Insurance agents don’t necessarily need very much formal education at all, but as with any profession in which you work with all walks of life, it’s good to have some education and broad exposure to many types of people. For many folks, an exposure to diversity is one of the most important aspects of attending a four-year institution. It helps if you plan to have a wide circle of clients. Even though a college degree is beneficial, only a high school diploma or equivalent is required if you want to become an insurance agent. Continuing education for insurance agents with minimal education is common, and the most ambitious go on to get their professional designations in the form of a CPCU or CLU (more on these below). According to the U.S Bureau of Labor, more than a third of sales agents go on to take classes after getting a bachelor’s degree. Some even go on to get their master’s degree in finance or another relevant subject. Handling risk for wealthy clients is not a job to be taken lightly, so if this is what you aspire to do, you’ll want a good education to become an insurance agent. In fact, agents with a four-year degree rarely feel that their education was a waste of time.
You’ll need an insurance license from your state for each type of insurance you want to sell. For instance, if you want to sell auto and home insurance, you’d have to pass the Property and Casualty licensing exam. Life and Health insurance fall together in one pre-license course and exam. Requirements for licensing vary depending on which state(s) you plan to work in. Usually, you’re required to take a course and pass an exam given by the state.
An insurance agent can study anything as an undergraduate student but there are some majors that are especially useful to have. People with a major in psychology may have a good grasp of human psychology and behavior, which will help win over clients. A person with a major in finance or risk management will have an easier time understanding insurance than say an art history major, whose line of studies is almost completely irrelevant to what they’ll be doing on the job. That may be okay too. It’s good for an insurance agent to have a well-rounded education and a vibrant personality, and if you’re managing the risk of an art collector’s collection, you may even be able to start up some great banter with a client so don’t rule it out entirely.
Again, while it’s not required that an insurance agent have a bachelors or masters degree, it never hurts to have some level of higher education. Some majors are more beneficial than others. For instance, if you’re selling life insurance with annuities, a graduate degree in finance is great. A law school degree is also beneficial for agents who want to understand the legal process of transferring estates and that sort of thing (life insurance agents). In fact, having a law degree is beneficial for any agent who plans to open their own agency. There is no better way to protect oneself than to know the ins and outs of the law. Having a general knowledge of the law as it relates to insurance is also helpful if you have a website. You’ll better understand the liability of making certain claims that a client may call you out on.
There are several insurance designations that can help you either enter the insurance industry or to advance in your current role as an agent. Managers or those hoping to advance to management roles are encouraged to take some of these courses. Taking these tests will show your manager that you are actively working on developing yourself in your career. In fact, you may be surprised to find out that your employer is willing to pay your tuition or at least part of it. You never know unless you ask!
Chartered Property Casualty Underwriter (CPCU)
If you want to be the CPA of the insurance industry, this is the degree you need, and only 4% of working agents have it. Generally speaking, those with the highest salaries and those in management positions hold this designation. As for how intensive it is, here is what should expect course work on risk management, business law, insurance operations, financial planning and property-liability insurance.
People in the insurance industry who pursue a CPCU include: agents, brokers, underwriters, adjusters, claims managers, risk managers and business analysts. This designation can help many different types of insurance agents advance in their positions by making them more knowledgeable about how the industry operates.
To earn the degree, you must pass 9 exams (4 foundation courses, 3 personal lines or commercial lines courses, 1 elective course and 1 ethics exam).
This degree doesn’t come cheap. The CPCU designation costs between $35,00 and $5,000, depending on your choice of study materials. Some college credits may apply for the degree and you can apply for scholarships. And don’t forget, some employers will pay at least part of the fees involved.
Chartered LIfe Underwriter (CLU)
A CLU is for agents who want to specialize in life insurance and estate planning. To complete this designation, you must take 5 core classes and 3 elective courses. You must also pass a 100-question 2-hour exam.
If you plan to do estate or business planning in addition to selling life insurance, this competitive degree will demonstrate expertise in these sorts of financial services. To maintain the designation, you are required to take 30 hours of continuing education each year. All CLUs must adhere to The American College of Financial Services’ Code of Ethics or your designation may be removed for unethical conduct.
According to the college, professionals who hold a CLU average a 51 percent greater income than their colleagues.
What the preparation for the designation is designed to do is help agents learn how to set and reach financial goals as well as serving health insurance needs with property and liability risks in mind. You’ll also be able to help clients establish a secure financial future with the right life insurance and annuity products. You’ll also know how to enhance estate value and protect existing assets.
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