While requirements vary from state to state, the majority of U.S. states require agents to complete a certain number of state-approved pre-licensing insurance classes and then pass a licensing exam. Most states also require insurance agents to be finger printed and undergo a background check. All states also require that you complete periodic continuing education requirements focusing on insurance laws, consumer protection, ethics, and the technical details of various insurance policies to be able continue to maintain a license.
The United States insurance industry is a highly regulated industry that is regulated by each state individually. All insurance agents are required to be licensed in the state where they conduct business.
Although most employers only require agents to have a high school diploma, many agents have an associate or bachelor’s degree. A college education can help experienced agents move into careers in risk management or other positions that require postsecondary education. Plus, having a background in business, finance, psychology or marketing can be a tremendous asset to agents. So the first order of business is to decide if you want to take the time to complete an associate or bachelor’s degree program. If you decide on this option it usually takes at least 2-4 years to complete. Some graduate degrees are also helpful for insurance agents, for example law graduates can understand the legalities of estate law and those with an MBA can use their background in business situations.
Before you start your pre-licensing training courses you will need to first decide what types of insurance you want to sell. Agents sell many different kinds of insurance. There are four major categories of insurance: property, casualty, life and health and disability. Each of these major categories of insurance can be further subdivided into both personal and commercial lines. Personal lines are property-casualty coverages that protect an individual or family. Commercial lines are coverages designed for businesses. These major categories are referred to as “lines of authority” in the industry and agents must receive a license for each kind of insurance they sell. After picking areas of specialization you need to complete the pre-licensure requirements for each state where you want to be licensed.
Although general requirements exist, each state has specific guidelines. Most states require you to complete a state-approved pre-licensing class taught by a licensed insurance instructor. The classroom hours usually range from 16 to 32 hours per license.
For example, California applicants for casualty licensure must complete 20 hours of general pre-licensing education, as well as 12 hours of education in the state’s ethics and insurance codes.
New York State’s insurance pre-licensing requirements for the various lines are:
• Life & Accident & Health – 40 Hours (minimum 20 classroom hours)
• Life only – 20 Hours (minimum 10 classroom hours)
• Accident & Health only – 20 Hours (minimum 10 classroom hours)
• Property & Casualty – 96 Hours (minimum 90 classroom hours)
• Property & Casualty Personal Lines only – 43 Hours (minimum 40 classroom hours)
As the demand for financial-planning services increases, many agents also choose to get licensed and certified to sell securities and other financial products. Licensing and certification requires substantial study time to pass an additional exam—either the Series 6 or Series 7 licensing exam, both of which are administered by the Financial Industry Regulatory Authority (FINRA). The Series 6 exam is for agents who want to sell only mutual funds and variable annuities. The Series 7 exam is the main FINRA series license, which qualifies agents as general securities sales representatives.
Pass a Licensing Exam
All agents must pass a licensing exam to sell insurance which they take after satisfying their state’s pre-licensing courses.
To find your state’s insurance department and access to their respective licensing requirements, the National Association of Insurance Commissioners has a handy Map of NAIC States & Jurisdictions.
Search for a Job
When you have finally completed all your trainings and secured a license to serve as an insurance agent, you’re ready to apply for a job.
According to the Bureau of Labor Statistics, median annual salaries for insurances sales agents were just under $50,000 in 2017. However, the top 10 percent of agents earned more than $125,000 annually, while the bottom 10 percent took home just over $27,000.
A number of organizations offer certifications that show an agent’s expertise in insurance specialties. These certifications are not required for employment, but they can give job candidates an advantage over other applicants. Certifications also can be a source of continuing education credit.
You can earn designations such as:
- Chartered Property Casualty Underwriter
- Certified Insurance Counselor
- Certified Risk Manager
- Associate in Risk Management
- Associate in General Insurance
For details on specific designations, contact The Institutes and The American College of Financial Services. Or Check this website for a list of designations and how to get them.