Getting a life and health insurance license isn't free, but it's not prohibitively expensive either. Total costs typically range from $200 to $700 depending on your state, the pre-licensing course provider you choose, and whether you need to retake the exam. If you budget carefully and pass on your first attempt, you can get licensed for well under $400 in most states.
Here's a breakdown of every cost you should plan for before you start the process.
Most states require a minimum number of pre-licensing education hours before you can sit for the licensing exam. This is typically 20–40 hours for life and health insurance combined, though some states require more. You complete this coursework through an approved provider — either online or in a classroom setting.
Online pre-licensing courses are the most popular option because they're self-paced and typically cheaper than classroom alternatives. Costs vary:
Providers like Kaplan Financial, ExamFX, America's Professor, and Xcel Solutions all offer pre-licensing courses. Prices vary, and sale prices are common — it's worth comparing a few providers before purchasing. A cheap $60 course that has poor explanations will cost you more in the long run if you fail the exam and have to pay retake fees.
Your state insurance department maintains a list of approved pre-licensing providers. Only courses from approved providers count toward your required hours — verify approval before purchasing.
After completing your pre-licensing hours, you'll schedule and take the state insurance licensing exam. The exam is administered by third-party testing providers — most states use PSI (formerly Pearson VUE's insurance division), Prometric, or Pearson VUE directly.
Exam fees typically run:
Many states offer combined Life and Health exams, but some require separate exams for each line. A combined exam typically costs the same as a single exam — it just covers both topics. If your state requires two separate exams, budget double.
If you need to know the exam fee for your specific state, check your state's Department of Insurance website or the testing provider's site (PSI or Prometric) directly. Fees are published and current on those sites.
After passing the exam, you apply for your license through your state's Department of Insurance (or equivalent agency). This application carries a fee separate from the exam fee:
States also charge license renewal fees, typically every 2 years. Renewal fees are usually in the $30–$100 range and may require completing continuing education (CE) hours — typically 24 hours per renewal period, though this varies.
Most states require a background check as part of the licensing process. This is often handled through a fingerprinting service — either at a state-designated location or through providers like IdentoGO or L1 Identity Solutions. Background check fees typically run $25–$80.
Some states waive or bundle the background check fee with the application. Check your state's specific process — some require fingerprinting before the exam, others after, and a few don't require fingerprinting at all for insurance licenses.
Here's what the total investment looks like across different scenarios:
Budget path (passing on first attempt, basic course):
Typical path (passing on first attempt, quality course):
Two-exam state, first attempt:
Retake scenario (one failed exam, one retake): Add $35–$75 to any of the above totals, plus potential waiting period costs if you need to delay your start date.
A few strategies meaningfully reduce your total licensing cost:
This is the biggest cost-saver. Retake fees — typically $35–$75 per attempt — add up quickly, and most states require a waiting period between attempts, which delays your income. Investing in better study materials upfront almost always costs less than paying for retakes.
The national first-attempt pass rate for insurance licensing exams varies by state and line of authority, but typically falls around 50–65%. That means roughly a third to half of first-time test-takers don't pass. Good preparation — not just completing the required hours, but actually learning the material — is your best insurance policy here.
Pre-licensing course providers frequently run promotions. Kaplan, ExamFX, and similar providers often discount courses by 20–40% around holidays or end-of-quarter periods. If you're not in a rush to get licensed, waiting for a sale can save $50–$100 on your course.
Many students make the mistake of treating the pre-licensing course as the only preparation they need, then find themselves unprepared for the actual exam's question format and difficulty. The pre-licensing hours teach you the material; focused practice tests prepare you for the exam format. Both matter, and not using practice tests is a common (and costly) mistake.
Requirements vary significantly. Some states require separate exams for life and health lines; others combine them. Some have higher continuing education requirements at renewal. Understanding your state's specific path before you commit to a course or study plan helps you buy only what you need and budget accurately.
The exam tests your knowledge across two main areas:
Life Insurance covers: types of life insurance policies (term, whole, universal, variable), policy provisions, beneficiary designations, underwriting concepts, group life insurance, and tax treatment of life insurance products.
Health Insurance covers: types of health plans (individual, group, HMO, PPO, HSA), disability income insurance, long-term care insurance, Medicare supplements, COBRA, ACA provisions, and health insurance underwriting.
State-specific insurance law and regulation is tested heavily — this is the section many candidates neglect because it's state-specific and not covered as well in generic study materials. Know your state's insurance laws: commissioner powers, producer licensing requirements, claims handling rules, and consumer protections. The health and life insurance exam prep section on this site includes state law content.
Licensing costs don't stop at initial licensure. Plan for:
Many insurance agents work for captive agencies (single-carrier employers like State Farm, Allstate, or New York Life) that cover some of these costs as part of employment. If you're exploring independent licensing, factor in these ongoing costs.
If you're also pursuing the Arizona life and health insurance exam or working in specific states, check each state's Department of Insurance for current fee schedules — fees update periodically and the authoritative source is always the state.
The cost of getting a life and health insurance license is modest relative to the earning potential of a licensed insurance producer. Even captive agents in entry-level roles typically earn $35,000–$55,000 in their first year; experienced agents and independent brokers can earn significantly more depending on their book of business.
The ROI on your licensing costs is high if you treat preparation seriously. Invest in a quality pre-licensing course, use practice tests to prepare for the exam format, and come to test day ready to pass on your first attempt. The savings from passing once versus paying retake fees — and the faster income start — more than justify spending an extra $75–$100 on better prep materials.