you for this class that typically lasts a week or two.

Step 3:

Take the education class and after you receive your certificate, you will complete an application to take the state licensure exam. In addition, a police background check usually accompanies the class certificate along with the fees for taking the test.

Step 4:

Study for your state licensure exam online or by buying additional study materials. Invest the time and study to the best of your capability because if you do not pass the state exam, you must re-register and pay to take it again. The exams are held at a central location and proctored by an educational testing company generally.

Test day, you will most likely need two forms of identification, your test registration number, and your pre-education course completion certificate.

Step 5:

Get your state license and then acquaint yourself with each individual insurance company’s policies. In order to do that it may mean taking an additional workshop—including a small test or registration online in order to sell their products. Obviously, the more insurance companies you register with, the more products you can offer a potential client.

Tips & Warnings

* You will most likely receive your state license by mail. (There may be an additional fee for state license processing.)

• Any formal education you can receive about the industry and its products will make you more valuable to an insurance firm, or, if you work independently, your customers.

• Realize that selling insurance and financial products requires people skills, communication ease, accounting, economics, the ability to understand contracts, knowledge of risk management and a good dose of marketing.

• If you approach the business as finding a package that’s best for your client, you should do well.

• For marketing, expect to buy targeted mailing lists, get booths at lifestyle fairs, hold seminars, and hand out hundreds of business cards to find your customers.

* You must renew your license(s) annually and expect to take individual insurance conferences and seminars often, in order to stay current.

• To sell your products in another state, you must hold a license in that state as well.

• Be aware of the Do Not Call registry that prohibits cold-calling sales with penalties for noncompliance.

• Certification as a Certified Financial Planner will help you to grow your business and should be something to strive for.

Reference: Independent Insurance Agents and Brokers of America


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