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What is an Insurance Producer?

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Shuman Roy is an entrepreneur, business owner, and musician. He started RoysNoys, LLC in 2013 as a music production and education service company. He also offers small business consulting and advisory services to help businesses get from start-up mode to turn-key operations. Shuman earned his M.B.A from the Stern School of Business in 2001...

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Joel Ohman is the CEO of a private equity-backed digital media company. He is a CERTIFIED FINANCIAL PLANNER™, author, angel investor, and serial entrepreneur who loves creating new things, whether books or businesses. He has also previously served as the founder and resident CFP® of a national insurance agency...

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Reviewed byJoel Ohman
Founder, CFP®https://res.cloudinary.com/quotellc/image/upload/insurance-site-images/truthaboutins-live/2020/03/joel-ohman.jpg

UPDATED: Mar 13, 2020

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Well, let’s start by defining “producer.” If you look up the word in any old dictionary, it will say something to the effect of, “someone who produces.” Sheesh. Thanks for the clarification.

When it comes to the insurance industry, a producer is anyone who holds a job in the sales department…producing business for a particular company.

In short, producing insurance sales.

You may also hear the word of “broker” or “agent” used interchangeably with producer. All three of these positions deal with selling insurance policies.

Of course, many different roles can be assumed in any of these positions.

How Do I Become A Producer?

Each State Department of Insurance has its own set of rules and regulations dealing with how one becomes a licensed agent. Simply put, no license, no insurance sales.

Additionally, each “line” of insurance will require a different license. Property & Casualty and Life & Health insurance are the two main categories of licensing.

You would probably need to decide which to focus on first, though a single individual can obtain both licenses.

Assuming you are at least 18 years old and reside in the state you wish to conduct business, here are the basic requirements:

Instruction – you may have to take a state sanctioned licensing course in a classroom setting. However, there are several insurance license training courses available online. You should take a classroom course if you are new to the industry.

Exam – A licensing exam must be satisfactorily completed, i.e. you need to pass a test based on the information you were taught from whichever study course format you chose above.

Fees – You will have to pay all state licensing fees associated with processing your application prior to receiving the actual license.

Appointment – A producer must be appointed with at least one insurance company in order to transact business on its behalf. No matter who you are, you need a product to sell.

Note: It is possible to obtain a license in any state provided you are principally licensed in your “home” state. More on that later.

Okay. So you’ve accomplished the steps above and received your shiny new insurance license and are ready to take on the world…or at least sell an insurance policy. What’s next?

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Continued Education & Licensing

An insurance sales professional must complete continuous insurance training over their career in order to maintain a valid license.

This is achieved by completing continuing education (CE) courses for credit. For example, you may be required to complete 30 hours of CE courses in order to be considered for license renewal.

There is an entire industry out there for continuing education, so you will have no problem finding the courses both in person and online…both of which are going to cost you.

But there are freebie courses out there if you keep your eyes peeled or belong to certain organizations that offer them to its members.

And there is a continuing education exemption for those who are fortunate enough to have been licensed as an insurance agent for at least 20 years.

Licensing In Other States

Depending on which state you are currently licensed (or seeking licensure), it may be pretty easy to obtain a license for additional states.

Many states have “grouped together” and will accept a “passed” examination from any one of the member states. So one passed test may be good for multiple state licenses.

Of course, there are still state specific fees for licensing that must be paid to each individual state.

And some states are not so liberal and do require agents to pass separate exams and pay the additional fees.

Final Word

It’s a sales job. And it’s a tough job. There is plenty of opportunity, but also a lot of competition.

It is recommended you start at an existing insurance agency as a Customer Service Representative (CSR) or work on the “corporate” side of the industry to determine if insurance is for you before setting out on your own.

After all, getting licensed as an agent may be an epic waste of time if you determine you are not cut out for insurance or sales after completing the process.

Tip: It may be easier to start as a captive agent, one who represents a single company, before becoming an independent agent, one who works on behalf of multiple carriers.

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