What Licenses You Need to Sell Variable Annuities

The licenses required to sell variable annuities

To sell variable annuities, you need two separate licenses: a Series 7 (General Securities Representative License) or Series 65 (Uniform Investment Adviser Law Exam), plus a state insurance license for annuities. The Series 7 is the most common path because it covers securities sales, and variable annuities are classified as securities. Your employer — typically a brokerage firm or insurance company — registers you with the Financial Industry Regulatory Authority (FINRA) after you pass the exam.

The state insurance license is separate and required by every state. It covers the insurance component of the annuity contract itself. You explore directly to your state's insurance department, pass a state-specific exam, and renew it periodically (usually every one to three years, depending on the state).

If you work as an investment adviser rather than a broker-dealer representative, you may use the Series 65 instead of the Series 7, but you still need the state insurance license. Some firms require both the Series 7 and Series 65 depending on how they structure your role.

Key Takeaways

• Variable annuities require both a FINRA securities license (Series 7 or Series 65) and a state insurance license to sell legally.
• The Series 7 is the standard license for variable annuity sales at most brokerage firms and covers the securities portion of the contract.
• Your state insurance license is issued by your state's insurance department and covers the insurance features of the annuity.
• Your employer registers you with FINRA after you pass the Series 7 or Series 65; you must pass the state insurance exam separately.
• Continuing education requirements vary by state and by FINRA rules, typically requiring 12 to 30 hours per year depending on your licenses.

The Series 7 license and how it applies to variable annuities

The Series 7 is administered by FINRA and covers the sale of all securities, including variable annuities. The exam has 250 questions and tests your knowledge of securities law, trading rules, customer protection, and product features. Most people study for four to eight weeks before taking it.

Variable annuities fall under securities regulation because the investment returns depend on the performance of underlying mutual funds or separate accounts — not on a fixed insurance may provide. This is why the Series 7 is required: you are selling an investment product, not just an insurance contract. Your employer must sponsor you and file your registration with FINRA before you can sit for the exam.

Once you pass the Series 7, you are registered as a General Securities Representative. This license does not expire, but you must maintain your registration by staying employed at a FINRA-member firm and meeting continuing education requirements.

State insurance licenses for annuity sales

Every state requires a separate insurance license to sell annuities, even if you hold a Series 7. This license is issued by your state's Department of Insurance (or equivalent agency) and covers the insurance aspects of the contract — the death benefit, the annuity payout options, and the insurance company's obligations.

To get a state insurance license, you typically study a state-specific exam manual, pass a written test administered by your state, and pay a licensing fee. The exam usually covers state insurance law, annuity regulations, and consumer protection rules. Fees range from $50 to $300 depending on the state, and licenses must be renewed every one to three years.

Some states allow you to take the exam online; others require you to test at a physical location. Your employer or a third-party testing company can tell you where and when exams are offered in your state. You do not need to pass the Series 7 before taking the state insurance exam — you can do them in either order, though most firms have you complete the Series 7 first.

The Series 65 as an alternative to the Series 7

If you work as an investment adviser representative rather than a broker-dealer representative, you may be able to use the Series 65 (Uniform Investment Adviser Law Exam) instead of the Series 7. The Series 65 covers investment advisory law and fiduciary duties and is administered by FINRA and state regulators.

The Series 65 is less common for variable annuity sales because most variable annuities are sold through broker-dealers, not investment advisers. However, some advisory firms do sell variable annuities, and in those cases the Series 65 may be sufficient. You still need the state insurance license regardless of whether you hold a Series 65 or Series 7.

The Series 65 exam has 130 questions and typically requires four to six weeks of study. Like the Series 7, it does not expire as long as you maintain your registration with a state or FINRA-member firm.

Continuing education and license maintenance

After you are licensed, you must complete continuing education (CE) to keep your licenses active. FINRA requires 30 hours of continuing education every three years for Series 7 holders, with at least 10 hours in the first year and at least 2 hours in ethics every three years. Your state insurance license has separate CE requirements, usually 12 to 30 hours per year depending on the state.

Many states allow you to combine certain courses toward both your FINRA and state insurance CE requirements, so check with your employer or your state insurance department about which courses count toward both. Some states also require specific courses on annuity suitability or consumer protection.

If you let either license lapse, you cannot legally sell variable annuities until you renew it. Renewal is usually straightforward — you pay a fee, complete the required CE hours, and submit a renewal form to FINRA or your state — but the process can take several weeks, so most firms track renewal dates closely.

Suitability and supervision requirements

Having a license means you can sell variable annuities, but it does not mean you can sell them to anyone. FINRA rules require that you recommend variable annuities only when they are suitable for the customer's financial situation, investment goals, and time horizon. Your firm's compliance department reviews your sales to make sure you are following these rules.

Variable annuities are complex products with high fees, surrender charges, and tax consequences. Regulators and your firm expect you to understand these features and explain them clearly to customers. If you recommend a variable annuity to someone who would be better served by a simpler product, you and your firm can face fines or disciplinary action.

Your firm is also required to supervise your sales and maintain records of your recommendations. A supervisor with a Series 24 license (may have access to Principal) typically oversees your work and signs off on customer accounts.

Getting started: the path to licensure

If you are new to the industry, the typical path is: (1) find a job at a brokerage firm or insurance company that will sponsor you, (2) register with FINRA and your firm, (3) study for and pass the Series 7, (4) study for and pass your state insurance exam, (5) receive your licenses and begin selling under supervision.

Your employer will guide you through steps 1 through 4. They will provide study materials, tell you when you can sit for the exams, and handle the registration paperwork. Most firms give you a few weeks to pass both exams after you are hired. Once you pass, you are registered and can begin selling variable annuities.

If you already hold a Series 7 and move to a new firm, you do not need to retake the exam — your registration transfers. However, you may need to renew your state insurance license if it has expired, and you will need to complete any firm-specific training your new employer requires.

Frequently Asked Questions

Can I sell variable annuities with only a state insurance license?

No. A state insurance license alone is not enough because variable annuities are securities. You must hold either a Series 7 or Series 65 from FINRA in addition to your state insurance license. The insurance license covers the annuity contract itself, but the securities license covers the investment component.

Do I need a Series 7 if I already have a Series 65?

Not necessarily. If you work as an investment adviser and hold a Series 65, you may be able to sell variable annuities without a Series 7. However, most variable annuity sales occur through broker-dealers, which require the Series 7. Check with your employer about which license they require for your role.

How long does it take to get licensed to sell variable annuities?

Most people pass both the Series 7 and state insurance exam within two to three months of starting their job. The Series 7 typically takes four to eight weeks of study, and the state insurance exam takes one to three weeks. Your employer will tell you the timeline they expect.

What happens if my license expires?

If your Series 7 registration lapses, you cannot sell securities until you renew it. If your state insurance license expires, you cannot sell annuities. Renewal is usually straightforward — pay the fee, complete CE hours, and submit the form — but it can take several weeks, so most firms renew licenses well before they expire.

Do I need additional licenses to sell other insurance products?

It depends on the product. Life insurance requires a state insurance license but not a FINRA securities license. Fixed annuities require a state insurance license but not a FINRA license (because they are not securities). Variable annuities are the only annuity type that requires both a securities license and an insurance license.