February 18, 2022

Why It Is Important to Keep Your Insurance License Renewal Updated

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You worked hard to get where you are in the insurance field, and you continue to learn and grow with each passing year. Insurance professionals are an important part of our society, and many find careers within the insurance sector to be stable and highly rewarding. Unfortunately, one of the easiest ways to lose your ability to work in insurance is by failing to keep up with your license renewals. 

Some states require insurance licenses to be updated every year, every two years, or at some other interval. If you let your license expire, you may have a much more difficult time getting it back. Learn more about the importance of keeping your insurance license updated, and some other tips about license renewal, below. 

Types of licenses

There is no one-size fits all license to allow you to sell insurance to anyone and everyone. Depending upon you and your client's needs, you may only need one type of license, or you may need several. It's important to double-check which licenses are required to perform any type of insurance sales before doing so to avoid penalties or license suspensions or terminations. Here are the most common types of licenses insurance professionals may need on a daily basis:

Resident (State) license renewal

Resident license renewal is required for insurance personnel that plan to work with clients in the state they consider their home state. Most often, the state where an insurance professional lives is their home state, but some agents keep the state where they formerly lived as their designated home state. Either way, a resident license renewal is needed at regular intervals to sell insurance to people that reside in whichever state is your home state. 

Non-resident (State) license renewal

If you want to sell insurance to people outside of your home state, you will need an updated non-resident license renewal.  It is very common for insurance agents to be licensed in states that neighbor their home state. If, for example, you live in Iowa and want to sell insurance to a person in Missouri, you would need an updated Missouri non-resident state license to do so legally. 

Resident (State) adjuster license

Resident adjuster licenses are for adjusters that serve those in what is considered their home state. Adjusters can work with people in different states, but they must declare a designated home state, and have an updated resident adjuster license for that state. 

Non-Resident adjuster license renewal 

Some states allow residents to seek help from insurance agents in other states, especially after a natural disaster strikes. When these occur, the number of people seeking claims often outnumbers the number of adjusters that can offer help, so many residents have to turn to non-resident adjusters. In order to conduct business outside of a home state, however, an adjuster will need an updated non-resident adjuster license. 

To renew an existing insurance license, you will need to visit the National Insurance Producer Registry and fill out the appropriate applications and pay the relevant fees. Once you have your license squared away, you may find it helpful to focus on insurance marketing to acquire more customers. 

Why you need a license

Insurance is a complex business that requires unique skill sets and a solid knowledge base. Not just anyone can legally sell insurance. People that have not received the right training can effectively leave their clients in financial ruin if they don't know what they're doing, and convince customers to purchase the wrong type of insurance for their needs. You need a license to legally sell insurance because a license proves to the government, insurance agencies, and clients that you know the ins and outs of insurance, and that you can help them get the exact policy they need.

Selling insurance without a license is a dangerous game. Selling insurance without the proper credentials in some states is considered a misdemeanor or even a felony. Crimes of this nature can come with penalties that add up to thousands of dollars, and those selling without insurance licenses may actually see jail time.

Getting an insurance license through proper channels only takes a few weeks or months in most states, and it's simply not worth risking the above consequences just to sell insurance without the right credentials. Plus, without a proper license, it will be hard to perform insurance lead generation to help grow your client base. 

How to manage your license

Managing your license(s) isn't too complicated, and it only takes a few minutes to renew your license when it is about to expire. Simply:

  1. Update contact information

Each time you renew your license, review your contact information. This includes an email address, phone number, and address. Updating this ensures that the licensing agency can contact you when needed, or they can mail you important forms and publications. 

  1. Print license

We always recommend printing your license for display in your office, which you can usually do immediately after you renew your license online. This shows prospective customers that you do indeed possess the correct credentials, which makes them feel even more confident in your services and professional opinions. 

  1. Complete continuing education credits

Most insurance professionals need to complete 24 hours of continuing education every two years, though some states may have different rules and requirements. Some extra insurance services, such as vending life insurance, may require additional continuing education. This ensures that insurance professionals stay up-to-date on industry trends and practices to best serve customers. 

How to check up on your license

If you want to check on your license status, simply visit the NIPR license database. You can look up your license or licenses using your National Producer Number (NPN), and it will tell you the status of your license. 

Why keep it updated?

Keeping your license updated doesn't actually take much time and effort, but it is a task that can be easily put off or forgotten. Even still, it's important that you keep your credentials up to date for dozens of reasons, but the following are perhaps the three most common:

  1. Your license gives you the ability to legally sell insurance

Having an updated license is the only way you can legally sell insurance. Many individual sellers and companies cannot recover financially after they are severely penalized for not having proper licensing, so not having a license can affect more than just you personally. 

  1. It can expire without you knowing it

As mentioned above, each state has a different set of guidelines for how often you must renew or update your license. If you aren't careful, you may miss your chance to renew your license. This can result in you having to go through the entire training and onboarding process again just to receive the license you already had. 

  1. Even if you don't currently sell insurance, you may want to re-enter the industry someday

It happens- sometimes insurance professionals move onto other ventures. When this does occur, many decide to let their insurance licenses expire, but it's actually a better idea to keep your credentials updated. Even if you don't think you'll re-enter the insurance industry, having those credentials looks great on a resume, and it also allows you to return to insurance if you decide to come back. 

Keeping your credentials updated means that you won't have to jump through all of those hoops to get your license back if you decide to rejoin the insurance workforce. In most cases, it's also more cost effective to continue renewing your license instead of going through the entire credentialing process again. 

Tips on remembering to renew your license

It's not always easy to remember to renew your license, but you're far less likely to forget when you:

  1. Create an auto reminder on a digital calendar

Digital calendars, such as the one available in most email clients, computers, or smartphones, can be a valuable tool for remembering to renew your license on time. Simply create a reminder at the appropriate intervals, and you should receive an alert that lets you know it's time to renew! Be sure to give yourself ample time to renew your license before a deadline, so aim to set your reminder at least a week before that deadline. 

  1. Mark it on a physical calendar

Some people prefer to stay organized with physical calendars or agendas, which can also help to remind you of your license renewal. Simply write it on a calendar hanging in your office wall, or write a reminder in your weekly agenda to stay on top of renewals. 

  1. Instruct an assistant or secretary to remind you

If you have an assistant or secretary, you can always ask them to remind you to renew your license. They might set their own digital or calendar reminders, and they will pass along the message at the right time. 

Final thoughts

Although insurance professionals spend most of their time and focus on how they can best serve their customers, there are a few important tasks outside of that scope that must be handled. Renewing licenses on time is one task that cannot be overlooked, but the good news is that staying on top of it isn't all that difficult. Just set yourself a reminder, mark it on your calendar, or enlist assistance if necessary, so you can focus on growing your book of business. 

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