How to Get a Life Insurance License

How to Get a Life Insurance License

Life Insurance is a booming industry. According to the Bureau of Labor Statistics, by 2020, there were 409590 life insurance agents in the US alone. You can always find a job opening for a life insurance agent. Jobs are almost available in abundance. Becoming a life insurance agent is a sure-shot way of finding suitable work opportunities or supplementing your income with part-time gigs.

Becoming a life insurance agent requires passing an exam and meeting all the other eligibility requirements. Finally, the last step requires a background check. A life insurance license is your key to starting a whole new career.

What is the Process for Getting a Life Insurance License?

Obtaining a life insurance license involves a multi-step process that requires dedication and understanding of the insurance industry. While the process is straightforward, it involves several key steps, including education, examination, and background checks. Depending on your state of residence, you must follow a step-by-step procedure to get a life insurance license. Generally, the process is as below:

  1. Complete the pre-licensing education mandated by your state's insurance regulatory body and submit an official life insurance license application to the same authority
  2. Pass the state exam for life insurance licensing. In many states, you have the option to choose between obtaining a license specifically for life insurance or a combined license for life and health insurance, depending on the scope of products you intend to sell.
  3. Successfully pass a background check conducted by the state insurance regulatory authority, which may include fingerprinting and a review of any criminal history.
  4. Get your license, and you are ready to work as an agent.

What is the Difference Between Life Insurance and Life & Health Insurance?

The key difference between a life insurance license and a life & health insurance license is the range of products you are authorized to sell. A life insurance license allows you to sell policies that provide a death benefit, while a life & health insurance license also enables you to sell health insurance policies covering medical expenses.

Hence, you can sell universal life insurance as a life insurance agent. A life and health insurance license allows you to sell life insurance products and health insurance schemes that cover medical expenses.

How Hard is a Life Insurance Exam?

The content of the life insurance exam usually depends on the respective state life insurance organization. Tests can vary from state to state. The best way to prepare for the exam is to review the topics deeply.

Thorough knowledge of the exam topics significantly increases your chances of passing the life insurance exam. Learning the topics well and understanding the overarching knowledge is a sure way to boost yourself. 

What Topics are Covered in Life Insurance Exam?

Although different states have different exam requirements, most topics remain the same. To learn more and succeed at the chances of passing the exam, you should cover all the below topics thoroughly.

  1. General knowledge about life insurance
  2. In-depth knowledge about life insurance policies, including their terms, conditions, and a clear explanation of how they work
  3. Options available in life insurance coverage
  4. Annuities
  5. Tax implications related to life insurance

If you plan to take a combined exam of life and health insurance policies, make sure to learn all the details about health insurance.

How to Pass the Life Insurance Exam?

While there are no guarantees of passing the exam, adequately preparing for it by understanding the material and meeting the state's requirements can greatly increase your likelihood of success. Here are some of the ways to help you increase the chances of scoring a perfect ten on the answer sheet:

#1. Understand your state's requirements and get the exam outline: Contact your state's insurance regulatory body to understand their specific licensing requirements clearly. Also, ask them to provide you with the exam outline to start with.

#2. Collect Study Material: Once you have the exam outline, now is the time to collect the study material. You need to collect and bring printouts, books, or other online material together in one place.

#3. Prepare a study plan: Once you have the exam outline and have collected the study material, it’s in your best interest to make a realistic plan to study for the exam. Waiting till the last moment is not recommended. The exam is no easy feat. You will have to put in the work to pass the exam.

What is the cost of the exam?

Depending on your state, a Life Insurance License Examination can usually cost between $43 and $150.

What is the passing score for the exam?

You must score at least 70% to pass the exam and become eligible for a life insurance license.

How many questions does the exam carry?

Typically a life insurance license exam has 105-150 multiple choice questions depending on whether you are taking only a life insurance exam or a combined one with health insurance. It also varies according to the state.

How long does it take to get a life insurance license?

Getting the license after completing all the requirements can typically take a few weeks.

What are the fees and costs involved in the application procedure?

The entire process requires you to pay at different stages. Although all costs vary for each state, a general cost structure can be as follows: Pre-licensing education: Depending on the course, it can cost between $129 to $249. Next, you need to pay for the licensing exam, registration fees of about $50, application processing fees, and fees for fingerprinting, if required.

What are the Benefits of a Life Insurance License and Becoming an Agent?

#1. Job Prospects
One online search will reveal that life insurance jobs are available year-round. Getting a life insurance license is a sure-shot way of always keeping yourself ready to grab a great opportunity. Since most companies hire agents on a commission basis, they are always looking for new agents. #2. Income Generation
A Life Insurance license gives you the ability to earn full-time or passive income. Life insurance can offer high commission rates within the insurance sector, though the actual rate varies and is not universally set at 100% of the premium. Although your earning majorly depends on how many clients you can bring in and close the deal with, you can earn handsomely if you give your full focus. It’s also a great way for you to become a part-time agent to supplement your main income.

What Skills Do You Need to Become a Successful Insurance Agent?

#1. Proactive Communication

To make the most of your life insurance agent career, having brilliant communication skills is non-negotiable. You need to be direct and precise and show the right persuasion skills combined with sympathy for the customer. It is your sole job to explain and answer everything about life insurance clearly. And never show yourself as too eager to sell.

#2. Great Customer Service

Successful life insurance agents can project themselves as capable, trustworthy, and an expert in the field. Interpersonal skills and relationship building can take you a long way.  Remember, every client interaction is an opportunity to get word-of-mouth publicity. People will always remember and recommend you for being smart, reasonable, and stable.

#3. Taking care of your health

Maintaining your health is crucial, not only for personal well-being but also for sustaining performance and resilience in the demanding role of a life insurance agent.

Don’t take rejections or a poor month's performance personally. It is highly advisable to always have an emergency fund with you for the dry days. This will help you ease up when there’s not much happening while allowing you to bring focus on strategizing the next move and performing well.

The Bottom Line

Getting a life insurance license can take around 2 to 3 months. Ensure you fill in the application’s up-to-date details and prepare well for the exams. Working in the insurance sector is demanding but pays off well in the long term.

See Also

Difference Between Term and Whole Life Insurance

What is Universal Life Insurance?

State Farm Medical Insurance

What is Short Term Medical Insurance?

Short Term vs Long Term Disability

How Much Life Insurance Do I Need?

Current Version
March 10, 2024
Updated By
Andrea Morales G.

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