How to Pass the Life Insurance Exam

By: Kaplan Financial Education
July 9, 2020
Woman preparing for the life insurance exam

To sell life insurance, there are several paths you can take, but all of them include passing at least one exam. You can earn a life insurance license, which, depending on the state you want to work, can be either be held separately from a health insurance license or together. If you want to sell certain forms of life insurance as part of selling securities, you’ll need to pass exams from FINRA and NASAA that include other types of investments.

This article shows you the steps to passing the life insurance exam and earning your license.

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Step 1: Learn Your State’s Requirements and Get the Exam Outline

Each state has different requirements and different types of exams. So, the first thing you should do is check with the department of insurance in your state (or the state where you’ll be working) for the requirements. For example, some states require their licensing candidates to complete prelicensing education before they take the exam. So, before you sign up for the exam, you’ll want to make sure you’ve fulfilled that requirement. You should also verify whether you need a sponsor to take an exam—some states won’t let you take the exam without one. And, finally, be sure to print the exam outline for your state.

Step 2: Schedule Your Exam

You can choose the date and time of your exam in most states. Scheduling options are usually on the respective state’s department of insurance website. To give yourself time to study, schedule your exam at least two weeks in advance. The cost to take the exam varies from state to state, but expect it to range from $40 to $150.

Step 3: Have a Study Plan to Pass the Life Insurance Exam

You’ll need to devote about 35 to 40 hours of studying if you expect to pass. Cramming is not recommended. Instead, plan to study for the exam over the course of several weeks. Have a realistic plan that’s easy for you to stick to, dividing your study time into study sessions that give you plenty of time to absorb material. Setting up a study calendar can help you follow your plan. A insurance certification study package can help you stay on track so you don't cram at the last minute.

Step 4: Follow the State Exam Outline

The state outline for the exam has a list of the topics that will be covered and how they are weighted. These are the life insurance topics you are most likely to be tested on:

  • Life insurance general knowledge
  • Life insurance policies
  • Policy riders and options in life insurance coverage
  • Life insurance tax issues
  • Annuities
  • Annuity policy tax issues

If you are taking a combined exam, there will be health insurance topics as well. The exam outline also tells you the number of questions included in each section of the exam. You should concentrate on the sections with the most questions and the topics with the most weights so that you master what’s most important first. You have a better chance of success if you follow that plan.

Step 5: Prepare and Practice

Taking an exam preparation review course can increase your chances of passing. You can choose between live classes, online courses, or printed books for self-study. You should also take practice exams. These will help you determine how well you have absorbed the material and what still needs your attention. A mock or practice exam that mimics test conditions enables you to judge whether your pacing is right for finishing the exam in the allotted time.

Step 6: Know the Exam Center Process

Often what trips students up is not knowing what to expect on exam day, even if they are otherwise prepared. Try visiting the test center before the exam—see how long it takes to get there and get a feel for the testing area. Find out what forms of identification are needed to take the exam so you can have them ready on exam day; each state has its own requirements. On the day of the exam, try to arrive at least 30 minutes early. You should expect to put all of your belongings in a locker before you get assigned to a testing cubicle. When you get to your assigned test spot, an employee will explain the expected conduct to you.

Step 7: Stay Calm and Take the Exam

Here are some tips for how to handle questions on the exam:

  • Read each question carefully and thoroughly before answering it. Most questions will have a lot of detail and qualifying information in them. Try to focus only on the information in the question and avoid making assumptions just to fill in the blanks.
  • Find the questions you know the answer to and answer them first. If you find yourself stuck, move on and come back to it later.
  • Don’t leave any questions blank. Guessing the answer still gives you a 25% chance of getting it right. And, If you can eliminate any of the multiple-choice options that you know to be incorrect, you will have any even better chance at guessing the correct answer.

Once you complete the exam, you will get the results. If you pass, you will receive instructions on how to apply for your license with the state. You may have to wait a few days for the testing center to report that you passed before you can apply for your license. If you fail, you will get a diagnostic report so you know what areas to focus on the next time.

Ready to Pass to Your Life Insurance Exam?

Although pass rates are about 70% in most states, the life insurance licensing exam is still no walk in the park. You can Increase your odds of passing the life insurance exam by following these steps. And to give you even more of an advantage, try an insurance licensing exam prep package.

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