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Launching Your Insurance Career eBook
This free eBook compiles expert advice for those starting a career in Insurance. It covers strategies for success and outlines the essential skills required in the industry today.Getting Started in Your Career
April 24, 2024
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Becoming an insurance agent offers significant growth opportunities and can be an excellent choice for launching your career or making a meaningful change. This step-by-step guide will help you learn more about the different types of insurance agents and how to become a licensed insurance agent.
In general, becoming a successful insurance agent requires a combination of education, licensing, ongoing training, networking, and dedication to being there for your clients when they need you the most. Most requirements to become a licensed insurance agent (education, exams, and continuing education) are determined by the state you live in and the area you plan on servicing.
The broadest way to categorize the different types of insurance agents is by how you are employed. You can either be an Independent Agent which allows you to represent multiple insurance companies or you can be a Captive Agent who works exclusively for one insurance company.
Another way to break down insurance agent types is by insurance lines (types). For example, life insurance is one type of insurance. Another is health insurance. This categorization method produces lots of different types of insurance agents.
Life Insurance agents specialize in selling life insurance policies that provide financial benefits to beneficiaries upon the death of an insured person.
Probably the most common line of insurance sold by agents in Health Insurance. Agents will help individuals and businesses find Health Insurance plans within their budgets.
Property and Casualty Insurance agents sell products that protect against damage or loss to property such as your car or your home or your business.
Agents specializing in Disability Insurance help individuals and businesses with plans that provide income protection in case the insured becomes unable to work due to illness or injury.
Long-term care Insurance Agents help the insured plan for long-term care services in the future like assisted living facilities and nursing homes.
Insurance agents can also be broken down by who their customers are. If you look at it this way, there are two major categories. Personal and Commercial customers.
A personal line insurance agent is someone who helps individuals find coverage for multiple personal items such as their car, their home, and their life insurance.
A commercial lines insurance Agent is someone who helps businesses find coverage options for their buildings, worker’s compensations, and liability insurance.
Below are five broad steps to becoming an insurance agent.
The first thing you want to do is decide what type or types of insurance you’d like to specialize in. In the industry, these are referred to as “lines of authority.” Here’s a rundown of the most common:
Life insurance: Selling policies and annuities related to providing for a beneficiary upon the death of the insured.
Health insurance: Selling medical, disability, Medicare supplement, and long-term care policies.
Property insurance: Selling homeowner, commercial property, and inland marine policies.
Casualty insurance: Selling auto, workers compensation, crime coverage, and professional liability policies.
Surplus line insurance: Selling coverage for unique or unusual situations with risks that aren’t covered by standard insurance, such as daycare insurance, oil drilling rigs insurance, and special events like state fairs, car races, and outdoor amusement parks.
Variable products insurance: Selling insurance products with an investment element. To sell this kind of insurance, you need certain securities licenses.
Personal lines insurance: Selling products like auto insurance, homeowners insurance, renters insurance, and policies for boats, motorcycles, and snowmobiles to individual consumers only.
Another option is becoming an insurance adjuster, which is the business of investigating and adjusting claims on an insurance policy. Insurance adjusters also solicit for the adjustment business.
Often you don’t have to pick just one line of authority. Individuals can combine certain lines, such as property and casualty insurance.
After you’ve decided what kind of insurance agent you want to be, the next step is to understand the basic requirements:
You need to be at least 18 years old to become an insurance agent.
You need to complete prelicensing education for your line of authority, which is determined by each state. The number of hours you’ll have to complete and the cost also varies by state.
You need to pass the state insurance licensing exam for your line or lines of authority. An insurance exam preparation package can help.
You need to pass a background check. The process varies by state and, in some cases, includes fingerprinting.
You need continuing education to keep or renew your license.
Now that you have a basic idea of what you need to do, it’s time to decide whether you want to sell insurance in your home state or some other state. (You can also sell in more than one state, but you also must abide by the rules for each.) As you saw in Step 2, each state regulates its own insurance licensing process, and each state’s regulations or rules are slightly different, so this is why deciding on where is so important.
After you’ve made your decision, check with the department of insurance in that state for the rules. The state bodies of government that regulate insurance have different names, so a good way to find out the name of the state’s insurance body is to go to the official website of the state and search for the insurance licensing rules.
Most state insurance web pages are quite helpful and often have handbooks you can download and read to get all the information you need to become an insurance agent in that state.
You’ll find out exactly how many hours of education (if any) you need, how to register for the exam, where to go for the exam, how you’ll get your score, and—if you pass—how you’ll get your license. Each state website will also tell you what kind of continuing education you need to keep or renew your license.
Now is also the time to research any agencies for which you want to work. Many have additional requirements for candidates or agents to follow that you’ll need to be aware of if you want to work there. Also, some agencies will hire you before you have a license, and they might have specific processes you need to follow.
You’ve done your research and know what you want to do. So, it’s time to get out there, get the insurance agent education required by the state and agency of your choice, take the exam, and pass it.
Armed with your license and your knowledge, you’re ready for an exciting and rewarding career as an insurance agent. Good luck, and don’t forget about keeping up with your continuing education (CE credits).
Below are commonly asked questions about becoming an insurance agent.
Insurance agents don't get paid directly by clients, but instead earn commissions on the policies they sell from an insurance company. This commission is a percentage of the premium paid by the insured. Most Insurance agents also receive salaries and bonuses from their employers.
Insurance agents need a license because licensing is an important part of the insurance industry. Becoming a licensed insurance agent means you have met the qualifications to sell insurance legally and ethically.
The most common types of insurance sold by insurance agents are probably car or home insurance. There are a lot of insurance agents who focus on Property and Casualty insurance which includes auto insurance but also homeowners and renters insurance.
Kaplan can help you earn a variety of state insurance licenses, including Life, Health, Property, Casualty, Adjuster, and Personal Lines. From live online classes to OnDemand online courses to self-study programs, we have a solution tailored to fit your budget and learning style.
eBook
Launching Your Insurance Career eBook
This free eBook compiles expert advice for those starting a career in Insurance. It covers strategies for success and outlines the essential skills required in the industry today.
Free Resource
Glossary of Insurance terms eBook
Download a PDF version of Kaplan Financial Education's Glossary of Insurance Terms.
