If you’re interested in a career as an insurance agent, or more specifically, a life insurance agent, then the first thing you need to do is get your life insurance license.
The life insurance license is usually closely related to the health insurance license (most people choose to obtain both), which is why we have created this guide as a combined health insurance license article. life and health.
The life and health license is one of the two basic insurance licenses (along with the property and casualty license).
This guide will answer your questions about what an l&h license is, what products you can sell, other licenses you may need, and much more.
what is a life and health license?
Getting your life and health insurance license is your first step in selling life and/or health insurance in your respective state as an insurance agent.
Licensing is granted after successful passing of your specific state’s exam and allows the recipient to apply for and create a book of business for health and life insurance within that state.
This means you can work on behalf of an insurance agency, selling only their brand of products, or as an independent broker with access to multiple brands of products.
It may be recommended that an agency’s support staff, such as customer service representatives or appraisers, also obtain their licenses, as they will be handling much of the administrative management of these policies.
life insurance license
Obtaining your life insurance license sets you apart as an insurance producer qualified to sell life insurance products within your state. having your life insurance license gives you the ability to explain, sell and underwrite this line of business.
medical insurance license
The health insurance license will allow you to underwrite health insurance products offered within your state. With a health insurance license, you are recognized as qualified to explain, sell, and underwrite health insurance products.
Do I have to get both licenses?
You can obtain your health insurance license independently of your life insurance license and vice versa. most new agents choose to get them at the same time based on their opportunity to write both lines of business for the same client.
States may also bundle health and life lines into a single pre-licensing course and exam. it is recommended to check with your state details to confirm what insuring each license allows you to sell.
how do i get my health and life insurance license?
Each state has different qualifications for successfully obtaining insurance licenses, but the most common first stage is preparing for the state exam.
For example, to begin the process in Michigan, you must apply for a license with the National Registry of Insurance Producers. this can be online or in person and costs $15 for each type of business you plan to sell. the application has a duration of six (6) months.
During this time, prospective agents will enroll in specific education courses, tailored to the content expected on the exam. each pre-licensing course will be worth a fixed number of credit hours. In Michigan, completion of the Life, Accident and Health courses requires forty (40) hours and is awarded a certificate necessary to take the exam.
Thereafter, prospective life and health insurance agents in Michigan can attempt the exam for a fee of $40 per attempt.
how to prepare for the health and life insurance exam
Understanding that the insurance exam is a multiple-choice proctored exam can inform your study habits. The proctored nature of this exam means that a person is present while you take the test, either in person or monitoring via a computer. this ensures that no additional aids are used for the duration of the exam.
Most familiar study habits will help you prepare for a multiple-choice test like the life insurance test. allow the amount of time you know he needs to fully understand the material. recognizing the correct answer against other information requires a certain level of familiarity with the content.
It is also helpful to understand your testing provider before the exam. These are often third-party companies licensed by your state’s insurance commissioner to administer the test.
Last but not least, familiarize yourself with the contours of your state. Some states update frequently, annually or less, so it’s important to know exactly what information your state has provided on your exam.
Is the life and health insurance license exam difficult?
The average pass rate for the life and health insurance exam is around 50% for first-time exam takers. Improving your chances of success will mean budgeting the time you know you need to study and retain the material.
Knowing the best way to learn and take the exams, having the best tools and courses available, and budgeting your study time wisely can increase your chances of passing the exam.
The most successful participants are those who feel like they were reviewing the information, rather than seeing it for the first time and improvising.
what’s on the life and health insurance exam?
The content of your exam depends on your specific state regulations and the product line you wish to sell. exam content outlines are available by state, and while there will be some variation, there is a shared basic structure.
You are asked to understand the concept of insurance, how it may vary or be customized with policy riders or tax considerations, and how it is fulfilled for the insured.
For this example, we’re looking at a summary of life and health insurance exam content.
There are typically two sections of the exam: general knowledge and state-specific:
In general knowledge, you are also expected to understand the types of riders, provisions, options, and policy exclusions that can modify a policy. In this section, you will also need to show that you understand the application and underwriting practices necessary to deliver the policy.
On state specific, you’ll find questions related to state statutes, rules, and regulations common to life and health insurance, including insurance definitions, licensing requirements, marketing and agent responsibilities.
The life and health insurance licensing exam has about 100-150 questions and you will need to complete the exam in about 2.5-3 hours. the number of questions and the time limit allowed often depend on your state’s exam requirements.
what can i do with a life and health insurance license?
Obtaining a life and health insurance license allows you to begin selling and holding life or health insurance policies within a specific state. qualifies you as a life insurance agent legally capable of explaining, selling and processing that line of insurance.
These two types of insurance lines protect the claimant from losses related to medical situations or death.
The terms of the life and health insurance you sell depend largely on those of the policy provider. If you work for an independent agency or broker, you have the advantage of access to multiple insurance brands.
life insurance license
Life insurance policies guarantee that the policyholder and their beneficiaries will receive a set benefit in the event of death. Life insurance policies can vary depending on the period of time covered, and with that, the premiums and amount of coverage vary.
For example, term life insurance policies typically have lower premiums and cover a specific period of time in the event of death. while whole life insurance policies cover the life of the insured, but at higher premiums. Whole life can be viewed as a long-term investment, as there is a cash component that appreciates over time, just like other types of investments.
medical insurance license
Your health insurance license will allow you to sell common types of health insurance within your state, such as hmos, ppos, hsas, etc. these are variants of different types of health insurance coverage, but share the same intent of reimbursing the claimant in the event they experience medical expenses due to injury or illness.
an hmo allows members and their beneficiaries to access a network of care providers, hospitals and specialists. A PPO offers more flexibility, as you will still cover a care provider outside of the health insurance network. hsas are savings accounts for members who typically pay higher deductibles so they can save accordingly for any medical expenses that aren’t covered.
A health insurance license may also allow you some disability lines, depending on your state.
what are the limitations of a life and health insurance license?
Your life and health insurance license authorizes you to sell life and health insurance, but does not extend to auto, home, title, or property & low lines. These other types of insurance will have their own exams and licensing requirements, as required by the state. see property and casualty insurance license.
Life insurance policies, such as variable whole life, can be linked to security-backed investment vehicles that require a Finra license to trade and sell. see finra series 6 & 63 licenses.
how do i renew my health and life insurance license?
Each state has different steps and requirements necessary to complete the renewal of a specific insurance license. most states have a renewal period of approximately two (2) years and have renewal fees ranging from $15 to $200 per line.
All states also require the completion of continuing education courses to renew your license. the average number of hours to complete is sixteen (16) – thirty (30) hours per line. these courses must be completed before your license expiration date or a penalty will be added to your renewal fee.
frequently asked questions about the life and health insurance license
how do i become a life and health insurance agent?
To become a life and health insurance agent, you must complete pre-licensing education, pass the licensing exam, and apply to become a life and health insurance agent. A bachelor’s degree is recommended, but not required to start.
check your state requirements for specific details. life insurance and health insurance may require separate licenses.
Do I have to get both health and life insurance licenses?
You can obtain your health insurance license independently of your life insurance license and vice versa. most new agents choose to add more to their portfolio by selling more insurance policies.
how much does it cost to get a life and health insurance license?
The cost to take the exam ranges from $40 to $150, depending on the state.
how difficult is the life and health insurance exam?
For first-time exam takers, the average pass rate for the life and health insurance exam is around 50%. There are pre-licensing education courses you can take to increase your chances of passing the exam. For pre-licensing education courses and preparation for study, we recommend Kaplan Education Company.
how much do life and health insurance agents make?
according to ziprecruiter, the average annual salary for a life insurance agent in the united states is $84,407 per year, which means that the payment is approximately $40.58 per hour.
The information on this page has been compiled from a multitude of sources and was last updated in July 2022.
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