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Posted 09/20/2023

How to Become an Insurance Producer

How to Become an Insurance Producer


For new and experienced professionals, the opportunity to start a career within the insurance industry is appealing. It's a career that offers flexibility and exciting clients, depending on your area of focus. Although the 
requirements for becoming an insurance agent are different by state, they can often be completed faster than other professions that need a license.

 

 

How long does it take for an insurance agent to become? It takes only a few weeks to become an insurance agent. Your licensing time will depend on how quickly you can complete an online course. After passing your background check and taking the exam, you may need to wait a few weeks before the license is issued.

These steps will help you become an agent or broker in the insurance industry.

An insurance producer is licensed to sell or negotiate life, property, and other insurance offered through an insurance company. You can work as an insurance producer for only one company or represent multiple carriers.



Producing is about finding new clients and maintaining good relationships with those you have. An insurance producer is a reliable contact person for clients who need insurance producers. Others include:

  • Calculating premiums and setting payment methods
  • Helping clients settle insurance claims by monitoring and helping them
  • All policy requirements met
  • Individualized insurance programs can be tailored to meet individual customer needs
  • Inspection of property to assess its condition and determine its insurance risk
  • Intermediary between the customer and the insurance company

How to become an insurance producer

You must hold a high school diploma, be at least 18 years old, and have a valid license to become an agent or producer of insurance. These are the next steps if you meet these requirements:

Decide the type of insurance that you wish to sell. For example, you can choose from life and health, workers' compensation, property and casualty and auto.

Find out what your state's prelicensing requirements are. For example, for each type of insurance, many states require that you complete a certain number of hours in prelicensing education.

Pass the state's insurance licensing exam.

1. Choose the type of agent you would like to work as

When starting an insurance agency, you must choose between independent and captive insurance agents.



Captive agent

Captive agents only work with one company, usually a national insurance provider. The agent receives training and support from the captive company. The agent is allowed to represent the company's products and can not sell policies to competitors.

A non-compete agreement is required for all captive insurance agents. This allows them to work with one company for a limited time. Commission rates can be lower based on the amount of marketing support the carrier provides to the agent.



Independent agent

Independent agents, also known as insurance brokers, work with more than one insurance company. Agents provide clients with quotes from several companies to help them choose the best policy and price.

Independent agents can offer more product options but receive less support and training from the insurance companies they work with. In addition, agents must build their brand in their markets, not rely on well-known insurance companies for marketing support. This can make it more challenging to become an independent agent.

2. Choose which insurance products to sell

There are many types of personal insurance policies and commercial insurance. Insurance policies that are unique focus on individuals and their families. This includes life, home, and motor vehicle insurance.

Agents in commercial insurance specialize in providing coverage for businesses. Policies include general insurancecommercial property coverage and errors or omissions coverage.

3. Examine the licensing requirements in your state

Before beginning the licensing process, you need to know what products you are selling. The state in which you reside will determine the name of your license.


These are the two most popular types of licenses:

  • Agents who intend to provide insurance services for clients with auto, home and business needs will need a property and casualty license.
  • Agents who intend to provide insurance for individuals with life events such as accidents or life insurance can obtain a life, health, and accident license.

You may need multiple licenses depending on your career path. The details of your state licensing department and the company you intend to represent will be required.

Why does an insurance agent need a license?

To discuss insurance products and complete sales, agents need to be licensed. Each state has its licensing requirements. You could be subject to penalties or even legal action without a license.

  1. Examine for your insurance license

Pre-licensing classes are required in most states. These classes can be completed online or in person. The requirements vary from a single-day class to 20-40 hours of training online, depending on where you live.

Once you have met state pre-exam requirements, you will need to schedule your official licensure exam. An outside company usually administers these exams. To take the online test, you must go to the testing site on the designated date and time. Before taking the exam, you may need proof that your training course was successfully completed.



What to expect from your insurance licensing exam

It is usually not difficult to pass the exam, especially if you have prepared and completed all pre-exam requirements. The computer will be assigned to you once you arrive on time. Multiple-choice questions are the norm for test questions. You'll know if your exam passes when it is over. You can reschedule the exam and attempt again if you fail.

  1. Send your application for licensing and background check.

After passing your state's insurance licensure exam, all licensing applications will be submitted to the state licensing department. Some states may require background checks, which could include fingerprints. After you have been officially licensed, discussing and selling insurance policies is legal.

  1. To sell products, get appointed by an insurance company.

Before you can sell their products, you must be appointed by the insurance company. Each insurance company you intend to sell products to will require you to fill out an application. This appointment and binding authority is recorded on your state insurance licence.

  1. Maintain and find clients

Now you have a license. What now? Now you'll need to start prospecting for clients. Agents often start by digging for clients and writing their insurance. This is a great way to get familiar with the system and feel comfortable quoting new coverage.

It's an excellent time to start marketing your agency. It might be worth joining the local chamber of commerce to create a website, promote your business online, and explore local advertising options. There are many options available. Most will require you to experiment until you find the best one for you.

  1. Protect your business

You'll want to ensure that your agency has commercial insurance coverage as a new agent. There are many types of insurance coverage that you should consider.


You will be covered in many situations with your general liability insurance. For example, if a client gets hurt while working in your office, one of the most common risks is bodily injury claims. A simple slip and fall on the carpet can result in injury and liability. This coverage can often be combined with commercial property insurance in an owner's policy at a reduced rate.

Omissions and errors E&O coverage: All insurance companies require E&O coverage before you can write policies. This covers your clients from any errors you or your staff make. You might accidentally remove the wrong vehicle from a procedure. This coverage is not available in an accident. Your E&O coverage will cover the client if it is your fault.

Workers’ compensation This coverage protects your agency against claims involving employees. It will pay part of the employee's lost wages and medical expenses if they are injured at work. Even if your workers are part-time, workers' comp is required in most states.




Sources: 

https://www.insureon.com/blog/how-to-become-an-insurance-agent

https://www.kaplanfinancial.com/resources/getting-started/insurance-producer