Aspiring insurance professionals usually have to choose between being an insurance agent or an insurance broker. If you’re not satisfied with these choices, luckily, there is a third option: that of the career as an insurance consultant.
When you look at the insurance consultant job description it sounds a lot like an insurance broker, and in some ways, they are quite similar. That’s because typically, your role as an insurance consultant involves providing objective advice and expert guidance to businesses on many insurance matters.
You can be employed by an agency or brokerage firm specializing in insurance, or work as a self-employed independent contractor. So, what’s it like to work as one? Do you need an insurance consultant license, and how do you get one? What exactly does the role entail? We’ll shed light on these and more in this article.
An insurance consultant is someone who gives objective advice to businesses, as well as provides ongoing expertise about insurance and benefit options for a fee. An insurance consultant can take a more active role in the businesses that contract them, usually making strategic recommendations apart from finding and purchasing a policy.
Anyone trying to read an insurance policy knows that buying insurance is neither a simple nor straightforward process. If it’s complicated enough for individuals to know and get familiar with insurance terms, it's even more complex for business owners to fully understand the effectiveness of insurance policies and extent of their coverage. Buying insurance is one of the many business activities where the Latin phrase “caveat emptor” (buyer beware) applies.
Due to the complexity of navigating insurance policies, having an insurance consultant can be a sensible business move. Insurance consultants can provide businesses with a variety of critical services, like:
An insurance consultant can help companies save money in the long run, while providing insights and sound strategies that help shape their risk management and human resources plans.
In addition, hiring an insurance consultant is often a good strategy for businesses as they can perform due diligence and pore through different insurance policy options and make objective recommendations.
Part of an insurance consultant's job description is to gain an understanding of their client’s operations and how they run their business. Insurance consultants are responsible for ensuring that the policy language matches their client’s needs.
The process involved in becoming an insurance consultant is akin to the general process of becoming an insurance broker in the United States. The reason for this is because, like brokers, insurance consultants must take on similar roles and responsibilities to their clients.
However, one of the major differences is that you do not pursue a broker license. Instead, you have to get a state insurance license. To become an insurance consultant, here are the steps:
The basic requirements for insurance brokers and consultants are:
While you do not need to a bachelor’s degree, it can be advantageous. A bachelor’s degree can prepare you for the many complexities of the insurance industry as you start your career. If you apply at an insurance company with a degree, you have an edge over other applicants for the same role.
If you plan to get a bachelor’s degree, here are some suggested majors:
These degrees are recommended because they teach relevant skills and knowledge that can make you successful as an insurance consultant. For instance, a degree in communication can help you understand complex terms better and how to interpret them to clients when you give your recommendations. Law, finance, accounting, and data analytics are all important aspects of insurance policies.
And if you do well in any of these degrees, prospective employers will want to hire you over candidates without degrees.
Licensing requirements vary by state, but may entail taking a pre-licensing course, paying fees, taking the state exam, then submitting your application. You would typically be required to obtain an insurance producer license.
Get familiar with the licensing process in your state and follow the steps. The requirements and application processes can vary from state to state. You can check the requirements for a state insurance license from the National Insurance Producer Registry (NIPR).
Pre-licensing insurance courses are meant to prepare candidates for the state licensure examinations and involve choosing a line to specialize in. You will usually be asked to choose a type of insurance to specialize in, such as Life, Accident, and Health (LA&H/personal lines) or Property and Casualty (P&C).
Since you intend to become an insurance consultant for businesses, it would be advisable to choose P&C over personal lines.
Even when working as an insurance consultant, if you do insurance sales, solicit, or negotiate insurance policies, a license is generally required.
The term "negotiate" means conferring directly with an insurance purchaser or offering advice about the benefits, terms, or conditions of an insurance policy.
Since consultants often advise prospective customers on insurance terms and benefits, this role typically falls under the umbrella of negotiating. And this is what would require having an additional license. Whether the license is an agent’s or broker’s license, along with the insurance producer’s license, depends on which state the consultant is in and their exact activities.
After fulfilling the eligibility requirements and completing a pre-licensing course, you must take and pass the licensing exam. Passing scores can vary by state, but the typical passing grade is 70%.
Note that the terms "insurance agent" and "insurance producer" may be used interchangeably. For clarity, the need for a specific license depends on the state and the exact nature of your insurance consulting activities. Keep these in mind:
Some US states offer a specific "insurance consultant" license, which may be required if, as an insurance consultant, you give insurance advice for a fee but do not directly sell insurance.
Some states mandate a separate license for insurance consultants, which requires passing an examination. The exam can be the same as those for insurance producers or specific to consultants.
Other states may prevent individuals from holding both an insurance producer license and an insurance consultant license. On the other hand, there are other states that allow an insurance producer to become licensed as an insurance consultant.
In any of these cases where an individual is acting as an insurance consultant, a written contract is necessary to clearly explain the terms of the consultancy arrangement. To avoid confusion, you can consult the relevant insurance authority in your state regarding the appropriate licenses.
Being employed in an insurance-related role should help you develop the appropriate skills, knowledge, and experience for becoming a credible insurance consultant.
Having a background in auto insurance, health insurance, or life insurance would typically satisfy employer requirements for work experience, but this depends on the specific sector you plan on working in as a consultant.
Depending on your state and licensing requirements, you may be required to earn continuing education (CE) credits. For states that require a separate insurance consultant license, it is common practice to have a continuing education (CE) requirement akin to the CE requirement for insurance producers.
Check with your state’s CE requirements as to the frequency and number of units you must earn to keep your license updated.
Some states allow exemptions for certain experienced professionals from the insurance consultant licensing requirement. A section of the state licensing handbook of the National Association of Insurance Commissioners (NAIC) provides details.
These exemptions are afforded to individuals who are already acting in their professional capacity or in the normal course of business. Common exemptions include:
The most crucial duties of an insurance consultant can include:
An insurance consultant typically stays involved in a company’s plan throughout the year. Along with administrative tasks, onboarding and billing reconciliation, consultants can give companies advice to control costs, manage risks, and process complex claims. A consultant is particularly helpful for businesses seeking specialized insurance expertise or services.
Insurance consultants can provide services that go beyond merely advising on the best insurance coverage for companies. Depending on their expertise, their other services and skills may include:
The average annual pay for an insurance consultant in the US is approximately $63,852 a year.
That works out to around $30.70 an hour, or $1,227 a week, or $5,321 every month.
Insurance consultant salaries as of February 9, 2025
|
90th percentile |
$114,000 |
|---|---|
|
75th percentile |
$63,000 |
|
25th percentile |
$49,000 |
Source: ziprecruiter
Insurance consultants can be paid regular salaries. These are paid to them either by the insurance company that contracts them to service clients or as direct hires by client organizations themselves.
Consultants can also work as independent, self-employed contractors who charge businesses fees, a percentage of the policies or benefits packages they recommend, or a mix of both.
An insurance consultant’s salary depends on several factors, including:
Is the consultant salary better than, say, the salary of an insurance agent? You can check out our guide on insurance agent salaries and draw your own conclusions.
Business owners and HR people may wonder whether they need an insurance broker or an insurance consultant for their insurance and/or benefits needs.
Knowing the difference between these industry professionals can be helpful when marketing your services.
A broker’s primary focus is to help clients buy and renew benefits and insurance products. They may offer additional services like enrollment assistance and administrative work, but their scope of services is more limited.
An insurance consultant performs some of the functions of a broker but can provide additional services. They can do tasks associated with benefits procurement and enrollment but can also manage a company’s collective benefits package. With these services, consultants can improve a company’s overall human resources strategy and other business objectives.
If you choose the career path of insurance consultant, you can offer continuing support and expertise into how a business operates and how its benefits plan, finance, and HR impact operations. The value you can provide businesses makes you an attractive option to traditional insurance agents and brokers.
Apart from helping with administrative tasks, consultants are skilled in exploring options aside from policy costs to improve a company’s financial and operational conditions. To become an insurance consultant that businesses would want to hire, be sure to gain enough experience and develop the necessary skills.
To maximize earnings as a consultant, you may want to look at emerging markets like cybersecurity insurance or get the qualifications for becoming an expert in high-value, niche insurance markets. While the insurance consultant career path is not necessarily linear, it can pay off dividends and make for a unique and fulfilling job.
Did you find this guide about insurance consultants useful? Let us know your thoughts in the comments.
