How to Be an Independent Insurance Broker

Get licensed in your state to work as an independent insurance broker.
Get licensed in your state to work as an independent insurance broker. (Image: Jupiterimages/Comstock/Getty Images)

As an independent insurance broker, you will assist your customers in selecting the most cost-effective coverage by comparing different policies from several insurance providers. Since independent brokers are not "captive," that is, not affiliated with one or more insurance companies, they have to be knowledgeable about the industry and aware of recent changes and trends. Unlike insurance agents who work for specific companies and are paid a salary, an independent insurance broker makes money primarily through commissions on each policy sold. Before you decide to become licensed to sell insurance, you should determine which category of insurance you want to specialize in – property and casualty, life or health. If you are licensed in one category, you will not be able to sell other policies.

Complete required coursework to complete a four-year undergraduate degree. Although not mandatory in many states, a college degree and relevant coursework better prepares a candidate by familiarizing him with the industry and its inner workings. Candidates who wish to become independent brokers will benefit with a degree as formal education helps to enhance the resume, in case the candidate approaches a brokerage firm for a position. Brokers have educational backgrounds in finance, accounting, marketing, law and/or economics.

Determine the licensing criteria for each state you want to sell insurance in. Depending on the state and the category of insurance, you may be required to complete specified training from an accredited institution before being eligible to take the licensure exam. Many states also require that candidates be at least 18 years of age, be a resident, have good credit and a clean criminal background. You may contact the state’s insurance department or the insurance commissioner’s office for specific requirements for the state.

Research institutions that offer courses required to qualify for the licensing exam. The state’s insurance department may help you select an institution that provides in-class training and covers the topics that you will be tested on. There may be several institutions that have courses tailored for the licensure exam; research cost and convenience before scheduling for classes.

Finish the coursework. Depending on the state’s regulations, you may be required to complete 90 hours or more of instruction, which typically includes a beginner’s class introducing candidates to the fundamentals of insurance, followed by intermediate classes for each category of insurance. If you want to be an independent insurance broker who deals in health policies, you will not have to take classes for other insurance categories. Upon completion of the required coursework, you will earn a certificate or diploma that qualifies you to take the licensure exam.

Take the licensing exam and apply for licensure. Along with your certificate of completion and proof of identity, you may have to present any supporting documents that are required to verify your residency, criminal history or credit report, when taking the exam. Once you satisfy all criteria for your state, and pass the licensure exam, you will be allowed to sell insurance policies as an independent broker. Schedule to take the exam as soon as your course is complete; doing so will save you time and allow you to take the exam while the study material is still fresh in your mind.

Tips & Warnings

  • Some states may require that your certificate of completion of the necessary courses be no more than two years old. Contact the licensing authority if you want to sit for the exam more than two years after completing training.

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