16 Tips to Start Health Insurance Agency Business

Health Insurance Agency Business: Health insurance agents enjoy decent pay in return for a short period of training.

Each state has its own specific rules, but all potential agents can anticipate a general framework.

First, begin your criminal background check.

Next, complete your licensing training and pass a state-administered exam.

Finally, decide whether to become a captive agent or an independent agent.

When you know what to expect and how to navigate the procedures, you’ll increase your chances of success.

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Health Insurance Agency Business
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Health Insurance Agency Business

1. Search for your state’s rules.

Ask your state’s Department of Insurance (DoI) if they have information on completing the background check.

If they don’t have the direct information.

They should provide you with a website and/or contact information of someone at the state government level.

Health Insurance Agency Business

  • For example, in California, you need to complete a form about your background and get fingerprinted. Your fingerprints will be sent to the FBI, and the form will be sent to the state Department of Justice. The DoI also checks with the National Association of Insurance Commissioners, State Producer’s Licensing Database, and Special Activites Database for possible offenses.

Health Insurance Agency Business

2. Read the fine print.

Before you sign off or remit payment, you should always know exactly what you’re getting into.

Review the policies for refunds and rescheduling your appointment.

Also, if you have an arrest record, read carefully whether you can still qualify for licensing.

Health Insurance Agency Business

  • For example, in Connecticut, a criminal record may disqualify you from getting a health insurance license. Felonies, drug offenses, fraud, or other financial crimes within the past 5 to 10 years will often disqualify you. Check with your state DoI if you have any reason to fear your background will be a problem.

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Health Insurance Agency Business

3. Schedule your appointment.

Each state has a different procedure for completing the criminal background check.

Read and follow the instructions carefully.

Some states give you the option of scheduling your appointment online or on paper.

Others have moved to a strictly online format.

  • For example, in Ohio, you have to request your background check through a registered WebCheck vendor. Specify that your background check is to become a licensed health insurance agent. You must then have the results sent directly to the state DoI.

Health Insurance Agency Business

4. Pay for the background check.

Your state government should have a website detailing how to pay.

Depending on your state’s regulations, you’ll either have to pay in advance or during your appointment.

Fees also vary from state to state.

Make sure you have a valid credit card or access to a certified check/money order.

Some states don’t allow payment by cash or personal check.

  • For example, Ohio applicants pay the WebCheck vendor directly.
  • The vendor only accepts MasterCard, Visa, or American Express.
  • You cannot pay in cash, check, or money order.

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5. Go to your appointment.

Check your state government’s website for all the materials you’ll need.

Specifics vary in each state.

However, you should have your government-issued photo identification.

Such as a driver’s license or passport.

Expect to be fingerprinted and answer yes/no questions about your history.

Health Insurance Agency Business

  • For example, in New Jersey, you must have a government-issued photo identification.
  • This can be a valid passport or a driver’s license.
  • Your ID must include your full name, date of birth, and street address.
  • You also need to bring a completed Universal Form identifying you as a prospective adjuster or producer.

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Health Insurance Agency Business

6. Wait for your results.

Depending on your state’s laws.

The results of your background check might be sent to you or directly to your state’s DoI.

Some states require organizations like the FBI to send the results directly to the DoI to be considered valid.

Always double check your state DoI website for specific instructions and follow them to the letter.

Health Insurance Agency Business

7. Get info on your state’s guidelines.

In nearly all states, health insurance agent licenses come in a package with life insurance qualifications.

Ask your DoI about the exact requirements for an insurance license in your state.

You should also ask for a list of providers for the education and testing requirements.

If the board doesn’t have this information, they should be able to refer you to the appropriate sources.

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Health Insurance Agency Business

8. Register for your training.

Find out your state’s required courses to take for licensing.

When you enroll, you’ll have to pay a fee for your license application.

The exact amount varies between states.

You can opt for traditional on-site classroom instruction or self-guided distance learning.

Health Insurance Agency Business

9. Complete your education requirements.

State DoIs require documentation of successful course completion.

In most cases, you need to complete at least 40 hours of training before you can take the exam.

Check your state’s guidelines for study time caps.

Health Insurance Agency Business

  • For example, Florida requires licensing students to either complete their studies within six months or re-apply for licensing. As a prospective agent, you’ll have to take at least five credit hours of Law and Ethics Update.
  • If you live in Florida and want to combine life insurance into your business, register for CE 5-215. If you just want to sell health insurance, register for CE 5-240. Regardless of what exactly you want to sell, you’ll also have to register for 19 credit hours of related electives from the Course Authority drop-down list.

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Health Insurance Agency Business

10. Schedule your licensing exam.

You’ll have to pay a fee to take the exam.

Some states require proof of course completion before you can register.

Others require you to take the certificate with you to the testing center on exam day.

Check with your state DoI for specific instructions.

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  • For example in California, you have to schedule your exam online with PSI Exams. Click “Government/State Licensing Agencies.” Select California from the first drop-down list on the next page. From the list that appears, select “Department of Insurance.” Then, select the correct classification in the next list. There are four categories that contain health insurance.
  • California applicants have to pay a $50 fee for the exam. Pay online with a major credit card. When you report to the testing site, bring a valid photo ID (California driver’s license, military ID, or passport). Since you should have nothing else at the testing site, except a pencil and a sheet of scratch paper, you’ll need to show proof of course completion before the exam day.

Health Insurance Agency Business

11. Take your exam.

Use standard test-taking strategies (such as process of elimination and reading carefully) to maximize your performance.

Check your state’s DoI website for study materials and testing information.

A passing score is usually 70 percent or higher.

  • For example, Florida provides an outline of the examination contents online.
  • You’ll have two hours to take the test, which consists of 15 pretest questions and 85 scored questions.
  • The test covers the types of insurance policies; their provisions, clauses, and riders; social insurance; other miscellaneous concepts; underwriting procedures; and how these concepts relate to state laws and regulations.

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12. Receive your license.

Most licensing tests are scored on-site.

If you pass, you’ll receive a temporary license so that you can immediately seek employment.

Ask your state DoI if you’ll automatically receive a formal license or if you need to apply for one.

  • If you fail the exam, check state’s regulations regarding retesting.
  • Look into how many times you can retake the test.
  • You should also check on how long you have to wait between retesting sessions.
  • Ask about appealing your results if you believe your test was scored unfairly.

13. Join an industry association.

 Organizations like the Association of Health Insurance Advisers (AHIA) require members to pay dues.
However, they also provide benefits to their members that could give you an edge in the industry.
Examples include further training and networking opportunities.
If you don’t have a job yet, networking events could help you out.
If you have a job with an agency or if you’ve decided to go independent, you could begin to grow your customer base through these organizations.

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14. Apply to become a captive agent.

In this kind of employment, you’ll sign a contract binding you to one agency.
You’ll have access to office space and assistants who can process your paperwork.
If this option is for you, check with prospective employers before you begin the licensing process.
Many companies will keep a spot open for you while you train.
Some might even provide help with exam prep.

Health Insurance Agency Business

  • In addition to networking through associations and finding prospective employers before you’re licensed, you can try the standard job-hunting method of checking with employment websites like Monster or Indeed. Keep your résumé and licensing information updated in the database. Make your résumé available for prospective employers to view.

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15. Sign on as an independent agent.

In this capacity, you may represent multiple companies simultaneously.

You’ll also get a higher commission than a captive agent.

On the other hand, you’ll have to process your own paperwork.

This could consume time that you’d otherwise spend seeking new clients as a captive agent.

You’ll also have to furnish your own workspace.

Some states require additional training to become an independent agent.

Check with your DoI for specific guidelines.

  • To get started, you’ll have to register your business with a certified lawyer and hire an accountant for tax planning. Next, you’ll have to buy insurance policies that cover errors and omissions, workers’ compensation, and business owner policy.
  • To grow your sales, you’ll need an online presence at a variety of social media sites like LinkedIn, Twitter, and Facebook. You should also join a cluster group that will help you find contacts and potential clients. It also helps to check with established agents for lists of their customers that they’d be willing to transfer to your name.

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Health Insurance Agency Business

16. Why do insurance agents need to be licensed?

There are rules and guidelines that they need to follow.
Clients will give a lot of private information to a health insurance agency.
And they need some peace of mind about how that information will be handled.
Among other things, official licensing helps to ensure that the insurance agent can be held liable if a client’s information is mishandled.

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