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How Can I Become A Licensed Insurance Agent? Schools, Training And Cost

  • March 19, 2023

Starting a career as an insurance agent can be an attractive opportunity for new and established professionals, especially if you have an Insurance agent license. Depending on the area of ​​emphasis, it is a job that allows flexibility and a diverse list of interesting clients.

The requirements to become an insurance agent vary by state, but can often be completed much faster than other professions that require a license.

In this article, we promise to make available detailed information on how can I become a Licensed Insurance Agent as well as its schools, training, and cost.

Table of contents

What Is An Insurance Agency?

An insurance agency provides coverage for catastrophic and unwanted events. “These [agencies] help individuals, families, and businesses select insurance policies that provide the best protection for their lives, health, and property,” according to the US Bureau of Labor Statistics.

An entrepreneur who wishes to open an insurance agency must first complete the required coursework and obtain a license as an insurance agent.

Who Is An Insurance Agent?

An insurance agent is defined as a person employed to sell insurance policies to clients. That is just a general description of the job and does not reveal specific tasks or details about what an insurance agent does on a day-to-day basis.

How Long Does It Take To Become An Insurance Agent?

Most people can become one in just a few weeks. If you choose to take an online course that requires a certain number of hours of study, your ability to complete it will largely determine your license time.

A week or two may also wait for the license to be issued once your exam and background check is completed.

What Are The Qualifications I Need To Become An Insurance Agent?

  • A high school diploma, although many begin with a bachelor’s degree
  • License is required to work as an insurance agent
  • Good customer service skills: you should feel comfortable talking with others
  • Experience working in a relevant field, such as sales (not a requirement)

Steps To Obtain An Insurance Agent License

If you are ready to launch into the world of insurance sales, consider these steps to become an insurance agent or agent.

Decide what type of insurance agent you want to be

You must decide between two types of insurance agents when you start your insurance agent business: captive and independent.

Captive insurance agent

A captive agent works with only one company, usually a large national insurance provider. The captive company provides training and support to the agent. In return, the agent represents only the company’s products and cannot sell policies for a competitor.

Many captive insurance agents must sign a non-compete agreement, limiting them to a single insurance company for a specific period.

Commission rates may be lower depending on the marketing support provided to the agent by the carrier. Independent insurance agent

An independent agent also called an insurance broker is someone who works with more than one insurance company. The agent provides customers with multi-company policy budgets to find the best policies and prices.

Independent agents have greater flexibility in their product offerings but receive less training and support from the insurance companies they work with.

Agents must also build their brand in the markets where they work, instead of relying on the marketing support of known insurers, which can make the path to becoming an independent insurance agent more challenging.

Decide Which Insurance Products You Will Sell

There are many types of commercial insurance and personal insurance policies. Personal lines of insurance focus on coverage for individuals and families. This includes motor vehicle insurance, home insurance, and life insurance.

Commercial insurance agents focus on providing coverage to companies with policies ranging from general liability insurance to property insurance and coverage of errors and omissions.

Review Your State’s Licensing Requirements

Before you begin the process of obtaining a license, you will need to know what products you will sell (see above) to choose the right license for your insurance agent business. The names of the licenses will vary according to the state in which you live.

The two most common types of licenses are:

Property and accident license, for agents who plan to serve clients who need a car, home, and business insurance.

Life, health, and accident leave, for agents who plan to serve people who need insurance related to life events, such as life insurance, accidents, or health insurance.

Your career plan may require that you obtain multiple licenses. You must obtain the details of your state’s licensing department or the company you plan to represent.

Why do insurance agents need a license?

Insurance agents must be licensed to talk about insurance products or complete sales. Each state has unique licensing requirements. People who operate without a license may face penalties or legal action.

Take An Insurance License Exam

Most states require you to complete a pre-license class. Many of these can be taken online or through an in-person course. Requirements vary by state, from a one-day class to 20-40 hours of online training.

Once you have met the prerequisites for your state exam, you must schedule your official insurance exam. An outside company generally supervises these exams.

You will access a test site on the scheduled date and time to take the test online. You may need to show proof of your completed training class before taking the exam.

What to expect during your insurance license exam

The exam process is generally not difficult, especially if you have completed the pre-exam requirements and are prepared. It will arrive at the scheduled time and will be placed on a computer.

The exam questions are usually in multiple-choice format. When you finish the exam, you will immediately find out if you passed it. If the first attempt does not pass, you can reschedule it and take it again.

Submit Your License Application And Background Check

When you pass the state insurance license exam, you will send all required license applications to your state’s licensing department. Some states will require a background check, which may involve fingerprints.

Once you have an official license, you can legally discuss and sell insurance policies.

Get An Appointment With An Insurance Company To Sell Products

An insurance company must appoint you before you have the authority to sell your products. You must complete an application with each insurance company for which you plan to sell products. You will be granted an appointment and a binding authority registered on your state insurance license.

Find And Maintain Customers

Do you have a license? Now what? You should start looking for customers. Many agents start writing their own insurance and prospecting for friends and family.

This is a great way to get a good idea of ​​how systems work and feel comfortable citing new coverage.

At this point, starting marketing your agency is a good idea. You may want to join the local chamber of commerce, create a website and promote your business online, or explore local advertising options.

Many options are available, and most will require some trial and error until you find what works best for you.

Protect Your Business

As a new insurance agent, you will also want to ensure that your agency is protected by commercial insurance. There are several types of coverage to consider:

General liability insurance: general liability coverage will protect you in a wide variety of situations. One of the most common risks is claims of bodily injury if a client is injured while in his office. Something as simple as tripping over a carpet could cause an injury and a liability claim. This coverage can be combined with commercial property insurance in a business owner’s policy, often at a discount rate.

Errors and omissions: almost all insurance companies require E&O coverage before they are allowed to write their policies. This protects your customers against mistakes that you or your staff may make. For example, you can accidentally remove the wrong car from a policy, and it is not covered in an accident. If it is a mistake that you are responsible for, your E&O coverage will be taken care of by the customer.

Is A Job As An Insurance Agent Good? Salary And Employment Growth

The salaries of insurance agents are usually linked to commissions, which can account for a wide discrepancy in payment. Salaries also vary greatly depending on the skills, specialties, and experience of an agent.

How Much Does An Insurance Agent Earn?

According to the Bureau of Labor Statistics, the average annual salaries for insurance sales agents were just under $50,000 in the previous years.

However, the top 10 percent of agents earned more than $125,000 annually, while 10 lower percent took home a little over $27,000.

Payscale.com places average salaries for entry-level agents at just over $33,000 yearly, while more experienced agents earn approximately $42,000 annually. Professionals and advanced career agents with skills in customer relations, sales, and account management can potentially earn more.

The employment of insurance agents is expected to increase by 10 percent until 2026, reports the BLS. That translates into approximately 50,000 new positions during that time period. Demand is expected to be higher for independent agents, as large insurance organizations put more emphasis on these agents to help control their costs.

Can I Get An Insurance License Online?

Although insurance agents play a key role in the industry, many consumers in today’s highly connected world carry out their own online research and purchase policies, reducing the demand for new agents.

Even so, online shoppers often interact regularly with agents to help them fully understand their policies, make changes, file claims and perform other routine business.

Employment prospects are expected to be better for agents with a college education, excellent sales, customer service, and communication skills, and multilingual agents that can serve a broader customer base.

What Does An Insurance Agent Do?

Insurance agents sell and negotiate life, health, property, or other types of insurance to meet the needs of their clients. As an insurance agent, you can work for an insurance company, refer clients to independent brokers or work as an independent broker.

As an insurance agent, he develops relationships with potential clients through contacts and references. Those relationships are the basis of your business.

You can develop a long-term customer base through many channels, including referrals, cold calls, email, social networks, and postal mail. You can also present to groups at work-related meetings or speak publicly at an insurance-related event.

In addition to finding new clients, as an insurance agent, you must maintain relationships with existing clients. Your reputation as an insurance agent depends on your being a reliable first point of contact when your client needs to file a claim or increase their coverage due to important life events, such as buying a new car or having a child.

Insurance agents must assess the needs of their clients and propose plans that meet the criteria, as well as the clients’ financial status. You will develop an understanding of your clients’ needs and financial capacity by scheduling meetings, determining the scope of current coverage and investments, and building long-term goals.

In addition to determining customer needs, you must also develop a protection plan by quoting rates for immediate coverage and long-term goals.

Marketing also plays an important role in the daily tasks of an insurance agent. Successful insurance agents implement marketing strategies to promote new and current insurance policies. Marketing activities are also crucial to attract new clients to your agency.

Additional Responsibilities of An Insurance Agent

  • Attend meetings, seminars, and programs to learn about new products and services.
  • Calculate premiums and establish payment methods.
  • Report the progress of the initiatives to interested parties.
  • Maintain accounting systems, databases, and records.
  • Monitor insurance claims
  • Satisfy customer expectations to ensure the satisfaction of insurance coverage.
  • Find out about the industry continuously and learn about new products and services.
  • Comply with all policy requirements.
  • Help clients resolve any claims about their insurance.
  • Customize insurance programs to meet the individual needs of customers.
  • Ensure that the policy requirements are met, including filling in the corresponding forms.
  • Inspect the property to examine its general condition and decide its insurance risk.
  • Ensure that all documentation is complete and filed to establish insurance policies.
  • Help clients to complete insurance applications correctly to act as an intermediary between the client and the insurance company.

Is An Insurance Agent Different From An Insurance Broker?

Both insurance brokers and insurance agents act as intermediaries between insurance buyers and insurers. The main difference between an insurance broker and an insurance agent is who each one represents.

While a broker represents the insurance buyer, an agent represents one or more insurance companies.

What Does An Insurance Broker Do?

The insurance broker that sells commercial insurance specializes in insurance and risk management. Unlike insurance agents, brokers work for you instead of insurance companies.

An insurance broker uses your knowledge and experience to help you evaluate your unique insurance needs, find the best coverage and value and can help you when making a claim.

As insurance brokers work directly with insurance buyers, you can be sure that an expert is available to receive your calls and answer any insurance questions you have.

Where Can I Study To Become An Insurance Agent?

Universities and schools offering insurance education, sometimes called risk management, usually do so through a college of commerce. Students considering insurance schools consider the type of degrees available, the availability of internships, career prospects, and tuition.

The two most common types of insurance or risk management degrees are the Bachelor of Science (B.S.) and the Bachelor of Business Administration (B.B.A.). However, there are also advanced degrees and diploma programs available.

Fisher College of Business, Ohio State University

Tuition: $10,037

Ohio State University’s Fisher College of Business prepares students for professional careers in the global financial services industry by supporting the development of analytical and problem-solving skills in life and health risk management, employee retirement plans, social security and human resources, and commercial management Property and liability risks.

Tuition: $6,507

The Risk Management / Insurance course is designed to meet the academic needs of professional insurance and risk management practitioner.

The curriculum for risk and insurance aims to familiarize students with the effects of risk and uncertainty on the economy and society.

Fox School of Business, Temple University

Tuition: $15,188

The Risk Management and Insurance Program (RMI) at the Fox School of Business Temple University, Department of Risk, Insurance and Health Management, prepares students to identify and assess various sources of risk, and then solutions to manage those risks through insurance selection and implement and other mechanisms of risk transfer and distribution.

Graduates of this program often move to the risk management or HR departments of large companies and other organizations. You can also take challenging positions in insurance or performance consulting firms, brokerage firms, agency businesses, or insurance companies.

G. Brint Ryan College of Business, University of North Texas

Tuition: $9,730

The University of North Texas Risk Management and Insurance (RMI) program has provided insurance courses for over 70 years and is one of the leading programs in the Southwestern United States.

With a professional focus on risk and insurance, it offers a comprehensive insurance curriculum that prepares our students for a variety of career opportunities.

Many of our students have internships that count toward our curricula. In addition to a BBA degree, students can also earn an RMI Minor or RMI certificate.

The program works closely with the risk management and insurance industry at both national and regional levels to provide students with hands-on experience.

In addition to a plethora of locally sponsored scholarships, UNT RMI students are the winners of nationally competitive awards, often worth several thousand dollars.

Wisconsin School of Business, University of Wisconsin-Madison

Tuition: $10,415

The Risk Management and Insurance (RMI) course at Wisconsin School of Business prepares students to identify, analyze and manage the risks associated with operating for-profit and non-profit organizations.

The students take courses that are geared to practical knowledge and competence-oriented training and are tailored to the individual interests and needs of the employer.

The current range of courses reflects the strength of our faculty research and supports the Wisconsin School of Business initiatives in analytics and navigation.

The school offers basic courses such as Principals of Risk Management as well as in-depth courses such as Risk Finance, Risk Analysis and Behavioral Research, Commercial Insurance Contracts, Insurance, Personal Care and Sustainability Risk Management.

Terry College of Business, University of Georgia

Tuition: $11,622

The UGA’s Terry College of Business has a bachelor’s degree in business management in risk management and insurance. You gain important skills in employee benefits, life insurance, business risk management, and more.

Graduates of the UGA have acquired a variety of jobs, including actuaries, claims settlements, risk analysts, and insurers

Miller College of Business, Ball State University

Tuition: $13,369

The Miller College of Business is one of the best business schools in the country. In addition to his reputation as a researcher and his academic excellence, Ball State is known for its active student population. More than 400 student organizations and associations are located on the campus.

At Ball State, you’ll learn how to identify risks to individuals and businesses. This risk management program helps students identify insurable and uninsurable policies and teaches students how to reduce risks.

Indiana State University

Tuition: $10,681

Having earned a bachelor’s degree in insurance and risk management in the State of Indiana, you are well-prepared to succeed in the financial services industry.

This is an ideal program for those hoping for leadership roles. They have the opportunity to participate in paid internships, mentoring relationships with industry leaders, and networking events.

Indiana’s Online Bachelor in Insurance and Risk Management is one of only 36 such undergraduate degree programs in North America.

Carlson School business program, The University of Minnesota in the Twin Cities

Tuition: $16,242

The UMN School of Management offers a degree in business administration specializing in finance and risk management insurance. This broad program covers everything from finance theory, law, risk mitigation, and government involvement.

At UMN, you can study abroad through the Carlson School Business Program.

Franklin University

Tuition: $11,641

Franklin University’s transfer-friendly risk management and insurance study program are designed to give you a complete understanding of all aspects of this growing field.

Franklin offers professionals many practical and affordable online programs, including a Bachelor of Science in Risk Management and Insurance. This program uses an asynchronous format that allows students to freely access course materials and submit tasks without having to commute to campus.

FAQs | Becoming a Licensed Insurance Agent

While taking two or four years to earn a college degree can enhance one’s job prospects, in many cases, one can become an insurance agent after completing only a pre-licensing course, which can take several days.

According to that data from the Bureau of Labor Statistics: The median annual wage for insurance agents was $48,150. The highest-paid 10% of insurance agents earned more than $116,940 annually. The lowest-paid 10% of insurance agents earned less than $26,120 annually.

Nevertheless, the passing score for all exams is 70%, and utilizing exam study tools can help you gauge whether or not you are on target to pass on the first try. The average exam-taker should expect to spend about 35 to 40 hours studying to pass the life and health insurance exam

There are a number of different kinds of insurance, health, life, and Property-casualty are the big divisions. Life offers you the highest commission on a new sale. Commissions for renewals are very small.

Conclusion

An insurance course is designed to completely understand the insurance industry and the principles of risk management, property and casualty insurance, life/health insurance, and insurance products available to mitigate individual and business risks.

Therefore, understanding how to become a licensed insurance agent, can give you a competitive edge in pursuing your career.

References

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