How to pass insurance exam

When you’re considering a career as a life insurance agent, the prospect of an exam may feel daunting. (After all, didn’t you finish those for good after you took your last college final?) As someone who works in the field, I can say that, with the right preparation, passing the exam isn’t as hard as it may seem—and it leads to a fulfilling career that’s well worth the effort. In this article, we’ll sort through some key information and study tips so you know beyond a doubt how to pass the life insurance exam, and feel confident going in.

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How To Pass The Life Insurance Exam

First, it’s important to understand what you’ll get out of this test: If you pass, you’ll get your resident license to sell life and/or health insurance, which means you can practice within your state of residence. However, once you gain this resident license within your home state, you have the ability to pay for a non-resident license in any other state via the National Insurance Producer Registry—without taking the licensure exam again! The fee varies by state for a non-resident license, and usually needs to be renewed every two years; you can learn more about rules and fees here.

Before taking the test, find out the rules, regulations, and fee expectations for your state. Some states allow you to take the life insurance exam on its own, which usually takes 20 hours of studying and/or pre-licensing education (more on this education later—your state may or may not require it as a prerequisite to taking the actual exam). However, some states or agencies require you combine your life insurance exam with another license class to maximize the areas in which you can negotiate policies. Some of these license classes may include:

• Accident and Health Agent
• Public Insurance Adjuster
• Automobile Insurance Agent
• Bail Agent
• Cargo Shippers’ Agent
• Casualty Broker-Agent
• Credit Insurance Agent
• Life and Disability Insurance Analyst
• Life—Limited to the Payment of Funeral and Burial Expenses
• Life-Only Agent
• Portable Electronics Insurance Agent
• Property and Casualty Broker-Agent
• Property Broker-Agent
• Rental Car Agent Licensing
• Self-Service Storage Agent
• Stock Agent
• Travel Insurance Agent (Limited Lines)

There are single exams available that combine multiple categories above. They’re longer and take longer to study for. Generally, if you see the word “and” in the exam category, plan on dedicating double the studying time to gaining that combo license—40 hours or more.

The Test Basics

The life insurance test is a timed, proctored exam with anywhere from 75 to 150 multiple-choice questions. You can take the test in person on a computer or (sometimes) from the comfort of your own home. There are four potential answers to each question, and similar to other standardized tests, you can skip questions or mark them for review at the end of the test.

Your state will have specific requirements, but in general, to pass, you need to achieve a score of 70%.

When the test is taken in person, you’re required to put away all personal items and empty your pockets; you’re allowed only a pencil and paper, a calculator, and possibly noise-canceling headphones (depending on the testing center).

Time and fees for the exam vary by state, but most life-only insurance exam locations allow you two hours and 30 minutes to complete the test. It will cost between $40 and $150 for one test.

Keep your spirits high if you don’t pass your first exam! Exam questions can be tricky, and you may feel anxious. But many—if not most—potential agents who fail the first time pass the exam on their second or third try. (Often you get 10 or more attempts.) The key is to keep trying and stay confident.

Tools To Help You Pass

There are multiple online pre-licensing educational courses that you can take for a fee to help prepare you for this exam. Some states require you to take them before you schedule an exam—but even if your state doesn’t require one of these courses, we strongly recommend you try one. They offer comprehensive reading- and quiz-based materials that take you through the essential exam topics.

To help you pass your life insurance test, check out some of the following courses:

• ExamFX Life Prelicensing
• Kaplan Licensing Prep

Free materials exist, so if you prefer to not spend any more on your prep and your state doesn’t require a paid course, feel free to make use of those resources. These include:

Study Tips

The following study strategies will help you make the most of your shot at a life insurance license.

• Study smarter, not longer. Don’t stretch your studying out over too much time. We suggest you study hard for a matter of weeks or days, not months.
• Take mock exams. Many paid study courses offer practice exams that are exactly like the real ones. Take these again and again, and try to achieve a score of 85% or above consistently. Taking a practice test repeatedly is key to passing the life insurance test.
• Focus on weaknesses. Always pay special attention to the questions you get wrong in study quizzes and mock exams. Redouble your efforts to study these topics.
• Study the glossary of terms. Know your life insurance terms inside and out. On exam day, you may even want to bring a printout of the glossary with you to re-read right before testing so the terms are fresh in your mind.
• Be prepared for curveballs. Exam makers usually test about five new questions on each exam—those five questions won’t count toward your score. Study well, but know that you may encounter tricky and unexpected questions.

Exam Day

Here are three tips for a smooth test-taking process:

• Get a good night's sleep ahead of your exam and have a good breakfast or lunch ahead of your exam.
• Don’t start the exam immediately. This is proven to increase your anxiety and make you forget more of what you studied. Instead, sit quietly for a minute or two and gather your thoughts. Don’t worry about the time at this stage—you’ll gain back far more time by letting your brain relax.
• Move through questions slowly and confidently, taking a stab at every question. Try not to use the skip button. Remember: these are multiple choice questions, so even eliminating one silly answer increases your chances of guessing correctly from 25% to 33%. You can always “mark for review” any answers you want to take a second look at once you’ve made it to the end.
• Trust your gut. Slow down, break down phrases, and copy any confusing wording to your note taking paper, underlining keywords. Ask yourself, “If I was an insurance agency, business owner, or the government, would I allow this?” Change your perspective for a tough question just a bit and let the answer come to you.
• Prepare the day of. Don’t arrive at the exam rushed or confused. Know where you’re going and arrive one to two hours early.

After you pass the life insurance test, in most states, you’re ready to begin your career. That means you’ll have a whole new set of things to learn, including how to grow your business by generating leads.

For more resources on how to improve your skills and get the best out of your newly-minted life insurance license, check out more of the EverQuote Pro blog.

If you're interested in starting a career in life and health insurance sales, there are a few hurdles you'll have to clear first. The requirements to sell life and health insurance vary by state, but all include the need to earn an insurance license. Research, commitment, and hard work are necessary to earn a license selling life and health insurance, but it's not terribly difficult to do it when you know how to prepare.

Before you go seek out your health insurance license, it is critical to understand exam requirements, how to keep your license active, and tips to help you pass on the first try. Becoming a licensed life and health insurance agent is within reach; just follow these guidelines to meet your goal.

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Exam Requirements for Selling Life and Health Insurance

Registration for life and health insurance exams is state-specific. So, step one in understanding exam requirements is to research your particular state. Start by seeking out the department of insurance within any state where you plan on selling insurance.

The life and health insurance exam are one of the many different topics each state department of insurance will offer. The specific exam will test your knowledge of both types of insurance. Passing the exam, as well as meeting other requirements, will enable you to earn your license and begin selling policies. Other requirements to earn a life and health insurance license include:

• Being 18 years of age or older
• Holding a high school diploma or equivalent
• Completed pre-licensing education hours, if applicable for your state

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Content of life and health insurance exams

It's important to understand the content of life and health insurance exams before you sit for the actual test. The more you know the exam content, the easier it will be to prepare and ace the test. Life and health insurance exams will test your knowledge in a variety of topics, including a general understanding of both types of insurance. In addition, specific topics you can expect on life and health insurance exams include:

• Details of life and health insurance policies
• Annuities
• Tax issues relating to life insurance, annuities, and health insurance
• Disability income
• Health Maintenance Organizations (HMOs)
• Policy riders impacting life insurance coverage
• Medical plans, including dental policies
• Individual insurance for special needs

Each state will present its unique state exam outline. Print this out and use it as your study guide so you can get a handle on the content that you'll need to review.

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How To Pass Your Insurance Exams on the First Try

Now that you understand what is necessary to earn and keep a life and health insurance license, how do you go about tackling the exam? The goal for anyone taking a life and health insurance license exam is to pass it on the first try, but that doesn't always happen. Individuals that fail to pass it on the first try likely did not prepare well or gain a thorough understanding of what was ahead of them on the exam. Let's look at the format of the exam, as well as some tips and tricks on how to prepare successfully.

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Format of the life and health insurance exam

The great thing about each state's life and health insurance exam is you can choose a date and time. Scheduling options will be dependent on the state’s department of insurance.

All testing takes place on a computer, but you won't need any specialized computer skills to pass the exam. Once you settle in for the test, you can expect between 100 to 150 multiple-choice questions. Again, the questions will depend on your particular state. Tests that combine life and health insurance tend to run a bit longer.

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Passing score and passing rate

To pass each state life and health insurance exam, you need to earn a score of 70% or higher. A score of 70 is as good as a perfect score of 100 when it comes to earning a license. If you score below a 70, though, you'll need to take the exam again. 

The passing rate will vary depending on the test you take and the state you are within. The National Association of Insurance Commissioners (NAIC) publishes data on pass rates by exam and by state. Generally speaking, the pass rate for life and health insurance exams hovers around 60% to 70%. 

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The study recipe for success

The best method is to be formulaic in your approach to studying for the life and health insurance exam. Most agents will not succeed if they just read a book, only work on questions, or try to cram all information in at the end. Instead, be much more deliberate in your approach. 

The best approach to passing your life and health insurance license exam on the first try is to study, practice questions, evaluate, and repeat.

• Study: There are many different ways you can study and prepare yourself for each state life and health insurance exam. Prep courses are available, as well as a series of study books that come complete with practice questions. Whatever method you go with, be sure to read and consume as much information as possible.
• Practice questions: With new knowledge, it is time to see how you apply it to the questions on the exam. Practice question banks will be available through prep courses, as well as with study guides for each state’s exam. Taking practice questions based on each exam topic can help you see how well you're retaining information.
• Evaluate: Are there specific areas of the life and health insurance exam topics where you are strong? Are there areas where you're still weak? Evaluate the results of your studying and practice questions to determine where you need to further hone your skills and knowledge.

• Repeat: Now that you know your weak areas, focus on them with additional studying and further practice questions until you see improvement.

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Decide on a target date and complete a practice exam

Decide on a target date for your exam. The flexibility that states offer allows you to set a date and prepare it in a way that works for you. Most individuals will take between 35 to 40 hours to fully prepare for their exam. The length of time you need to prepare will depend on how many hours each day you can commit. It's possible to schedule the exam two weeks out and get yourself ready if you can commit the study hours. If you're working a full-time job and have other commitments, though, you may need more time.

When you decide on your target date, strive to take a practice exam or two before the test date. Attempt to simulate the testing environment as much as possible, putting yourself in the mindset of how it will be on test day. Taking practice tests will also enable you to gain confidence and address any lingering problem areas.

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How Often Do You Need to Renew Your License?

When you earn a life and health insurance license, it doesn't mean you're certified to sell insurance forever. You'll need to keep up with licensing and renewal requirements. When you earn your initial license, it will have an expiration date. Generally speaking, an insurance license will need renewal every three years. In order to continue as an agent without interruption, you must be sure to renew your license before it expires.

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What are the steps to renew your license?

The process for renewing your life and health insurance license is simple, as long as you renew it before it expires. Once it expires, the process can get more complicated.

In many cases, states will require you to complete continuing education hours before you can renew your life and health insurance license. You can usually meet this continuing education requirement through traditional training or professional development courses that will keep you updated on changes in the industry.

When you have your documentation ready, you need to send it in with your renewal application. Each state will have applications that you can complete by paper or online. When you apply, you'll also need to include the renewal fee for your license.

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Pursue Your License Today

It takes hard work and discipline to pass the state life and health insurance exams and launch your career as an insurance agent. But anyone can do it with the right preparation and focus, along with a little practice. Before you embark on your life and health insurance journey, be sure you know what's required so you can set yourself up for success. 

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This article reflects the features of Nectar as of the date of publication. Features are subject to change at any time. This article is meant for informational purposes only, it is not a guarantee that using Nectar will help you achieve specific business or financial results and is not intended to serve as the sole recommendation for any business financial decisions.