Insurance 101: How to Get Licensed as an Insurance Agent

Posted on January 15, 2021 by Emily Lazration in Business Compliance.
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The insurance industry offers plenty of rewarding career opportunities. As an insurance agent, not only will you work to protect your clients from various risks, but you’ll have the chance to advance your career and earn money. 

It’s important to note that specific requirements for becoming a licensed agent vary by state, but overall the process is quite simple. Let’s take a look at some of the basics of becoming a licensed insurance agent.

Types of insurance agents

Basically, an insurance agent is a salesperson who specializes in helping a client get insurance coverage from an insurance carrier. The carrier then issues the policy, holds the premium, and pays for claims. 

There are two main types of insurance representatives, captive agents, and independent brokers:

  • Captive agent: A captive agent is an insurance representative that sells policies on behalf of one specific carrier. While you can only sell for one carrier, captive agents tend to receive extensive on-the-job training and can benefit from the name recognition of the carrier. 
  • Independent broker: Independent brokers, on the other hand, can represent an insured on behalf of numerous carriers. An independent broker functions much more like a traditional small business. You’ll have more freedom, but marketing, operations, and day-to-day tasks of running an agency will fall to you. 

Understand what products you want to sell

Insurance products mainly fall into two categories, personal lines, and commercial lines. Some examples of personal lines include:

  • Health insurance
  • Life insurance
  • Homeowner’s insurance

Examples of commercial lines include:

  • General Liability
  • Commercial Property
  • Commercial Auto
  • Workers Compensation

The main difference between these two categories is that businesses need to purchase commercial insurance, and personal insurance is meant for individuals or families. 

Luckily, you don’t need to pick just one. You can obtain licenses to sell both types of insurance.

How to get licensed 

No matter which path you choose, here are some basic steps you need to take to start selling insurance:

  • Hold a degree. Many states require an applicant to have a GED or equivalent before they can start selling insurance. And, if you want to become a captive agent with one of the nation’s top carriers it’s recommended that you complete your bachelor’s degree. To compete as a top candidate, consider majoring in relevant fields such as business, sales, or risk management. 
  • Complete state requirements. Remember, each state has its own guidelines, however here are some basic steps you may need to complete.
    • Classroom courses
    • Self-study programs
    • Minimum hours or study or instruction
    • Pass an exam

Choose an agency management system

Whether you choose to start working as a captive agent or an independent agent, having the right technology platform will go a long way in helping you quickly and efficiently quote, bind, and manage policies for your clients.

Getting quotes for clients, especially those who own small businesses, traditionally takes days or even weeks. But, with the right platform, you can quote multiple policies at once, giving your clients more options to choose from. 

Final thoughts

Don’t forget that insurance agents also need insurance for the services they provide. Most notability you should obtain Errors and Omissions insurance to help protect you against any claims that result in a financial loss for your clients. With these basic steps in mind, you’ll be on your way to selling insurance in no time. To learn more about becoming an insurance agent, make sure to check out our free eBook.

Emily Lazration is the Content Marketing Specialist at CoverWallet for Agents, a tech company that makes it easy for independent agents to quote, bind, and service their customers. All online and in minutes.

Harbor Compliance does not provide tax, financial, or legal advice. Use of our services does not create an attorney-client relationship. Harbor Compliance is not acting as your attorney and does not review information you provide to us for legal accuracy or sufficiency.