“What Should Be My Criteria For Picking States In Which To Get Licensed?”

Q: I’m thinking of expanding my offering to other states. What should be my criteria for picking states in which to get licensed?

A: As with other investments, you need to consider which states offer the best use of your time and money. For starters, I recommend that you don’t automatically limit yourself to just the states that neighbor your home state.

The Internet and modern telecommunications allow you to serve every health insurance client in America just as easily as one living down the street. As agents realize they can quickly expand their health insurance business to almost any state, they’re faced with the question of which states they should pick.

Being licensed in a neighboring state does make sense if you live in a border town or multi-state metropolis, such as St. Louis, Kansas City, Philadelphia or Cincinnati. But if you’re not located along the state border or are already licensed in the neighboring state, I recommend that you keep your options open.

What’s your specialty?
Have you made a specific carrier or plan type your specialty? In that case, you’ll want to consider which states that carrier is also licensed in or what plan type makes sense.

For example, if you’re a big fan of Anthem Blue Cross Blue Shield, you’ll need to choose from a list of 11 states: Indiana, Kentucky, Missouri, Ohio, Wisconsin, Colorado, Nevada, Connecticut, Maine, New Hampshire and Virginia.

And if you’re targeting seniors, you’ll need to consider the decades-long trend of seniors migrating to the Sunbelt.

It’s a numbers game
Each additional state license is an investment of time and money. To get the most bang for your buck, I suggest choosing the states with larger populations. More importantly, you should probably favor states with greater demand for health insurance, especially the plans you offer.

This is not a knock on smaller states. But the truth is that smaller states mean more competition for fewer people. You’ll typically find the flow of new leads to be minimal or tight in less populous states.

For your first expansion steps, states with bigger populations offer more potential customers and leads.

Licensing requirements
You also need to consider the licensing requirements of your target states. One way to whittle down your list of potential states is to eliminate those with more stringent and costly licensing requirements.

The good news is that getting licensed in other states is a lot easier today. The National Insurance Producer Registry (www.nipr.com) provides detailed information for the licensing requirements of all states. It also lets any licensed insurance agent register online for non-resident licensing in almost every other state in the country.

Get ready
Finally, make sure that you have the right tools at the ready before you expand your business to these other states. An effective website with a powerful quote engine is a must for taking advantage of the increasingly borderless health insurance market.

But you’ll also need to find a trustworthy health insurance lead provider, who can provide you with a steady stream of qualified prospects from your newly licensed state.