How Does an Insurance License Work?

Make Sure You Qualify

There is a list of items that could prevent you from becoming an insurance agent in your state. Some of them include tax evasion, back child support or a criminal record. Most states require a background check and a set of fingerprints to ensure that you tell the truth. Insurance representatives are fiduciaries for other people's money, and a clean record is important.

Decide What Insurance to Sell

There are a number of different types of insurance, and each one requires a different type of test to qualify for a license. Most people take two tests at a time for personal insurance, since the section on insurance law is often the same. They often take the health insurance and life insurance tests together. They also take the property and casualty insurance tests for homeowner's insurance and car insurance. Other types of insurance require licenses, too. Travel insurance agents and part-time fraternal agents often require a license but don't have the educational or testing requirements.

Look for Educational Requirements

Most states require that you attend a specific number of hours of school before you take the examination to become an insurance representative. The type of course you take depends on the state where you sell insurance. In some states, you don't have to take the examination or course of study if you are a certified financial planner or had a license in a previous state.

Prepare to Pay

Calculate your costs. The application for a license, the schooling and the fee to take the test requires a substantial amount of money. Be prepared to pay ahead of time. Some companies pay for the schooling and all the fees that come when you get a license. Consider applying for a job with those companies if you want to sell insurance.

Take the Test

Study for the examination and take your test. Many states give tests electronically, and you know immediately if you passed. Some states have a window of time to retake the test if you fail. Others have a period of time to wait before you can take it again. Some allow you to take it only a specific number of times before you have to wait or reapply to the schools.

Sell Only Certain Products

Apply at companies for a job that sells products your license covers once you get your insurance license. If you have only a life license license, you can't sell health insurance. Be aware that many companies that offer annuities and life insurance sell both variable and fixed products. You can sell the fixed products but need additional licenses for those that have investments on the interior.