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How do you get a life and health insurance license?

To sum it up...
  • Every state in America has its own requirements that must be met before a license will be approved to sell either health or life insurance. Each respective legislative body will set its own minimum requirements and standard
  • There is a common thread to most licensing requirements, irrespective of the state that is issuing the license. These include a verifiable level of education, an acceptable score on a state-sanctioned examination, and successful background checks and clearances
  • A license is not for life. Each state will have requirements that must be met during the term of the license before an application for renewal will be granted.This usually involves a certain number of professional development hours

These are the basic requirements to get a life and health insurance license, but the process is a bit more involved than that as you can imagine. Let us now dive into some of the finer points of the process.

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Basic Requirements For Getting a License To Sell Health or Life Insurance

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The process of getting a health or life insurance license does differ by each state, meaning that applicants in one state cannot necessarily sell insurance in another. We will cover the exceptions to that in more detail in a moment.

Suffice it to say, anyone who desires to get a license for selling insurance must conform to the minimum requirements of the state in which the application is lodged.

The process one goes through to obtain a license typically begins with some the of education. These are courses that must be taken prior to an application for licensure even being completed. It is at the end of this training that most states will require an exam to be taken and a satisfactory score achieve before a license will be approved.

Currently, most of the states in America also require that any applicant for a health or life insurance undergo a center type of background check prior to the license being granted.

In some states, this might be a basic check, while others will involve a more comprehensive process. It is best to check with each state in which you want to get a license to learn more about the background checks involved.

When looking at state by state requirements, it might be helpful to compare two of them in order to see the type of differences that can occur on a case by case basis. Let us look at California and Pennsylvania.

  • California requires each applicant me a minimum of 18 years old at the time of submission.
  • There is also a requirement in California that each applicant for a health or life insurance application complete 20 hours of education in health insurance related courses prior to being approved.
  • Pennsylvania requires a minimum of 24 hours of the same type of educational courses before an application can be approved.
  • There is also a minimum passing score on a state-sponsored exam that has to be met.

It is also important to keep in mind that many states have similar licensing requirements to those of California and Pennsylvania, while others may be quite different. If a state does have a similar requirement to another, a reciprocal licensing agreement may be in place. This will allow for people that want to sell insurance in multiple states to get a license for each one much more easily.

Remember that a license is required in each state that an individual sell either life or health insurance. Not all states have reciprocal agreements. In other words, having a license in one state does not necessarily mean obtaining a license in another is a piece of cake. In some cases, more education and the passing of examination may still be required.

An Explanation of Health and Life Insurance Licensing

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The selling of health and life insurance is, quite literally, a matter of life and death. Such insurance products are designed to give financial stability and a peace of mind to the insured. Because of this, the government has placed strict regulations on the industry to protect the individuals.

Licensing is in place in order to standardize how various products and policies are presented to the public. No person without a license is legally permitted to sell insurance, so this an important point to keep in mind.

In addition, individuals who simply collect money for insurance policies are not necessarily bound by this stipulation, provided that they are not the one that actually sold the policy.

If someone desires to explain the benefits and provisions of a health or life insurance policy in an attempt to get someone to purchase it, a license is required. As mentioned, each state differs in the way that they grant these licenses and there is currently no national system for universal licensing. A license will remain in effect for the duration of its term and can be extended and renewed provided that certain requirements are met. Typically, one license will cover the following types of insurance policies that can be sold:

  • Various kinds of life insurance, typically excluding those with a financial annuity component
  • Long term care insurance
  • Nearly every kind of health insurance policy currently in effect
  • Disability Insurance

This is quite a comprehensive list, but that is exactly why each state requires a person to fulfill certain requirements before being granted a license. Once that license is granted, there are will be some additional requirements necessary in order to maintain it.

Renewing a License to Sell Health and Life Insurance

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Just because a license to sell insurance is granted does not mean that it will last indefinitely. Various standards of professionalism must be upheld. The individual with the license must abide by all policies and regulations for the industry, or the governing body can revoke the license at any time.

In order to renew a license, a minimum number of hours of professional development is required before the expiration of the term. This varies by state. The design here is to ensure that all people holding a license to sell health or life insurance are constantly updated on the latest policy rules, so they can then pass that knowledge on to the customer.

In Conclusion

Licensing requirements for health and life insurance are in place to better standardize the industry and to protect the insured. It does little good to think you have insurance only to find out that you have been sold a policy that does little to protect you. Each state issues their own licensing requirements, so check with yours before deciding to proceed.

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