Hi, this is another fascinating article on Life Insurance Agent License.
Reading this article, you will learn what it takes to be a licensed life insurance agent, the license application process, associated costs, and prospects.
Today, we will look at the following:
So, let’s roll.
Why Become a Life Insurance Agent?
Becoming a life insurance agent is one of those jobs with benefits and challenges.
On the one hand, you get to see and help people in their times of need.
But on the other hand, it’s challenging work requiring dedication and perseverance.
In addition to having exceptional communication skills and thick skin, agents need experience in sales and excellent knowledge of policies, rates, and regulations.
For example, most states require agents to attend continuing education pre-licensing courses every year or two after getting licensed; failure to do so could result in suspension or revocation of your license.
As an agent, you may also spend long hours meeting with families whose loved ones have died—and helping them collect compensation.
While many agents start part-time until they become thoroughly familiar with how things are done, others take small cases right away to gain experience and build relationships before doing more complex financial planning for clients later on.
If helping people through grief appeals to you, becoming a life insurance sales agent may be just what you need.
Educational Requirements
States regulate life insurance licenses, which means you’ll typically need to complete education and testing requirements set by your state before you can apply for licensure.
To find the complete list of test center locations and available test dates, go to your state’s department of insurance website and search for life agent licenses.
You may also check out your state’s exam process.
It varies widely by state, but in some cases includes both an exam and an experience requirement, such as X number of hours of work experience under supervision.
After all that hard work, don’t forget that while having a license is necessary to call yourself an agent or broker (or something else), it’s not enough on its own—you’ll need business-building skills too!
You have to qualify academically and get through required exams; also, you must meet specific ethical standards when dealing with customers.
Most states require basic training in ethics before allowing you to sit for licensing exams, so unless they changed their rules recently, I’d expect them to mention it somewhere on their site.
Aside from ensuring they comply with ethics standards, many states also specify how long someone must be licensed to maintain their status as a credentialed agent.
Licensing laws vary significantly from state to state, so make sure that you consult your State Department Of Insurance website when making these determinations.
However, a Chartered Life Underwriter Associate may get a waiver for the educational requirements.
Life Insurance Agent Licensing Authority
You need to pass an exam and get your state insurance license before selling life insurance.
In other places, though, like Wisconsin and Washington D.C., you can sell in-force policies—policies already sold by different agents or those issued before July 17, 1984—as long as you have your associate’s license and are working under the supervision of an existing broker or agent.
Find out from your state insurance department whether to get licensed as an agent or just licensed for life insurance sales.
If it’s easier to get certified as an agent first, think about completing your associate’s life license within a year of getting licensed in general so that both will be current at once when seeking employment with a new company.
You may be able to work towards both licenses simultaneously.
When considering colleges or universities for your education courses in life insurance licensing, check online to see if they include continuing education credits upon graduation.
This way, even after beginning full-time work as a professional insurance salesperson after completing school coursework and exams, you can continue earning CE credits that count toward relicensing—your actual state license renewal.
Life Insurance Agent Licensing Costs
Licensing costs vary by state.
On average, most states will charge you $200-$400 for licensing, but it’s not uncommon to find them at $1,000 or more.
Agents may also have to pay for Continuing Education credits on top of those application fees.
Bottom line: it’s easy to spend $1,000-2,000 just getting licensed to sell life insurance in your state!
Now multiply that by 4 (for each state where you want to sell), and your startup capital can quickly add up!
Of course, there are ways around paying all these licensing fees upfront: many companies offer flexible payment options so that you can pay in installments.
The cost to take a Life Insurance Agent License exam ranges from $43–$150, with an average of about $90 for each state.
In addition, most states require you to pass two exams: one is your basic life insurance exam, and then there’s usually another exam that focuses on your state’s particular insurance regulations.
If you fail an exam or don’t complete it within a certain period (usually 6 months), you’ll have to pay for and retake it.
Each attempt costs about half as much as the initial test!
That’s another thing you should budget for when becoming a licensed agent: if you do poorly on one part of your licensing examinations—you might need to pay again so that you can retake it!
These extra costs include any fees associated with expediting your license, which may be required depending on the processing period.
Lastly, other pre-licensing requirements include completing a fingerprint background check and attending three conferences per year.
Choose Your Path when you’re deciding how to become a life insurance sales agent, you need to think through whether going independent or agency-based will best serve your needs (and goals).
With more agencies being bought out by large financial companies who want their agents selling their products only, some agents choose to become independent to maintain some flexibility in their sales approach.
Prospects of a licensed life insurance agent
The good news for life insurance agents is that people live longer, and they’re increasingly making sure they have enough money for retirement.
So yes, there will be good business for you in 2021 and beyond—but it’s going to be increasingly competitive.
Another trend working against you: The Internet is changing how people shop, meaning fewer prospects will spend hours browsing through multiple salespersons before they make their choice.
Instead, they’ll go online and do their research so they can do comparison among agents or buy directly from a company with no intermediary at all.
To get ahead of your competition and become an elite licensed life insurance agent, note that not every prospect is going to come your way.
You have to find ways to market yourself and beat out other life insurance agents who want what you want: more customers.
Networking events (such as insurance industry conferences) are vital.
Always stay on top of professional publications; provide excellent customer service (you never know when word might spread)
Participate in community activities; offer free advice; offer low premiums; make sure your office has a professional look about it (nice furniture, clean desktops, etc.).
Being an ethical licensed life insurance agent is also essential.
Conclusion
Most individuals rely on agents to help them understand complicated financial matters and watch over their needs, which means you should always deal fairly with them.
An honest approach has proved to pay off, both professionally and personally.
If you keep things transparent and deliver value, people will reward you with their loyalty and even refer new clients your way!
Like any marketing, selling life insurance requires commitment but provides massive rewards if done correctly.
And while writing up policies isn’t precisely glamorous work — few enjoy delivering bad news — chances are someone will be grateful they met you once they pass away!
Just remember: This job takes hard work, initiative, dedication, and also flexibility!
FAQs
References
Becoming a Life Insurance Agent
Life Insurance License Application
