According to estimates, the average health insurance agent salary is $73,417 per year.
This is already a decent income, but with experience and dedication, you can grow your book of business and earn even more than this.
Another pro to becoming a health insurance agent is the job prospects. The insurance industry is facing a huge talent shortage, and the current unemployment rate is merely 1.5%.
Becoming an insurance agent is also a lot simpler than many people think.
Keep reading to find out how to start selling health insurance.
Education Requirements for Becoming a Health Insurance Agent
Insurance sales is one of the few careers where you can earn great money without a degree.
You can become an insurance sales agent with just a high school diploma. However, having a degree in a related field like business or finance won’t hurt. Some insurance employers may prioritize applicants who have degrees.
If you’re planning on working as an independent agent, not having a degree shouldn’t be an obstacle to your health insurance career.
Besides holding a high school diploma, you will also need to sit a state pre-licensing exam.
Most states require aspiring agents to undertake pre-license education before they can take their insurance licensing exam.
These are the primary educational requirements. You might also need to carry out product-specific training and complete certain health insurance-specific certifications.
Enrol for Pre-license Training
Depending on what state you live in, the first step to becoming an insurance agent is to enroll in pre-license training. Requirements differ by state, so it’s a good idea to clarify your individual state’s pre-license requirements.
The best place to start is with your state insurance department website. If you can’t find the pre-license training requirements listed on their website, you can contact your state’s insurance department for further details.
To reach your state insurance department, check out this directory list.
Your state insurance department will be able to provide you with a list of approved pre-license education providers.
Once you have a list of providers to choose from, you can select one that fits your needs. Some education providers might require you to attend in-person lessons. Others might offer more flexible online training modules.
Costs can differ between providers, as well as course duration, and included study materials.
Once you have selected a provider, you’ll need to register for and complete the course. Most courses involve 20 to 40 hours of instruction, but this can vary between states and providers.
The coursework will cover health insurance policy basics. It should also cover the laws, ethics, and regulations around selling health insurance.
A lot of providers will give you practice exams to complete. It’s highly recommended that you use these, as they can help you prepare for the real test.
Take the Health Insurance Agent License Examination
Once you’ve completed any mandatory pre-license training, the next step is to book your state licensing exam. You will need to do this through your state’s insurance regulatory department. They will be able to give you information on the exam locations, registration procedures, and dates.
Your training provider might also be able to help you book your license exam.
Most licensing exams take between 1.5 to 3.5 hours. You’ll have to answer between 75 to 150 questions or more. Most exams include true/false, multiple-choice, and scenario-based questions.
Pass rates can vary widely, but usually fall between 50% to 70%.
Apply for Your License
Once you’ve passed your license exam, you’ll need to apply for your license. Your state insurance department will have specific instructions for this process.
Most states require you to submit an application form, undergo a background check, and pay a licensing fee.
After you submit your application, you may need to wait several weeks or more to receive your license. Background checks and application backlogs can extend this timeframe.
Some states might issue you a temporary license during this time. The temporary license will allow you to start selling insurance while you wait for your official license to arrive.
A lot of states have an online portal you can use to check the progress of your application.
Decide if You Want to Become an Independent or Captive Agent
Before you start selling insurance, you’ll need to decide whether you want to become an independent or a captive agent.
Independent health insurance agents work for themselves. Captive agents are employed by carriers.
As an independent agent, you can contract with multiple carriers and sell a wider range of health insurance policies. Captive agents can only sell the products their carrier offers.
Captive agents also tend to earn less than independent agents. For example, independent agents can earn up to three times more commission on auto and home policies than captive agents.
Besides earning higher commissions, being able to sell a wider range of products can also help increase your earnings. Instead of punting a limited list of health insurance policies at clients, you can offer them tailored recommendations that truly fit their needs.
This can result in more sales, happier clients, and more referrals.
Although independent agents can earn more, they also have more expenses. You will need to generate your own leads and pay for your own marketing and business expenses.
At the same time, becoming an independent agent will allow you to be your own boss and enjoy ultimate flexibility.
Independent agents also have more scope for growth. You can operate as a solo self-employed agent, or you can start your own brokerage.
Get Contracted or Apply for a Position With a Carrier
If you want to become an independent insurance agent, the next step is to get contracted. You can contract with carriers directly, or work with an Insurance Marketing Organization (IMO).
IMOs act as intermediaries between insurance agents and carriers. With an IMO, you can contract with multiple insurance carriers. Some IMOs also offer certain resources, training, and support to their members.
In return, IMOs take a share of agent commissions. You will also need to sign a contract with the IMO, and some contracts have strict release terms. You might also have restrictions on which carriers you can contract with.
Contracting with carriers directly allows you to keep all of your commission, but it can get complicated if you’re planning on contracting with a variety of carriers. Some insurance carriers also don’t contract directly with independent agents.
Carry Out Any Product-Specific Training
A lot of carriers require health insurance agents to complete product-specific training before you can start selling their polices. This will give you an in-depth knowledge of the products so you can provide accurate information to clients.
Health insurance is subject to various regulatory laws and guidelines. Product-specific training will verse you in how to comply with these on an individual product basis.
The format of product-specific training can vary between carriers. Some carriers might require you to attend in-person training sessions. Others might offer webinars and online training modules.
Complete Any Additional Certification Processes
Besides product-specific training, you might also need to carry out additional certification processes. For instance, if you want to start selling Medicare, you’ll need to gain an AHIP certification.
There are a few AHIP certifications. The Medicare Basics certification covers the different parts of Medicare, as well as eligibility criteria and enrollment periods. You can also gain AHIP certification for:
- Medicare Advantage
- Medicare Part D
- Medicare Supplement
AHIP also offers training models for employer-sponsored group health plans, Medicare compliance, and Fraud, Waste, and Abuse (FWA).
Invest in Insurance Sales Training
Once you’ve passed your license exam and completed any additional certifications and product-specific training, you’ll be pretty well-versed in the products you’re selling and the greater landscape of health insurance.
But will you know how to sell those products? Even if you have an innate knack for selling, it’s still a good idea to invest in insurance sales training.
Health insurance sales training will equip you with the strategies and selling techniques you need for success. Comprehensive training will walk you through the practical problems of:
- How to attract the right health insurance leads
- How to lead them through your sales funnel
- How to get them to convert
Here at AgentVia, we have a variety of courses designed for new agents who want to break into the insurance sales game. Our modules will teach you everything from how to market yourself to the best ways to get referral leads.
Transitioning to a Career as a Health Insurance Agent
Once you’re a licensed health insurance agent, the next step is to transition your career. If you want to work directly for a carrier, you’ll need to put together your resume and start browsing health insurance agent jobs.
If you want to work independently, you can either jump right in or transition slowly by selling insurance on the side.
Do You Want to Become a Health Insurance Agent?
Becoming a health insurance agent could be the start of a highly rewarding career path. You can earn well, enjoy great job security and flexibility, and help people make wise health insurance decisions.
If you’re thinking of becoming a health insurance agent, AgentVia is here to support your journey. We have a range of courses you can take, including one on selling Medicare insurance.
To get started, create a free account.