How to Get an Insurance Agent License: Requirements, Exam & Cost
An insurance agent license is one of the fastest and most affordable professional licenses to obtain. Most people can go from zero to licensed in 2 to 4 weeks, with total costs under $500. Insurance also offers some of the highest earning potential among licensed professions.
Types of Insurance Licenses
Insurance licenses are organized by lines of authority — each covering different types of insurance products:
| Line of Authority | What You Can Sell | Pre-Licensing Hours |
|---|---|---|
| Life | Life insurance, annuities | 20 – 40 hours |
| Health | Health, disability, long-term care | 20 – 40 hours |
| Property | Homeowners, commercial property | 20 – 40 hours |
| Casualty | Auto, liability, workers’ comp | 20 – 40 hours |
| Property & Casualty (P&C) | Combined property + casualty | 40 – 60 hours |
| Life & Health (L&H) | Combined life + health | 40 – 60 hours |
Most new agents get either Property & Casualty or Life & Health (or both). Each requires a separate exam.
Step-by-Step Process
1. Complete Pre-Licensing Education
Every state requires completing an approved pre-licensing course before you can sit for the exam:
- Hours: 20 to 60 hours depending on state and line of authority
- Format: Online or classroom (most people choose online for flexibility)
- Cost: $100 to $300
- Content: Insurance concepts, policy types, state regulations, ethics
2. Pass the State Exam
After completing education, you take the state licensing exam:
- Administrator: PSI or Pearson VUE (varies by state)
- Format: Multiple choice (100 to 150 questions)
- Duration: 2 to 3 hours
- Pass score: 70% in most states
- Exam fee: $40 to $100
- Pass rate: Approximately 60% to 70% first-time
You can typically schedule the exam within days of completing your pre-licensing course.
3. Submit Your Application
After passing:
- Apply through your state’s Department of Insurance
- Background check and fingerprinting (most states)
- Pay the application fee ($50 to $150)
- Processing: 1 to 3 weeks
4. Get Appointed by an Insurance Company
Your license allows you to sell insurance, but you must be appointed (authorized) by each specific insurance company whose products you want to sell. Appointments are typically arranged by your employer or agency.
View your state’s specific requirements at LicenseCompass.
Total Cost Breakdown
| Expense | Range |
|---|---|
| Pre-licensing course | $100 – $300 |
| Exam fee | $40 – $100 |
| Application fee | $50 – $150 |
| Background check | $20 – $50 |
| Total | $210 – $600 |
This makes insurance one of the most affordable professional licenses available.
Captive vs. Independent Agents
After getting licensed, you’ll choose between two business models:
Captive Agent (work for one company):
- Sell only that company’s products (e.g., State Farm, Allstate)
- Training and leads provided
- Lower commission rates (5% to 15%)
- Salary + commission structure common
Independent Agent (represent multiple companies):
- Offer products from many insurers
- Higher commission rates (10% to 25%)
- Must generate your own leads
- More entrepreneurial, higher income ceiling
Salary and Earning Potential
Insurance is one of the highest-earning licensed professions relative to entry requirements:
| Career Stage | Annual Earnings |
|---|---|
| First year (captive) | $35,000 – $50,000 |
| Experienced (3-5 years) | $50,000 – $80,000 |
| Top performers | $100,000 – $200,000+ |
| Agency owners | $150,000 – $500,000+ |
Residual income is a key advantage in insurance — you earn renewal commissions every year a client keeps their policy, building a growing income stream over time.
Continuing Education & Renewal
Most states require 24 hours of CE every 2 years, including ethics hours. Renewal fees are typically $50 to $100.
Some states also require specific training in:
- Flood insurance
- Long-term care
- Annuity suitability
- Ethics (required separately in most states)
Multi-State Licensing
Insurance uses a non-resident licensing system rather than compacts. If you want to sell in multiple states:
- Get your resident license in your home state
- Apply for non-resident licenses in other states
- Most states have reciprocity — no additional exam needed
- Non-resident application fee: $20 to $100 per state
The National Insurance Producer Registry (NIPR) streamlines multi-state applications online.
Frequently Asked Questions
How long does it take to get an insurance license? Most people complete the process in 2 to 4 weeks: 1 to 2 weeks for pre-licensing education, then scheduling and passing the exam, followed by 1 to 2 weeks for application processing.
Is the insurance exam hard? The exam has about a 60% to 70% first-time pass rate. With thorough study of your pre-licensing materials and practice exams, most candidates pass on the first try. If you fail, you can retake it (usually after a waiting period of 1 to 14 days).
Can I sell insurance without a license? No. Selling, soliciting, or negotiating insurance without a license is illegal in all 50 states and can result in fines and criminal charges.
Which insurance license makes the most money? Life & Health licenses generally offer higher commissions per sale (especially life insurance and annuities). Property & Casualty provides more consistent, recurring revenue. Many successful agents hold both.
Do I need a college degree to sell insurance? No. A high school diploma is sufficient in all states. However, a degree in business or finance can help with career advancement into underwriting or management roles.
Data sourced from CareerOneStop (U.S. Department of Labor). Verify current requirements with your state department of insurance.