How To Become A Licensed Insurance Agent In Texas – A licensed insurance agent is a trained professional responsible for selling insurance policies to customers. Insurance policies may focus on death, retirement, injury, travel, or potential health problems for the insured. To help customers obtain insurance, the insurance seller regularly analyzes the health, occupational, and other risks to which the person is exposed, makes a quote based on the findings, and advises the customer on what insurance is best for them. They also assist clients with insurance claims.
Are you thinking about becoming a licensed insurance agent? The best way to become a licensed insurance agent is through CVs of current licensed insurance agents. The following guide describes the general education, experience and skills needed to become a licensed insurance agent:
How To Become A Licensed Insurance Agent In Texas
50.0% of licensed insurance agents have a bachelor’s degree. Additionally, 5.2% earned a master’s degree before becoming a licensed insurance agent. While most licensed insurance agents have college degrees, you can become an agent with just a high school diploma. In fact, one in six licensed insurance agents did not attend college.
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Licensed insurance agents typically earn a degree in business or psychology after graduation. Less common degrees for licensed insurance agents include insurance degrees or accounting degrees. How to Become an Insurance Agent describes the logistical steps you need to take to start a career in insurance sales. This is a step-by-step guide to required tests, licenses, certificates and forms.
After reading this dry but very helpful article, please read Next: Selling Insurance – How to Get Started. This article goes into more detail on how to start selling insurance. It will help you create a solid foundation for a sales career.
Then visit our Brokers University for more useful articles to take your career to the next level.
When you start your adventure with insurance, it’s worth focusing on selling in a specific area. It is not possible to sell all types of insurance to all individuals and/or companies. There are simply too many different parts for each type of insurance. In addition, there are far too many licenses to maintain, carriers to contract and certificates to complete for all the different products.
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Once you get the product, you can safely distribute it. However, focusing on a niche is the best way to make the most of your limited time and resources.
Once you have an idea of what you want to sell, you must choose between being a slave or independent.
An in-house agent works for an insurance company and sells only its products. This company trains agents in the field of insurance product package. The insurance company (or carrier) often pays the in-house agent a base salary. In addition, they usually get a commission on their base salary. These commissions can be paid periodically or once, depending on the contract.
An independent insurance agent is a self-employed entrepreneur who can represent many different insurance companies. However, even if they are independent, they are often linked to an “upline”, an agency or brokerage house and/or an insurance marketing organization (IMO).
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These agencies, upline and IMO are likely to provide support and training to independent agents. In return, they get a “headline” on what their contract agents sell. This means that they are also paid by insurers when their agents make sales. They can also help with compliance and will usually contract carriers for agents. However, they usually do not offer wages, expenses or benefits such as health insurance or retirement savings.
Insurance companies pay directly to independent insurance agents. As an independent agent, you will receive monthly commission and payment statements. Then, at the end of the year, you’ll receive a 1099 tax form from each insurer you sold that year. You are then responsible for paying self-employment tax to the government every quarter.
In summary, being an independent agent usually means more money and freedom, but at the expense of a base salary and benefits.
Once you have decided what type of agent you want to be and what line of insurance you want to sell, you must be licensed in every state where you want to sell insurance.
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Each state has different fees, forms and requirements for selling insurance. However, the test should only be performed in the basic state. You pay for a basic state license for each line or insurance you sell. Then, if you want to sell in other states, you get an out-of-state license, called a non-resident license. You must do this in each individual state in which you wish to sell. Typically, these non-resident licenses have annual fees of around $50 (some higher, some lower).
Where to start? If you are looking for information on obtaining an insurance license in your home state and/or additional non-resident state, start with the National Registry of Insurance Manufacturers. (NIPR is an online licensing tool. States use it to streamline the licensing process and make it available online. They charge you to use the service, but it’s worth doing it all online, and in most cases you may not have a choice Still available at the moment there is mail and options if you prefer to write a check.)
On the next page, you’ll see (below the large field with the “Apply Now” button) expandable information on fees, eligibility, and rules and requirements.
Using my state of Nebraska as an example, under “Lines of Authority” expandable “+”, I see that the standard manufacturer license is $50 for the first time. I can also see which manufacturer licenses require exams (and which require a fee). For Nebraska:
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If you are over 18, you can pass a state background check, pay the licensing fee and pass the licensing test, which means you can usually apply for an insurance manufacturer’s license (known as an agent’s licence).
Please note, before you can apply for a license, you must first pass the licensing test! Who doesn’t like tests? Ok, not many people, but you have to take one (or more). Moreover, they are not that bad, but you have to study to pass them.
The applicant must pass a written examination to determine eligibility to act as a licensed manufacturer for the lines of insurance (LOA) applied for. https://nipr.com Find state testing information
The NIPR state information page will have a link button at the bottom of the page to your state’s manufacturer licensing website. (You can also search for it on Google or your favorite search engine.) Each state uses different examiners. So you need to double check their website for how to sign up for the test in your state.
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For example, my state has one “proctor” for the state licensing exam. There is a link on the state website to the website of that controlling entity. There you can sign up for an exam, view an outline of exam content, watch a mock exam, and find information about test fees, scheduling rules, scoring information, and FAQs.
There are study resources for insurance licensing exams and I recommend you take advantage of them. Many include reading guides, videos, audios, and practical quizzes and tests to help you. Personally, I learn best by taking practical quizzes and resolving test questions multiple times. Good exam preparation companies design their questions to be very similar to real questions. They base their research questions on past test questions from current tests.
Currently, most test preparation is done online. (Especially as I write this now in the times of Covid). I prefer online test preparation because you can take it at your own pace (i.e. super fast!) and complete the practice questions as much as you like.
However, at some point I also took a personal test preparation course and enjoyed it too. If you have a good teacher, you can also gain valuable industry insights as well as test relevant information.
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Typically, each state will have license retention and compliance requirements. These can be found on the state information page. (Just select “Renewal” instead of “First Time License” in the Status Information page drop-down list.) Normally, you have to pay a license renewal fee. (Often it’s around $50.)
In addition to paying the fee, you must also complete and report competitive continuing education (CE) credits. Each state has a set number of continuing education hours that must be completed every two years. You need to find an external CE supplier. You pay them for the classes. Then take classes and finally report your results to your state’s licensing board.
Make sure you know when your license renewal deadline is and start the process as early as your state allows to ensure you stay compliant and on time.
You can do it
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