How to Become an Insurance Agent in Six Steps

The insurance industry is expanding rapidly, driven by the increasing need for risk management in various sectors, including real estate, healthcare, and business. With new businesses emerging and individuals seeking financial protection, the demand for knowledgeable insurance agents continues to grow. Becoming an insurance agent is a promising career choice that offers flexibility, financial stability, and the opportunity to help individuals and businesses secure their assets. Umbrella Brokers provide an appealing package and experience for such.

Whether you are starting fresh or transitioning from another profession, here’s a comprehensive guide on how to become an insurance agent in six steps.

1. Decide what kind of insurance agent that you want to be

You have to make findings by passion and what you think would be convenient for you to do. So, you have to decide what type of agent you want to be from the two options: captive and independent.

RELATED: How an Insurance Policy Works

There are two primary categories: captive agents and independent agents.

• Captive Agents: These agents work exclusively for a single insurance company. The advantage of being a captive agent is that the company provides extensive training, marketing support, and a steady stream of potential clients. However, you may be required to sign a non-compete agreement, limiting your ability to sell policies from other providers.
• Independent Agents (Insurance Brokers): Unlike captive agents, independent agents are not tied to a single company. Instead, they work with multiple insurance providers, allowing them to offer clients a range of options tailored to their needs. While this provides greater flexibility and potentially higher commissions, independent agents are responsible for finding their leads and managing their business operations.

Choosing these paths depends on your career goals, risk tolerance, and preference for autonomy versus corporate support.

2. Pick the insurance products to sell

The insurance industry offers a variety of products, each catering to different aspects of life and business. Choosing the right type of insurance to sell depends on your interests, expertise, and the market demand in your area.

The two main categories include:

• Personal Insurance: This includes policies designed for individuals and families, such as:
  • Auto insurance
  • Homeowners’ or renters insurance
  • Life insurance
  • Health insurance
  • Disability and long-term care insurance
• Commercial Insurance: This category focuses on businesses and organizations, covering risks such as:
  • General liability insurance
  • Commercial property insurance
  • Workers’ compensation
  • Professional liability insurance (e.g., errors and omissions)
  • Cyber liability insurance

Some agents specialize in a single type of insurance, while others offer a mix of personal and commercial policies to diversify their income streams.

3. Check and fulfill your state’s eligibility

Take time to learn about the licensing requirements of the state where you intend to practice, as each state has specific licensing requirements for insurance agents. These licensing requirements typically include educational qualifications, background checks, and pre-licensing coursework.

It is better to determine the requirements before you begin your licensing process, as per your service rendition. Before moving forward, research your state’s regulations by visiting your state’s Department of Insurance website. Your career focus may also require that you have multiple licenses.

Some key eligibility requirements to consider include:

• Minimum Age: Most states require agents to be at least 18 years old.
• Residency: You must apply for a license in the state where you plan to practice.
• Pre-Licensing Education: Some states mandate a certain number of hours of coursework before taking the licensing exam.
• Criminal Background Check: A clean criminal record is often required, although minor infractions may not necessarily disqualify you.

Understanding these requirements early on will help streamline the licensing process and prevent unnecessary delays.

4. Take a licensing exam

Having read through and fulfilled your eligibility requirements, your state would most likely require that you take an exam. Many states provide pre-licensing classes, which can be online or provided material. After the class, you can proceed to schedule your insurance exam.

RELATED: Does Your Small Business Need Insurance?

Once you meet your state’s eligibility criteria, the next step is passing the licensing exam. This exam assesses your knowledge of insurance laws, ethics, and the specific types of policies you intend to sell.

Preparing for the Exam

• Enroll in a Pre-Licensing Course: Many states require candidates to complete a state-approved pre-licensing course, which can be taken online or in-person.
• Study the Exam Content: The exam typically covers topics such as insurance policies, state regulations, and legal responsibilities.
• Take Practice Tests: Simulating the actual exam with practice tests will help you become familiar with the format and improve your confidence.
• Schedule Your Exam: Most states allow candidates to register for the exam through a testing center or online platform. Be sure to check the registration details and fees.

After successfully passing the exam, you will be one step closer to becoming a licensed insurance agent.

5. Submit your licensing application for review

After you have passed the exam, you need to submit all your state’s licensing requirements for the application to the state’s licensing department. The department is expected to run background checks on you, including your biodata. This process typically includes:

• Providing Proof of Exam Completion: You will need to submit documentation showing you passed the licensing exam.
• Filling Out the Licensing Application: This application requires personal details, business information (if applicable), and any additional state-required documents.
• Undergoing a Background Check: Many states conduct background checks to verify your criminal history and financial responsibility.
• Paying Application Fees: There are licensing fees associated with your application, which vary by state.

Once your application is approved, you will receive your insurance license, allowing you to legally sell insurance in your state.

6. Start Your Career as an Insurance Agent

Congratulations! You are now a licensed insurance agent. The final step is launching your career and building your client base. Here are some key strategies to get started:

• Join an Insurance Agency or Brokerage: If you prefer a structured work environment, consider applying to established insurance agencies or brokerages. They often provide mentorship, training, and access to clients.
• Start Your Own Independent Practice: If you have an entrepreneurial mindset, you can set up your own insurance agency and work as an independent agent.
• Leverage Online Marketing: Use social media, search engine optimization (SEO), and digital advertising to attract potential clients.
• Network and Build Relationships: Attend industry events, join professional organizations, and collaborate with financial advisors, real estate agents, and other professionals who can refer clients to you.
• Continue Learning and Expanding Your Offerings: As the insurance industry evolves, staying informed about new policies, trends, and regulatory changes will help you remain competitive and provide better service to clients.

Final Thoughts

Becoming an insurance agent is a rewarding career that offers financial stability, professional growth, and the opportunity to help individuals and businesses safeguard their assets. By following these six steps—choosing your agent type, selecting the right insurance products, meeting state requirements, passing the licensing exam, submitting your application, and starting your career—you can establish yourself as a trusted insurance professional.

Whether you decide to work with a major insurance company or run your own brokerage, the key to success lies in continuous learning, excellent customer service, and strategic networking. Now that you know the process, take the first step and begin your journey in the thriving insurance industry!the question, “what can you offer us?” You can apply to small and local brokerages and your dreams can be as high as regional office centers of insurance agencies.

Article was originally published on September 7, 2019 and updated on February 28, 2025.