How to become an insurance agent

How to become an insurance agent

Jessica Gutheil
By Jessica Gutheil
Oct 19, 2023
31 min read

Editor's Note: This article shares steps for how to start a career as an insurance agent. If you're already an agent, learn more about how to get appointed with NEXT Insurance on this page.

If you enjoy working with the public and know how to sell, you may want to become an insurance agent. With low startup costs and lots of flexibility to chart your own course, the work can be gratifying.

The insurance business is also reasonably resilient against economic downturns, and startup requirements are relatively simple. According to recent Bureau of Labor Statistics (BLS) data, insurance agent employment is projected to grow 8% through 2032 and has an unemployment rate of 1.4%, significantly lower than the national unemployment rate of 3.8% (August 2023).

Although some insurance agents join existing firms, we will focus on how to become an independent insurance agent, running your own small business. In this article, we'll cover everything you need to know about becoming a licensed agent, including:

What does an insurance agent do?

Insurance agents sell insurance policies. However, the job is not simply a sales position. You will work closely with each client to assess risks, find insurance coverage and build relationships that can last a lifetime.

Types of insurance agents

There are two basic types of insurance agents:

Captive agents 

Captive agents work with a single insurance provider, usually a large national company. Because you work for an established company, you’ll receive guidance, support and training on the company’s products. And because you’re on the company’s payroll, you’ll have a stable salary to rely on more than an independent agent.

However, you are not allowed to sell competitors' products and may be required to sign a non-compete agreement. You'll also have to meet sales quotas, which can be difficult and stressful. You may only receive commissions at many companies if you make a certain number of sales.

Independent agents

Independent agents work with multiple insurance providers. You will give your clients quotes from different insurers to help them find the right company and policy to meet their needs. 

Independent agents have more flexibility but often receive little training or support from insurance companies. This can make it more challenging to get started. Still, you will have more flexibility in choosing the best options for your clients because you'll have a more diverse product line to choose from.

Another significant advantage is income potential. According to the BLS, the median pay for insurance agents was $57,860 in 2022. But Glassdoor reports the estimated total pay in 2023 for an independent agent in the U.S. is $143,696 per year, with an average salary of $100,333 per year. Of course, this varies depending on your location, sales skills, work ethic, etc.

What kind of insurance should you sell?

Independent agents usually choose to sell commercial or personal insurance. You might specialize in one or more types of insurance, including health, life or business — sometimes called property-casualty insurance.

According to Independent Insurance Agents & Brokers of America (IIABA or the Big “I”), independent agents covered approximately 62% of all property-casualty premium written in the U.S. They placed almost 88% of all commercial lines and 37% of all personal lines premium. 

Graph showing the percentage breakdown of independent agent property-casualty lines. (What P-C lines independent agents sell the most.)

Source: Big “I" 2022 Market Share Report

Commercial insurance agents focus on providing coverage to businesses. Typical policies include general liability, workers’ compensation, professional liability, commercial property, umbrella insurance, tools & equipment and more.

Personal insurance agents focus on lines for individuals or families. These might include homeowners, healthcare, personal auto and life insurance.

What are the requirements to become an insurance agent?

You need to fulfill a few requirements before you can become an insurance agent and start selling. One of the first steps is to become a licensed agent.

While insurance licensing requirements differ in every state, most places require you to:

  • Be 18 years old
  • Complete a pre-licensing education course or program
  • Pass an insurance licensing exam
  • Pass a background check

It’s worth noting that a college degree isn’t often required to get a license.

Depending on what kind of insurance you want to sell, you may need to get multiple licenses. 

Why do you need an insurance license?

Every state in the U.S. mandates an insurance license if you want to sell insurance. Plus, you must have the proper license for the type of insurance you want to advertise and sell.

For example, if you want to sell life insurance, you must obtain a license for that specifically. If you want to sell business insurance, you'll have to get another license for that, too.

Individuals operating without a license could face stiff penalties and legal action, including jail time.

How long does it take to become an insurance agent?

Becoming an insurance agent might take less time than you think. Depending on your state and the insurance products you will sell, you may need up to 40 hours of training. Online courses are widely available, so you could have some flexibility with when and where you complete your training. 

You can then take the relevant exam, submit to a background check if required and set up your new business.

Check your state's licensing department or the companies you want to work with for more information.

Many states use the National Association of Insurance Commissioners’ (NAIC) State Based Systems for insurance licensing and other regulatory purposes. Check your state’s requirements for more licensing details.

Quick guide: Insurance agent licensing by state*

State Pre-exam training hours required? Fingerprinting required? Jurisdiction
Alabama 20 hours each: life; health’ property; casualty; personal lines
40 hours each: combined course on life & health; combined course on property & casualty
Yes Alabama Department of Insurance
Alaska None Yes Alaska, Division of Insurance
Arizona None Yes, if you are a first-time licensee; relocating from another state; or a resident of another state that does not issue the type of license you want to have in Arizona. Arizona Department of Insurance
Arkansas 20 hours each: life; health; property; casualty; personal lines No, but you need to complete an online criminal background check. Arkansas Insurance Department
California 12 hours: ethics training
20 hours each: life; health; property; casualty; personal lines
40 hours each: combined course on life & health; combined course on property & casualty
Yes California Department of Insurance
Colorado 50 hours each: life; health; property; casualty; property & casualty; personal lines No Colorado, Division of Insurance
Connecticut 20 hours each: life; health; property; casualty; personal lines
40 hours each: combined course on life & health; combined course on property & casualty
No Connecticut Insurance Department
Delaware None No, but applicants must request a personal State and FBI criminal history report from the DE State Police. Delaware Department of Insurance
District of Columbia None Yes for first-time licensee. District of Columbia Department of Insurance, Securities and Banking (DISB)
Florida 30 hours: life
40 hours: health
60 hours each: life & health; personal lines
200 hours: general lines (property & casualty)
Yes for most licenses. Florida, Division of Insurance Agent and Agency Services
Georgia 8 hours each: variable products
20 hours each: life; accident & sickness; property; casualty; personal lines
Yes Georgia, Office of Insurance and Safety Fire Commissioner
Hawaii None Yes Hawaii Department of Commerce and Consumer Affairs
Idaho None Yes Idaho Department of Insurance
Illinois 20 hours* each: life; health; property; casualty; personal lines

*7.5 of the 20 hours must be completed in a classroom setting.
No Illinois Insurance Licensing State Requirements
Indiana 10 hours: title
20 hours each: life; health; personal lines property and casualty
40 hours each: life & health; personal & commercial property and casualty
No Indiana Department of Insurance
Iowa None No Iowa Insurance Division
Kansas None Yes Kansas Insurance Department
Kentucky 20 hours each: life; health; property; casualty; personal lines No, but applicants must request a criminal background check from the Administrative Office of the Courts (AOC) Kentucky Department of Insurance
Louisiana None Yes Louisiana Department of Insurance
Maine None No Maine Department of Professional and Financial Regulation
Maryland 20 hours each: life; health; property; casualty; personal lines No Maryland Insurance Administration
Massachusetts None No Massachusetts, Division of Insurance (DOI)
Michigan 20 hours each: life; health; property; casualty; personal lines
40 hours each: life & health; property & casualty
No Michigan Department of Insurance and Financial Services
Minnesota 20 hours each: life; health; property; casualty; personal lines Yes Minnesota Department of Commerce
Mississippi 20 hours each: life; health; property; casualty; personal lines
40 hours each: life & health; property & casualty
No Mississippi Insurance Department
Missouri None No Missouri Department of Insurance
Montana None Yes Montana Department of Insurance
Nebraska None No Nebraska Department of Insurance
Nevada None Yes Nevada Department of Business and Industry
New Hampshire None No New Hampshire Insurance Department
New Jersey 20 hours each: life; health; property; casualty; personal lines (property and casualty); title
40 hours each: combined life & health; combined property & casualty
Yes New Jersey Department of Banking & Insurance
New Mexico None Yes New Mexico Office of the Superintendent of Insurance
New York 20 hours each: life; health
40 hours: life & health; personal lines
90 hours: property & casualty
Yes New York State Department of Financial Services
North Carolina 20 hours each: life; health; property; casualty; personal lines Yes North Carolina Department of Insurance
North Dakota None Yes North Dakota Insurance Department
Ohio 20 hours each: life; health; property; casualty; personal lines Yes Ohio Department of Insurance
Oklahoma None No Oklahoma Insurance Department
Oregon 20 hours each: life; health; property; casualty; personal lines Yes Oregon Department of Consumer & Business Services
Pennsylvania 24 hours each: life; health; life & health; property; casualty; property & casualty; personal lines Yes Pennsylvania Insurance Department
Rhode Island None No Rhode Island Department of Business Regulation
South Carolina None Yes South Carolina Department of Insurance (SCDOI)
South Dakota None No South Dakota Division of Insurance
Tennessee None Yes Tennessee Department of Commerce and Insurance
Texas None Yes Texas Department of Insurance
Utah None Yes Utah Insurance Department
Vermont None No Vermont Department of Financial Regulation
Virginia None Yes Virginia Bureau of Insurance
Washington None (effective July 23, 2023) Yes Washington State Office of the Insurance Commissioner
West Virginia 20 hours each: life; health; personal lines
40 hours each: life & health; property & casualty
Yes State of West Virginia Offices of the Insurance Commissioner
Wisconsin 12 hours each: life; health; property; casualty; personal lines.
8 hours: principles of insurance, WS insurance laws and ethics. (Once this 8 hours is completed, it does not need to be repeated for each line within a 12-month period.)
Yes Wisconsin Office of the Insurance Commissioner
Wyoming None Yes Wyoming Insurance Department

How hard is the insurance license exam?

The exam and the test process aren't too difficult, especially if you've completed the pre-exam requirements. Like most exams, the difficulty level depends on how prepared you are.

You may need to show proof that you’ve completed the pre-licensing course, so remember to take any necessary documentation.

The exam is usually held at a testing site and on a computer. Questions are usually in multiple-choice format and will test you on insurance terminology, practical scenarios and numbers.

You will get your test results soon after taking the exam — often within a few minutes. If you pass, you'll get instructions on applying for a license with the state. You can reschedule the exam if you don't pass on your first try.

Setting up your insurance business

Congratulations! Now that you’ve passed the exam and are a fully licensed agent, the next step is to get your business up and running.

Choose a business structure

Once licensed, you must set up your insurance company, which requires choosing a business structure. It’s a good idea to consult with a tax professional or a business attorney because your choice will have long-lasting impacts on your company. 

The three most common structures for insurance agent businesses are:

Sole proprietorship

A sole proprietorship is the simplest structure for an insurance agent who will not have partners. You can file taxes under your social security number or file for an EIN (employer identification number). You can file business deductions, profits and losses and your business taxes with your personal tax return. However, if your business is sued, you may be personally liable.


An LLC (limited liability company) may be the right choice for independent agents who want to limit personal liability or form a partnership with another agent. There is little paperwork, and your business profits and losses simply “pass-through” to the owners’ personal tax returns. An LLC can protect you against personal liability if the company is sued.

S corporation

S Corporations pay their employees a salary and deduct payroll taxes. Any excess profits can be distributed to the owners as dividends, with a lower tax rate than income. This can be advantageous in some cases. LLCs can elect to become S corporations through the IRS, though you will have additional paperwork requirements each year. Ask your tax professional if this election makes sense for your business.

There are additional state-specific guidelines for small businesses and IRS requirements. The IRS checklist for starting a business is a valuable resource to ensure you get everything. Also, consider working with a startup attorney to file your documents correctly.

Get appointed by an insurance company

Before you can sell a company’s products, you need to become appointed by the insurance company. This process typically involves applying for appointment with each carrier you want to sell products for.

However, when you're starting out, getting carrier appointments — especially at larger insurance companies — can be difficult since you don't have a proven track record yet.

Some tips to help you:

  • Start small. Try working with smaller insurance companies or carriers with a track record of working with new agencies. For instance, NEXT makes it easier to get appointed because we don’t have any production requirements to get started.
  • Create a business plan. Sharing your business plan shows carriers you’ve thought things through and have a strategy compensating for lack of experience.
  • Develop an online presence. Having a digital presence helps clients find you before they know you exist. It also helps them learn about your product knowledge and reputation before they choose to buy.

Hi, come work with us: NEXT Insurance allows appointed agents to quote and bind online for 1,300+ professions. We offer instant online quotes for all policies with no underwriting delays. Plus, we issue same-day logins for more sole proprietors and independent agents. Learn more and join us as an appointed agent

How to find clients for your insurance business

First, you need to figure out your ideal customers: families, corporations, small businesses or a combination of these groups.

Once you decide on a target audience, think about their daily habits. Does that person spend much time on social media? Is she a member of any local clubs or organizations? The better you understand your ideal clients, the easier to determine how best to market to them. 

Remember that the insurance business is largely sales and that you may get a "no" five times before you get a "yes," so you'll need to follow up more than once. 

It’s helpful to network in your community. Make sure you’re promoting yourself at the places where people who may need your insurance services are. Whenever possible, get prospects to fill out a contact form so you can follow up.

Fliers, business cards, events and TV ads are also great ways to reach prospective clients not already in your network.

Avoid risks and protect your own business

It can be easy to get so caught up in becoming an insurance agent that you don’t consider your own business insurance needs. 

NEXT offers tailored coverage for insurance agents. One of the most vital types of coverage is errors and omissions insurance. Also known as professional liability, this insurance covers business mistakes, missed deadlines and accusations of professional negligence. 

We also offer general liability, commercial property, professional liability, commercial umbrella and workers’ compensation if you would like financial protection for workplace accidents if you or an employee are injured. 

How NEXT helps insurance agents

At NEXT Insurance, we make small business insurance easier than ever with fast coverage, flexibility, competitive rates and instant certificates of insurance. Our 100% online services are backed by top-quality customer support, and we’re rated “A- Excellent” by AM Best, the industry standard for rating insurance companies.

Get appointed today.

*This information has been provided as a service. It is correct and up-to-date to the best of our knowledge; however, it is in no way intended to offer legal advice and you must always consult with local authorities before you make any business decisions. Regulations and requirements may change at any time.

How to become an insurance agent


jessica gutheil 150x150
About the author
Jessica Gutheil leads the NEXT Agent Marketing team. Over the past 7 years, she has dedicated her career to helping independent insurance agents thrive. Jessica has extensive experience with insurance agency operations, digital marketing, and insurance sales as a licensed property and casualty agent.
Difference Between Insurance Agent and Broker - How to Buy Business Insurance?

Difference Between Insurance Agent and Broker - How to Buy Business Insurance?

Why businesses need more than one business insurance policy

Why businesses need more than one business insurance policy

Understanding insurance terms: Bonded and insured

Understanding insurance terms: Bonded and insured

What we cover
Chat with Us

Mon – Fri | 8 a.m. – 5 p.m. CT

© 2024 Next Insurance, Inc. 975 California Ave, Palo Alto, CA 94304, United States
Better Business Bureau
Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.

Any starting prices or premiums represented before an actual customer quote are not guaranteed and are representations of existing premiums of active policies as of December 6, 2023. To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.