If you’re considering a new career opportunity, independent insurance agents aren’t going away anytime soon. With an unlimited earning potential, the ability to set your own goals, create lasting relationships, and work flexible hours it’s no surprise that so many people are drawn to this profession.
Whether you want to change careers or are a young professional looking to start fresh, here’s everything you need to know to get started.
1. Understand the Role of an Independent Insurance Agent
The first step in becoming an independent insurance agent is understanding what an independent insurance agent is. First let’s break down the two primary types of insurance agents—independent and captive:
Independent insurance agents represent and sell product offerings from multiple insurance carriers. In order to sell different insurer policies, they must apply and get appointed. Doing so gives these agents extra flexibility, and access to more insurance plan options.
On the other hand, captive insurance agents work for and sell the products of only one insurance company. While captive agents oftentimes benefit from having access to a higher advertising budget and established client list, their product offerings are limited, and they often have strict sales quotas.
2. Meet Licensing Requirements
Next, you’ll need to get licensed. In the United States, insurance agents must be licensed in the state in which they wish to sell insurance. While the requirements vary slightly from state to state, in most cases the process looks like this:
Step 1: Choose the Type(s) of Insurance You Want to Sell
Insurance licenses are issued for specific types of policies that you want to sell. Here the most common types of licenses:
- Property and Casualty (P&C) Insurance License: Allows you to sell commercial insurance policies, homeowners insurance, renters insurance, flood insurance and more.
- Life and Health (L&H) Insurance LIcense: Required to sell health insurance, life insurance, Medicare plans and annuities.
- Personal Lines Insurance License: Similarly to a P&C license, it allows you to sell homeowners and auto coverage, but does not include commercial insurance.
- Variable Products License: Necessary to sell variable life insurance products and variable annuities (may require additional securities licensing).
When choosing the product you want to sell, it’s important to consider your own interests, along with market demand and commission potential. Keeping this in mind, most independent agents starting out choose to obtain their L&H or P&C license first.
Step 2: Complete Pre-Licensing Requirements
A specified number of pre-licensing educational hours are generally required in most states before you’re allowed to take the licensing exam. Taking these courses are key to passing your licensing exam as they go over key information such as basic insurance concepts, policy types, laws and regulations, and more. These courses are offered in a variety of formats such as online courses, in-person classes, and live-streamed classes. To learn more about your state’s specific requirements, be sure to visit your state’s department of insurance website.
Step 3: Take and Pass the State Licensing Exam
After completing your prerequisite educational courses, you’ll need to register and pass your state’s licensing exam. Individual states are usually licensed with third-party testing associates, and are typically held at testing centers such as community colleges. Here are some more things to keep in mind about state licensing exams:
- Require you to schedule your exam ahead of time and pay a fee (usually around $40-$150).
- In multiple choice format and cover topics such as ethical guidelines, insurance regulations, and policy details.
- Graded as either pass or fail and results are typically available immediately following completion. Most states require a 70% or higher to pass.
Step 4: Complete a Background Check
Some states require applicants to submit a criminal background check and fingerprinting before issuing their license. If you are required to provide fingerprints, you’ll need to schedule an appointment ahead of time. Background checks also tend to come with processing fees, and you must wait for the results before moving on to the next step.
Some states with stricter regulations, may deny individuals with certain felony convictions. With that said, we always recommend being upfront about your background if you have any criminal history. Additionally be sure to check your state’s specific rules regarding criminal records and licensing.
Step 5: Submit Your Application
After passing your exam and background check you’ll need to submit your official licensing application. This is usually done either through the National Insurance Producer Registry (NIPR) or directly through your state’s Department of Insurance site. Application fees range from $50 to $300 and approval can take anywhere from a couple days to over a month.
Step 6: Receive Your Insurance Licence and Maintain Compliance
Once approved, you’ll receive an official insurance license number, also called a National Producer Number (NPN). With this on hand, you’re now legally licensed to sell insurance in your state! Congratulations!
Lastly, it’s important to maintain compliance over time by:
- Completing continuing educational requirements: Most states require 24-30 hours every 2 years.
- Renew your license: You’ll need to renew your license every 1-2 years depending on your state.
It’s also important to note that individuals wishing to sell insurance in more than one state must apply for a non-resident license. Luckily, you won’t have to take additional exams in most cases. Just apply through the National Insurance Producer Registry and you’ll be ready to sell policies in multiple states!
3. Get Appointed with Carriers
Since independent agents aren’t limited to working with one particular insurance carrier, you’ll need to apply for separate carrier appointments, in order to sell policies from each company. During this process you’ll typically need to:
- Prove that you’re a licensed insurance agent.
- Provide sales experience or a business plan.
- Sign an agent contract (this includes commission structures, product offerings, etc.).
Some agents opt to work with Independent Marketing Organizations (IMO) or Field Marketing Organizations (FMO) who oftentimes provide training, marketing tools, and carrier access.
4. Develop a Business and Marketing Plan
Since independent insurance agents are essentially entrepreneurs, you’ll want to create your own business plan and marketing approach. Keeping this in mind, consider the following: 
- Register your business: If necessary, establish your business as an LLC, S-Corp or other appropriate entity type.
- Invest in Errors & Omissions (E&O) insurance: This will protect you against costly liability claims.
- Create a marketing/lead generation strategy: Paid ads, SEO-driven traffic, social media, email and networking are all great ways to attract new customers. Additionally, many independent insurance agents invest in an accredited lead generation partner such as Benepath, to supplement their pipeline, with pre-vetted prospects who’ve expressed interest in insurance.
- Use a CRM system: Customer Relationship Management systems are essential for insurance agents, helping to keep track of leads, manage client communications, and oversee policy details.
5. Start Selling and Building a Client Base
Now with a license in hand, and carriers to work with you’re ready to start selling insurance policies!
It’s important to diversify your marketing tactics and find a niche to specialize in. Additionally, keep in mind that knowledge is everything in this industry. If your clients trust and value you, they’ll keep coming back for renewals year after year! So stay up to date on the most recent trends, policies and regulations, and focus on providing exceptional customer service. By doing all of this you’ll have no problem reaching your goals!
Succeed with Benepath!
Are you a new insurance agent looking to find more prospects? Or maybe you’re an established veteran who simply needs a little extra push. Well don’t worry—Benepath is here to help!
For over 20 years Benepath has been providing agents all across the country with top-tier insurance leads. We offer both exclusive and aged insurance leads in a variety of product verticals including: commercial insurance, individual health insurance, and group health insurance. Not only are our leads thoroughly vetted for legitimacy and intent, but they’re also delivered directly to your CRM, so you’ll be able to reach consumers when they’re ready to get down to business.
To learn more about the advantages of partnering with Benepath, simply fill out a form on the right, or call us directly at 888-684-3121.
