How to Become an Insurance Agent

Becoming an insurance agent is easy and affordable when you have the right tools and preparation—that’s where America’s Professor can help.

Whether you want to become a licensed Property & Casualty (P&C) agent/producer or you’re looking to branch out into life and health insurance sales, we offer the comprehensive insurance pre-licensing courses you need for success.

Insurance License Requirements

You don’t need a college degree to become an insurance agent—a high school diploma or GED is enough. But you do need a license for each type of insurance you plan to sell.

For example, to sell auto insurance and homeowners insurance, you need a Property & Casualty (P&C) license. To sell life insurance, annuities, and health insurance, you need a Life & Health (L&H) license.

Keep reading for a general overview of the steps you need to take to become an insurance agent and maintain your license. Note that licensing requirements vary by state. Be sure to check with your state’s department of insurance licensing division for up-to-date requirements.

1: Complete pre-licensing education.

Around half of US states have pre-licensing requirements. This means you must complete a state-approved pre-licensing education course—like the ones offered by America’s Professor—before you can register to take your insurance license exam.

Pre-licensing courses usually provide between 20 and 40 hours of insurance education and cover both national and state-specific information.

The insurance licensing exams are challenging. They cover a wide range of topics that aren’t common knowledge. That’s why it is strongly recommended that you take a pre-licensing education course even if your state doesn’t require it. This will greatly improve your chances of passing the insurance license exam on the first try.

2: Pass your state exam.

Most states now allow you to take the insurance license exam either in person or online. Online exams are proctored, which means someone monitors you through your webcam while you take the exam.

If you’d rather take the exam in person or your state doesn’t offer online exams, you can search for a test center near you through your state’s insurance department. They will direct you to the company that administers the exams in your state. Most states use Pearson VUE, PSI Exams, or Prometric.

The exams are time-restricted and typically contain anywhere between 50 and 200 multiple choice questions. But it will all depend on your state, and which license you’re testing for.

3: Get fingerprinted.

Most states require resident insurance agents to be fingerprinted and undergo a background check. There is usually an on-site fingerprint technician where you go to take your state exam. If you’re concerned that something will come up in the background check, contact your state’s insurance licensing department in advance to ensure it won’t inhibit you from obtaining your license.

4: Stay on top of continuing education (CE) requirements.

All states require you to complete periodic continuing education requirements to refresh your knowledge and learn about new laws impacting the insurance industry. How often you’ll have to complete continuing education varies by state. So do the individual requirements.

For example, insurance producers in Arizona are required to complete 48 hours of continuing education every license term (AZ license terms are four years). Producers in Arkansas are required to complete 24 hours of CE every two years.

What’s on the Insurance Licensing Exam?

The exams vary by state, but they share many similarities. In general, the exam will test your knowledge of a broad range of topics, from insurance basics to ethical business practices. All insurance licensing exams are broken up into two sections: a general knowledge section and a state-specific section covering laws and regulations for your state.

The test will likely consist of 50 to 200 multiple-choice questions, and you will be given around 1.5 to 2.5 hours to complete it. You will be told in advance how many questions you must answer correctly to pass (usually in the range of 70% to 80%).

Pre-test questions: Many states mix a small number of “pre-test” questions into the examination. These questions don’t count toward your final score, and their main purpose is to help the testing company assemble future materials.

You will know in advance how many of these questions will be included in your insurance exam. But there’s no surefire way to determine whether any given test question is a “real” scorable question or a pre-test question. Don’t bother trying to figure it out—just answer every question to the best of your knowledge.

Types of Insurance Agents

Insurance producers work either as captive agents (contracted to work for a single insurance company) or independent agents (selling policies for multiple companies). Read more about captive vs. independent agents.

The insurance industry is broad, with a wide range of products, from auto liability coverage to crop insurance. As such, agents may choose to specialize in a particular area. Here are the two most common types of insurance agents:

• Property & Casualty (P&C) – Property & Casualty agents sell homeowners insurance, auto coverage, umbrella (liability) insurance, and many other products.
• Life & Health (L&H) – As the name suggests, Life & Health agents sell life insurance, health insurance, as well as annuities, burial insurance, and more.

You will need to get licensed for all lines of insurance you want to sell.

Get Ready for Your Insurance License Exam with America’s Professor

America’s Professor is one of the nation’s most trusted insurance pre-licensing education providers. For more than 30 years we’ve been helping students pass their insurance exams with the most comprehensive study materials available anywhere.

Our video lectures, practice quizzes, and other tools will help you learn everything you need to know to pass your state licensing exam. Find your course and sign up today!

 

FAQ

Are insurance agents in demand?

Insurance agents are always in demand. Regardless of how well the broader economy is doing, people will always need insurance products—from auto liability to homeowners insurance—to protect their assets and meet the requirements of banks and lenders.

According to the U.S. Bureau of Labor Statistics, jobs for insurance agents are projected to grow 6% from 2021 to 2031.

Where do insurance agents work?

Insurance agents work in various settings depending on the type of insurance they specialize in and their specific role within the industry. An agent may work for an insurance company, at an insurance agency, at a brokerage firm, at a bank or other financial institution, or for one of the many digital insurance platforms that exist today.

How do insurance agents get paid?

Most insurance agents earn some income from commissions. But many agents also earn a salary while they build their book of business. Captive agents who work for a single company often receive a commission that’s a percentage of the value of the policies they sell (usually 5%-10%).

Do insurance agents make good money?

The median income for insurance agents (all types) is $49,840, according to the Bureau of Labor Statistics. But you can earn considerably more than this, depending on where you live and which products you sell.

For example, agents in Washington, DC earn around $100,000 a year. Read more about how much money insurance agents make.

How many hours per week do insurance agents work?

Most agents work full-time (40 hours per week). Many agents spend their normal business hours with clients, either in person or on the phone. They may use their evening hours or early morning hours to complete forms or call insurance companies.

 

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