How to Get Your Life and Health Insurance License

To begin your career as a insurance agent, you have to get an insurance license. This license allows you to sell insurance and receive commission from the insurance companies you represent. In this article, I’m going to walk you through the steps you need to take to get your life and health insurance license as well as property and casualty if you want. I will also answer some of the most frequently asked questions people ask about getting licensed.

What Kind of an Insurance License Do I Need?

Different kinds of insurance require require different kinds of licenses to sell them. There are three primary types of insurance licenses that are the most common. They are:

Life Insurance A life insurance license allows you to sell life insurance policies.
Accident and Health An accident and health license allows you to sell other types of insurance like accident and health insurance policies.
Property and Casualty (P&C) A property and casualty license allows you to sell home and auto insurance.

To get start your life insurance agency from scratch, I recommend that you go ahead and get your life, accident and health license right from the start. If you are interested in selling home and auto insurance, then you’ll want to get your property and casualty license.

I personally have all three but never use my property and casualty license.

What’s the Difference Between a Resident and Nonresident Insurance License?

Before we begin going through the steps you need to take to get your license, you need to know that insurance licenses are handled at the state level in the United States. If you want to sell life insurance in a particular state, you have to be licensed in that state first.

You have to get licensed in the state you live in first before you can get licensed in other states that you don’t live in. Here’s how both licenses work:

Resident insurance license A resident insurance license allows you to conduct insurance business in the state you live in. It is issued by the department of insurance in the state in which you live. If you don’t conduct any business outside of your state, it could be that you will never need the next type of license.
Non-resident insurance license A non-resident insurance license allows you to conduct insurance business in the other states you do not live in. It is issued by the department of insurance in those states. In order to obtain a non-resident insurance license in any state, you must have a resident license in the state you live in first.

While your resident license requires several steps, the nice thing is that once you obtain your residence license, getting your nonresident licenses in other states is basically just paying a fee and filling out some paperwork for that state.

Alright. Now that you know what kind of license you need and that you have to have a resident license first, let’s walk you through exactly what you have to do to get that resident insurance license.

Step 1: Visit the Department of Insurance Website for the State You Live In

In my case, I live in Indiana and so I want to go the Indiana Department of Insurance website. I found the website I needed by going to Google and typing in “Indiana department of insurance”. Just substitute whatever state you live in for “Indiana.” Chances are you’ll see a link to your state’s department of insurance will be one the first listing in the search results.

Once on the department of insurance website, I located a link for “licensing” and then looked for information on resident licensing. This took me to a page that had several sections on it that had all of the information and requirements needed to get a resident license.

Step 2: Complete the Pre-Licensing Requirements

The next step is to figure out what requirements you need to complete in order to get your license. Usually this is some sort of education that you can do by going to class or studying on your own online. The companies that provide this education need to be approved by the insurance department.

In Indiana’s case, they list the requirements on a website called Sircon.com. I looked through a few of them and looked for one that offered online courses through webinars. That would be important to me as it probably would be to a lot of people because it’s a lot easier to fit into your schedule. But if going to class is your preferred method of study, be sure and look for approved providers who offer in person classes instead.

There were a lot of providers but I found one that I liked called ExamFx.com. Because I got my license many, many years ago, I can’t say personally how good it is. I have had other people tell me it is ok. When I did mine I actually went to a week long class.

As I mentioned above, you want to take the Life and Health insurance pre-licensing.

After you’ve completed the required pre-licensing courses, you’ll be ready for the next step.

Step 3: Take and Pass Your Insurance Exam

Now you are ready to take your exam. Just like the courses had to be offered by approved providers, the exams are also only given by those approved by your state.

If you chose a good provider for your course work before the exam, you should be prepared and be able to pass the test.

I use to always joke with new agents that no one with the firm had ever failed the licensing exam. I did this because of the movie The Firm with Tom Cruise. Before he took the bar exam, all of the associates of the firm came by and reminded him no one with the firm had ever failed it.

The test use to be pass fail in my state back in the 1990’s when I took it. I found out immediately after I took it if I passed. If you don’t pass, then you can take it again after a set amount of time.

Once you pass your exam, you are nearly there and ready to take the next step.

Here’s a video I did about the process if you want to watch it as well as read the rest of my instructions.

Step 4: Submit Your License Application to the Department of Insurance and Pay Your Licensing Fee

Once you pass, you’ll go back to your department of insurance website to apply for your license. You’ll have to submit your pre-licensing requirements along with the licensing fee. Most of this is done electronically these days.

After a short period of time, and a few dollars later, you’ll be legal in the eyes of the department of insurance and can now get legally get paid commission from insurance companies

Congratulations! But you aren’t finished yet. There’s one final important thing to remember.

Step 5: Follow the Law, Complete Your Continuing Education Requirements and Renew Your License When Required

Each agent is responsible for follow the insurance laws in the states you are licensed in. Those vary by state. Your home state usually requires you to complete so many hours of continuing education every year or two. That education carries over to non-resident states as far as I know.

You don’t want to skip the continuing education requirement or forget to renew your license. I know one agent who forgot to renew his license and continued to write insurance after his license expired. He was disciplined by the department of insurance, put on probation and had to pay a hefty fine. Now every time he applies for a non-resident license, it’s a huge hassle to document what happened to that state’s satisfaction.

How Much Will It Cost Me to Get Licensed?

To get your licensing completed, besides the time you need to invest in completing the steps, you can expect to pay between $300 to $500 to your life and health insurance license.

How much exactly will depend on the fees in your state and whether you take classes instead of self study.

Here’s a short breakdown for Indiana to give you an example.

Pre-licensing $150 self study
Exam $50-$100
License fee $40

To get a better idea, just check out the resources I mentioned above from your state’s department of insurance website.

Should I Take Classes in Person or Self Study?

This is a tough one. In general, if you retain things easily and are a good test taker, you won’t have any problem getting licensed and self study might work for you. However, if it’s harder for you to retain stuff, then in person sessions might be a better way for you to go.

I will say the nice thing about in person classes is if you have a good instructor, they’ll make sure you know what you need to know to pass.

Remember, all you have to do is pass. After you pass no one thinks about it anymore or remembers what you got.

As far as how hard the tests are, I’d say the P&C exam is little tougher than the life and health exams if you decide to take it but there’s no reason you can’t pass it.

Will I Know Everything I Need to Know to Be a Successful Life Insurance Agent After I Am Licensed?

Unfortunately, the study you do for the exam helps you to pass the exam. And while it’s definitely important, the licensing process doesn’t teach you what you need to know to be successful agent. The real learning starts once you are licensed.

Conclusion

The steps involved in becoming an independent insurance agent are really easy and are pretty similar from state to state. It just takes a little bit of time, a little bit of studying and a few hundred dollars.

Once licensed in your home state as a resident agent, you can then apply to be a non-resident insurance agent in state in the country. I know I’m licensed in double digit states and have worked all across the country over the years.

You can eventually too. After you follow these steps to begin your journey as an agent, you’ll be well on your way.

If you have any problems, remember you can always call your the department of insurance and they will be glad to help.

Let me know if you if you pass your exams and what your experience was like in the comments. Also let me know if you have any questions!

Good luck!

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