How to Become a Licensed Insurance Agent

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There are over 420,000 insurance agents currently licensed in the U.S. There has been a 10% increase in the past 5 years and a large shift of financial jobs out of other financial sectors and into the insurance industry. The industry as a whole has shown consistent growth in both revenues and profits, thus it appears a solid long term outlook on job growth is very realistic.

With tens of thousands of new insurance agents entering the market, competition has become fierce. This article will provide you with an overview of the basic steps involved in becoming a licensed agent.

The Road to Becoming an Insurance Agent

As an insurance agent your duties will include helping individuals, families, and small and large companies protect their lives, health, property, and businesses. As an insurance agent, you will typically fall into one of two categories: independent and captive.

An independent insurance agent will normally sell multiple lines of insurance for multiple companies. Most independent agents will typically sell a majority of their policies for one company and use the other companies they represent as supplemental options for customers to choose from. Many life and health insurance agents are independent, since these two sectors have strong competition with a tremendous variety of available options.

A captive insurance agent is an agent who sells insurance for one company. Generally captive agents are restricted by contract to only sell one type and may face penalties for acting as an independent agent for any other company. Typically captive agents are provided with more support, funding, and incentives then an independent agent such as equipment and advertising vouchers.

As for the main differences, captive agents are provided more support from the insurance company they represent, but independent agents can provide a more competitive service line. Therefore, independent agents may find it more difficult and expensive to start their agency, but selling customers can be easier due to a large selection of product lines. Typically an independent agent will start off working at a larger independent agency, before embarking on their own private venture.

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Becoming an Agent – Qualifications, Licensing, Training

Typically most insurance companies prefer their agents to have an associates or bachelors degree in order to qualify. If you are still currently enrolled in college, you may also want to consider taking some insurance related courses, which many universities offer.

While it is not required to have a college degree, it is certainly recommended to have the best possible chance of employment.

Getting Licensed is a Critical Part of Becoming an Agent

Nearly every state in the U.S. requires you to be licensed to sell insurance. You must get a license in each state where you plan to sell insurance. So if you reside in Ohio for example, your Ohio insurance license will not permit you to sell insurance in Pennsylvania, New York, etc… Both PA and NY will require you to go through additional coursework and take their state licensing exams.

Be prepared for coursework. Pre-Licensing Courses are very typical from state to state and are required before you may take the licensing exam. These courses will cover aspects of the consumer insurance industry, insurance fundamentals, and the insurance laws of the state you are applying to practice in.

Education does not stop after you are licensed. Most states require that insurance agents take continued education courses. These courses are designed to keep you informed of changes in insurance products, the industry as a whole, and changes in state insurance laws. These courses are not only designed to keep you safe and legal, but they also help you provide the best possible service to your customers.

That’s It! After completing your coursework and passing the licensing exam, you are able to sell insurance products in your state. The next step you will need to take is deciding whether or not you would prefer to be a captive agent or an independent agent. To get started you should contact your state Department of Insurance and ask for more details.

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