Do you find satisfaction in helping to protect the security of the public? If so, then you probably need to find a career as an insurance agent. With an increased demand for insurance policies, a career as an insurance agent could be highly fulfilling. Insurance agents enjoy a lot of job flexibility as they choose their work environment. They have high earning potential, job security, and other career benefits. If you are considering becoming an insurance agent, learning the educational requirements, components of a successful insurance agent career and their core responsibilities should be the first step.
Insurance sales agents act as intermediaries between insurance companies and subscribers. They sell various insurance policies. They specialize in multiple types of insurance, including property insurance, health insurance, life insurance, auto insurance, and long-term care. They evaluate the needs of an individual to determine the most effective insurance policies. Insurance agents also offer financial advice to clients, especially those nearing their retirement age.
But what does it take to become an insurance agent? To become an insurance agent, you need to earn a bachelor’s degree in business, economics, or finance. You might opt to major in risk management or insurance. Specialization in risk management is significant, particularly for those who want to gain comprehensive knowledge in insurance. As an aspiring insurance agent, you need to complete licensure requirements before pursuing a job in an insurance company. This article explores the various aspects of becoming an insurance agent, including:
- Types of insurance agents
- Licensing requirements for insurance agents
- What to expect during an insurance license exam
- Where to find a job as an insurance agent
Types of Insurance Agents
Insurance agents are sales agents who specialize in helping businesses and individuals protect their properties against certain risks with insurance. Insurance agents mainly specialize in casualty insurance and property insurance. As an insurance agent, you will either work for a specific company or multiple companies. Hence, before considering pursuing a career as an insurance agent, you need to know the different types of insurance agents. This will help you determine the most effective type that meets your career goals. This page explores the different kinds of insurance agents, including the aspects you need to know about the types of insurance agents.
What Are the Different Types of Insurance Agents?
Although a substantial number of Americans have insurance policies, only a few understand the different distribution channels for their policies. Whether you seek to get a life insurance policy, property insurance policy, or health insurance, you need the expertise and knowledge of insurance sales agents to get an insurance policy. But are you aware of the different types of insurance agents? Would you buy a policy from an insurance broker representing one insurance company or an agent representing multiple insurance companies? This article will help you choose to explore the different types of insurance agents and their benefits if you lack the answer.
- Captive Agents
Captive insurance agents are also called exclusive agents. Captive agents represent a single insurance company. In some cases, they might represent a specified group of an insurance company’s licenses. With this, a captive agent can only offer a price for an insurance policy. For instance, with a life insurance policy, the life insurance agent will only provide you with a quote from the insurance company they work with, irrespective of competitive prices. In most cases, captive agents are paid on a commission basis as they are do not work for the insurance company they represent. One advantage of captive insurance agents is that they are brand recognition. Hence, they can easily be identified and accessed.
- Independent Agent
An independent insurance agent is an insurance business that represents multiple insurance companies. Independent agents are commonly referred to as insurance brokers or independent contractors since they can sell insurance policies offered by many different insurance companies. They have a contract to sell the insurance policies, unlike captive agents who earn commissions. The independent agents do not advertise themselves and the companies they represent nationally. These types of insurance agents are unique and not easily identified. The brokers answer directly to their clients and not to the insurance companies they are in contact with. With this, they can offer multiple quotes for insurance policies for businesses and individuals. Independent agents understand the community business environment, leading to the right coverage for your properties.
Why Is It Important to Delineate Between Different Types of Insurance Agents and Their Career Paths?
If you consider pursuing a career as an insurance agent, it is vital to understand the different types of insurance agents and their career paths. Understanding the other kind of insurance agents will help you identify the most suitable career path that meets your personal goals and career prospects. Understanding the different types of insurance agents will help you determine the career outlook for each type, enabling you to identify the most promising and rewarding career type.
What Else Should You Know About Types of Insurance Agents?
It is essential to note the employment terms of each type of insurance agent. For instance, captive agents always make a commission. Therefore, the captive agents must strive to build and maintain a large client base to ensure higher commissions. The quotes for the policy are likely to be affected by the level of competition within the market, as they only offer policies at fixed prices. It is also vital to know each type of insurance agent’s pros and cons to ensure you get the best value for your money when buying a policy.
Licensing Requirements for Insurance Agents
Like insurance companies, insurance agents need to be licensed to provide insurance services. State agencies offer licensing for insurance agents. However, some licensing requirements are subject to federal regulation. The licensing requirements for insurance agents vary from state to state. Also, it might depend on the type of insurance services offered by the insurance agents.
To gain licensure, one must first meet the educational threshold set of insurance agents. This could either be a two-year associate’s degree or a four-year bachelor’s degree program. Upon completing the program, an aspiring insurance agent must pick a specialty, often referred to as lines of authority in the insurance industry. Those seeking a specialized license must enroll in and complete continuing education programs to gain licensure.
What Sort of Licensing Requirements Do All Insurance Agents Need?
Insurance licensing is quite complex as every state has its licensing requirements and procedures. However, there are common licensing requirements that all insurance agents need, irrespective of their specialty. The common licenses include:
- Fire and Casualty Insurance License: Insurance agents who seek to become an insurance broker, sell insurance policies, or open up an insurance agency must acquire a fire and casualty insurance license. The license allows an insurance agent to sell all insurance policies offered by property and casualty insurance carriers. It will enable an insurance agent to sell bodily injury coverage and long-term care insurance coverage.
- Agency and Individual Resident License: An agency and individual resident license allow an insurance agent to operate from within a given state. This type of licensing requirement is customarily provided and regulated within the state level. The prerequisites for licensing vary from one state to another. Always check your state website for licensing requirements.
- Agency and Individual Non-Resident License: Insurance agents seeking to provide insurance services to customers in multiple states need to obtain an agency and individual non-resident license. Nonetheless, there are always additional fees and requirements for each state that the agent operates in.
- Adjuster License: This another common type of license that insurance agents need. Insurance adjusters are individuals who settle insurance claims. Additionally, they usually determine what the insurance policy covers and to what extent. Therefore, insurance agents seeking to become claims adjusters must obtain the adjuster insurance license.
- Appointments License: An appointments licenses allows an insurance agent or an insurance broker to sell a specific company’s policies.
What Sort of Specialized Licensing Requirements Might You Need If You Wish to Go into A Specialized Insurance Field?
There are other licensing requirements for insurance agents who wish to specialize in a specific insurance field. Some of the specialized licensing requirements include:
- Surplus-Line Producer License: The surplus-line producer license is provided to insurance agents who don’t accept the risk of a given specialty. The permit, therefore, enables the insurance agents to procure policies that allow for more risks.
- Personal Lines Insurance License: A personal lines insurance license allows the license holders to sell personal insurance holders. Some of the likely policies that you might sell include umbrella insurance coverage, automobile insurance, and personal watercraft coverage. The licenses allow you to sell an excess liability policy to clients who want to increase their coverage limits.
- Life-Only Insurance License: Holders of life-only insurance licenses can sell insurance policies related to an individual’s life. The insurance policies sold include life insurance, accidental death, dismemberment coverage, and disability insurance coverage.
- Part-Time Fraternal License: The license holder typically sells insurance policies of a fraternal benefit association either on a full-time or part-time basis.
- Accidental and Health License: The accidental and health license holders entitle insurance agents to transact insurance policies covering bodily injury, sickness, or accidental death. In some cases, the license might allow you to sell policies related to disability coverage.
- Credit Insurance Agent License: The credit insurance agent license allows an insurance agent to sell credit insurance. You do not necessarily need to become a licensed life agent or property and casualty broker-agent with this type of license. The state department of insurance regulates this license. Those seeking to gain their practicing licensure must file applications with their respective states.
What Else Should You Know About Insurance Agent Licensing Requirements?
Before applying for a license, it is vital to know the state requirements. For instance, you need to be aware of the educational requirements, the examination requirements, and the documents that an individual must submit before gaining licensure. You need to be mindful of the expiry period and the renewal processes for a temporary license. It would be best to determine whether a given license is subject to state or federal regulation.
What to Expect During an Insurance License Exam
Insurance agents have to meet strict licensing requirements. The insurance industry is a fast-changing industry that significantly impacts the safety and finances of insurance consumers. To ensure policy consumers get value for their money, federal and state insurance administrators have put in place stringent testing and licensing requirements. The licensing requirements ensure that everyone who sells insurance policies or acts as an independent insurance agent knows insurance policies and has met the ethical standards required to do the sales agent’s job. This led to the introduction of licensing exams.
If you aspire to become an insurance agent, you will have to complete your classwork and prepare and pass your insurance agent’s licensing exam. The licensing exams are administered either at the state or federal level, depending on the type of license you seek. The exams ensure that insurance agents have the current knowledge on insurance and risk management needed to help clients make the right decisions when buying insurance policies. You might probably be wondering whether it is mandatory to take the exam. Let’s explore the insurance licensing examination in detail to determine the importance of the exams and what it covers.
What Is an Insurance License Exam?
To sell insurance policies, act as an insurance advisor or adjuster, you will need to obtain a state license. To get the license, you must undertake and pass an insurance exam covering the insurance specialty you will be concentrating on. An insurance license exam tests your knowledge of various aspects of insurance. It determines whether you possess current knowledge of insurance. Although the license insurance exam differs considerably depending on the type of insurance one is pursuing, the exam tests several common areas.
Each state has its exam provider. The primary responsibility of the exam provider is to make exam preparation materials, study guides, and help aspiring licensed insurance agents take their licensing exams. To take the license exams, you must be at least 18 years of age when making your application and have completed a 200-hour classroom course. Additionally, you must have at least six months of insurance experience.
There are always licensing and testing fees to take the exam. Ensure you pay on time to avoid penalties. There are two different exams: the property and casualty insurance exam and the life and health insurance exam. You might choose to sit for an exam of your choice, depending on your career goals and objectives. It takes a lot of effort to pass the licensing exams. Ensure you have preparation materials that are relevant to the exams.
What Does an Average License Exam Look Like?
The insurance agent licensing exams consist of multiple-choice questions. Generally, the questions cover everything from foundational knowledge common to all insurance agents to topics and concepts specific to your insurance specialty. Hence, while preparing for the licensing exams, you should ensure you cover all the topics covered and relevant to your exam. The exam also covers both scored and unscored questions.
The scored questions are covered in your pre-licensing course. Unscored questions aren’t covered. Hence, the uncovered questions do not count towards your overall score. For specialized licenses, the exams are divided into two parts that test your knowledge on specific topics related to the insurance field.
Some of the common areas covered by the license exams include:
- Insurance Basics: These are usually the general insurance information. The basic topics are covered in the initial stages of your insurance degree program. In most cases, these typically are the most straightforward questions to pass. Some of the aspects covered are insurance policies, types of insurance policies, and roles of insurance agents.
- Insurance Rules and Regulations: Here, the exams test your knowledge of the insurance rules and regulations and whether you keep up with the insurance policy changes. It might also cover the types of licenses available to insurance agents.
What Sort of Special Requirements or Details Might Be Present in an Exam, If You Are Intending on Going into A Specialized Insurance Field?
Specialized license exams such as property and casualty insurance and life and health insurance examinations cover topics specific to the specialty. For instance, a property and casualty insurance examination is divided into two parts, each covering an insurance area. The first section of the examination typically covers property insurance and tests an individual’s knowledge on:
- General insurance information
- Insurance rules and regulations
- Basic knowledge of property insurance
- Insurance for business owners
- Flood insurance
- Earthquake insurance
- Commercial package policies
The second section of the property and casualty insurance exams tests your knowledge of casualty insurance. Some of the likely topics that you need to cover while preparing for the examination include:
- General knowledge of insurance
- Car insurance
- Insurance for business owners
- Other related types of insurance
Life and health insurance agents must pass the life and health insurance examination to be licensed. The life and health examination is mainly computer-based and includes 150 multiple-choice questions. The exam takes approximately two and a half hours to complete. The results are generally available immediately after one finishes the exams. You need to score at least 70% to pass the examination. Just like other specialized exams, the exam is divided into two. The first section covers life insurance topics such as:
- Life insurance policies
- Tax issues related to life insurance
- Annuities and qualified life insurance plans
- Annuity policies
The second section covers health insurance topics such as:
- Medical plans
- Individual and group policies
- Dental plans
- Health maintenance organization
- Tax issues related to health insurance
Where to Find a Job as an Insurance Agent
Pursuing a career as an insurance agent unlocks several job opportunities in different work settings. Although most insurance agents work within offices trying to meet the needs of their clients, others might spend the better part of the day doing fieldwork, either meeting existing clients or rooting for new ones. Some of the typical responsibilities of insurance agents include providing financial advice to clients, selling insurance policies, handling policy renewals, and maintaining client records. Insurance sales agents deal with one or more insurance types.
The common types of insurance include life insurance, property and casualty insurance, and health insurance. An insurance sales agent can either work for an insurance company or work independently, depending on their career goals. Are you looking for your dream job as an insurance sales agent but don’t know where to start? Well, this article got you covered. It explores the various places where you can find insurance agent jobs and make your resume appealing to potential employers.
How Do You Craft Your Resume When Applying for Insurance Agent Jobs?
As an insurance agent, your expertise plays a significant role in your success. Whether you are processing insurance claims or promoting insurance policies that drive sales, your attributes and experience can differentiate you from other candidates applying for the advertised job. A potential employer will gauge your skills and experience based on your resume. Writing a good resume can be challenging. You might want to align your resume to a specific job description. Or you might be having difficulties in deciding what aspects to include in your resume. Developing a perfect resume can take hours or even days. However, with the following tips, creating a perfect resume can be relatively easier. Here the things you need to include:
- Relevant Experience: When applying for a particular position, make sure the accolades and experience you include in your resume are relevant to the post you are applying for. Ensure you provide many details on your past job and experiences.
- Right Skills: Different employers are always looking for insurance agents that possess a specific skill set. Be sure to list the right skills relevant to the type of insurance position you are applying for. For instance, a life insurance agent might have a different skill set to property and casualty insurance agents.
- Achievements: Your achievements relevant to the job position could have more significance than having high college GPAs. You should indicate your achievements and awards during your previous job.
- Excellent Content: Don’t make your resume boring by posting information that might not be relevant to the job position. Choose the strongest content to post in your resume, as this will help improve your marketability.
Where Can You Actually Look and Find Insurance Agent Jobs?
Insurance agents hold slightly over 500,000 jobs across the country. These job opportunities spread across various work settings. The largest insurance sales agent employers include:
- Insurance Agencies and Brokerages: According to the Bureau of Labor Statistics, insurance agencies and brokerage firms employ over 60% of insurance sales agents in the country. The companies have job opportunities with the highest paying potential.
- Self-Employed Workers: Close to 12% of insurance agents are self-employed. They provide insurance services directly to the clients and earn commissions based on the sold policies. They are answerable to their client and not insurance companies.
Other places where you might find jobs as an insurance sales agent include:
- Direct health and medical insurance carriers
- Direct insurance carriers
In What States Are Insurance Agents in Demand?
The demand for insurance agents varies from one state to another. In contrast, others could demand more insurance services, others report low demands. The growing demand for insurance agents is attributable to the emergence of more industries and technology-driven innovations. Are you looking forward to a career as an insurance agent? Here is a list of the states that have demand for insurance agents:
- Rhode Island
- New Jersey
- New Hampshire
- New York
Notably, you are likely to earn higher salaries when you land an insurance sales job in any of the states mentioned above.
Insurance sales agents are some insurance professionals with promising and highly flexible careers within the insurance industry. Insurance agents sell one or more types of insurance to potential clients. They provide insurance advice to clients by explaining the different types of insurance policies and help clients buy insurance plans that suit their needs and financial capabilities. They also handle policy renewals and help clients plan for their retirement. There are various types of insurance that a sales agent might sell, including property and casualty insurance, life insurance, health insurance, among others.
Becoming an insurance agent is relatively straightforward. All you need is to pursue an associate’s degree or bachelor’s degree in finance, economics, or business and major in insurance or risk management. After earning your degree, you need to gain at least one year of job experience. The job experience is a requirement for those seeking various state licenses. To obtain a license in a different insurance field, you need to undertake and pass the licensing exam related to your insurance specialization. Insurance agents earn a median annual wage of $50 940. Their salary mainly depends on job location and type of employer.