What Are The Costs To Get Licensed For Life And Health Insurance By State? All You Need To Know!)

Licensed For Life And Health Insurance By State

Generally, the costs you will incur in becoming licensed health or insurance agent include the application fee, an examination fee, education course, background check, and fingerprinting. These costs vary depending on your state; however, the total cost usually ranges between $400-$700. 

Application Fee – Each state has a slightly different fee charged for insurance license applications.

Education Course – Not every state requires you to take an education course and present a certificate before taking the exam. However, we will advise you to take this course to increase your chances of passing the exam. You can see the states that require a pre-education course here.

Examination Fee – An examination fee is another cost you will incur in pursuit of your life and health insurance license. 

Background Check & Fingerprint – There’s a fee for running a background check and taking your fingerprint. 

Health Insurance

Health Insurance

Health insurance is a method of paying for your healthcare. After selecting a health insurance provider, you will pay premiums at an agreed rate and frequency- monthly, quarterly, bi-annually, or even annually. 

In exchange for these premium payments, the insurer will cover a portion and sometimes all of your medical expenses. In 2020, the average cost for health insurance is $456 for an individual and $1,152 for a family a month. 

The Table Below Includes Different Organizations With Their Health Insurance Type. 

Health Maintenance OrganizationAll health care services are delivered through a network of health care providers. It offers limited freedom when procuring services from out-of-network providers.
Preferred Provider OrganizationLike an HMO but gives you more liberty to work with out-of-network providers at an extra cost.
Exclusive Provider OrganizationAllows more freedom when choosing care providers than HMOs but does not cover out-of-network visits that are not emergencies.
Point of Service Sales PlanThis health insurance plan is a blend of an HMO and a PPO. 

Life Insurance

Life Insurance

Life insurance is a contract between you and the insurance provider to pay a lump sum amount to your beneficiaries on the occurrence of an event, in this context- your death. 

Some forms of life insurance may target other parties other than your beneficiaries, such as mortgage lenders or creditors. Whatever the case, the concept is the same, to pay someone a certain amount when you pass. By the way, the average cost of life insurance is $27 per month, which is $324 per year. 

Types Of Life Insurance

Term It covers a period usually 5 – 30 years. It is the cheapest way to purchase life and insurance and is best suited for people who need coverage for a specific debt or situation.  
Whole It covers the duration of your life and usually has a cash value offer as part of the package. Unfortunately, it is one of the most expensive forms of life insurance.
UniversalThere are different types of universal policies. However, a common element is that they provide lifelong coverage, and some allow for flexible premium payments.
Credit Credit life insurance aims to take off the burden of repaying debts from your family members should you pass. The payout is directed to your lender and not your family members. 
Burial This policy aims to cover the funeral or burial cost of the insured. Individuals rarely get turned down for this insurance type, and no medical test is required.
Joint Here two people are covered under a single policy, usually husband and wife. The beneficiaries do not get paid until both parties under the policy have passed.
MortgageThis policy targets people worried about their family members dealing with mortgage costs when they pass. The payout is directed to the mortgage lender to cover the balance on your mortgage. 

Frequently Asked Questions

What Is The Pass Mark For Life Insurance Exams?

The pass mark for life insurance is 70% in all states, and the pass rate is 62.9%.

What Is The Pass Mark For Health Insurance Exams?

The pass mark for health insurance is the same score; 70%, and the pass rate is slightly lower than that of life insurance – 60.4%. 

What Is The Wait Time To Re-sit The Exam If I Fail The Exam?

You can find out your exam status at the center where you took the test, I.e., whether you passed or failed. Usually, a numeric score is shown if you fail the exam to help you identify areas you need to work on before retaking the exam.

However, if you fail the exam, you cannot register immediately.

You have to wait about 24 hours before registering for the exam again. Usually, the exam is taken three times a year. Should you fail the exam all three times, you may be required to retake the pre-licensing education course before registering for the exam the following year.

What Topics Are Covered For Life Insurance?

The topics you will most likely be tested on for the life insurance licensing exam include:

1. General knowledge of life insurance

2. Life insurance policies 

3. Tax issues relating to life insurance

4. Policy riders and options for life insurance coverage

What Topics Are Covered For Health Insurance?

Health Insurance licensing exams usually test the following topics:

1. Health insurance tax issues 

2. Health Maintenance Organizations (HMOs)

3. Disability income

4. Medical plans

5. Special needs individual insurance

6. Dental insurance


Becoming a licensed insurance agent is a great feat that requires hard work and dedication. However, the general process is the same, whether you decide to dabble into life insurance, health insurance, or any other sector. 

First, you have to decide on the type of insurance you want to sell and submit an application according to the rules of the state where you reside. Then, study for licensing examination, pass and approve your application. Viola, you’re a licensed insurance agent. 

The costs you incur on this process vary with the type of insurance you want to sell and your location. 


Frequently Asked Questions About the Life Insurance License?

Becoming a Life Insurance Agent?

How to Become a Health Insurance Agent?

How to Become a Licensed Insurance Agent?

How Hard is the Insurance Licensing Exam?

8 Types of Life Insurance

Insurance Agent License Requirements by State

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