Here’s what applicants need to know about insurance licensing in the US

Insurance licensing is straightforward when applicants are well prepared.

The insurance industry is having a resurgence after the devastating impacts of the Covid-19 pandemic. People are seemingly more risk-aware and are pivoting towards the industry. Consequently, employment in the industry is also on the rise. Insurance Talent Jacobson has noted that the industry has already added 16,300 jobs since May last year with employment opportunities still increasing.

Many people are now more interested in working in insurance. In order to work in the industry, potential workers may have to obtain an official insurance license. The process of obtaining an insurance license can be made easy when applicants know what to expect. Here is some important information to ensure that applicants are on the right track.

Types of Insurance

The first choice applicants need to make is to figure out what type of insurance they want to specialize in. Often referred to as the “lines of authority”, applicants are encouraged to research the variety of insurance policies available such as home, business and life insurance.

The two most common types of licenses are a Property and Casualty Insurance License, and a Life and Health Insurance License. Applicants can apply for either one or both of the licenses, depending on the policies they intend to sell.

Pre-Licensing Education

Many states require applicants to take part in a pre-licensing education course. The course often includes practice exams, study calendars, modules, study guides and access to instructors for assistance. The course generally ranges from between 20 to 40 hours depending on the state. Notably, even if their state does not require it, many applicants still make use of the pre-licensing education course as it helps them to better prepare for the exam.

Applicants should note that a college degree is not a requirement for obtaining an insurance license. However, it will likely be beneficial in the long run as it may lead to better opportunities in the industry. If applicants want to pursue a degree they should look at courses in either business, economics, marketing and finance.

The Licensing Exam

After applicants have met all the exam requirements, they can finally take the exam. The exams are normally timed, proctored and multiple-choice. The number of questions can consist of around 50 to 180 and will cover a range of content. While the exam content is state-specific, all the exams are relatively complex.

Notably, applicants need a scaled score of 70 to pass the exam. While applicants may retake the test multiple times, it is of the recommendation to sufficiently prepare for the exam in order to pass it on the first try. There are myriad online resources available and applicants are welcome to make use of them before taking the exam.

Application Requirements

Applicants are of the requirement to complete an official license application. This generally happens after they have passed the exam. The application is relatively straightforward and applicants will need to provide basic information about themselves. Importantly, applicants will also have to submit their fingerprints at their own cost and be ready for the state to undertake a background check.

Time and Money

A key question that applicants have is how much time and money they will have to spend on getting their license. As some of the requirements are state specific, applicants can easily spend as much as $350 on the whole process. At the same time, applicants should bet on spending around two to eight weeks completing all the required steps.

In this period, applicants would complete the pre-licensing education course and the exam, while their state would have done the background check and reviewed their application. At the end of this, applicants will be provided with their official insurance license and finally start their journey in the industry.

Insurance Renewal and Continuing Education

In the US, insurance licensing is a continuous process and does not stop once applicants obtain their license. Applicants have to renew their licenses every few years with the exact years of renewal depending on the state the license is of registry. In the renewal period, applicants have to take part in insurance continuing education in order to maintain a high level of expertise. The continuous education is also state-specific and can take between 16 to 40 hours while the cost may range from $40 to $100.

The Main Takeaway

The post-pandemic world has provided new job opportunities in the insurance industry and many people want to take advantage of it. The process of obtaining an insurance license is state-specific and is relatively straightforward once applicants know the process. All applicants need to take an exam while some also have to take part in a pre-education licensing course. Overall, the application process is easy to follow but does take some money and time. Lastly, applicants should also note they will have to renew their license and take part in continuous education courses.