How Hard Is The Insurance Licensing Exam
If you are ready to begin your path as an insurance agent, your first major milestone will be to pass your state’s insurance exam. While the specific content on the exam is unique to each state, there are a lot of common elements that are tested, such as the types of insurance and how to develop and recommend a plan to new clients.
As you prepare for this critical step in the insurance licensing process, you may wonder just how difficult it is to pass the state exam. Fortunately, with some preparation, you will be able to demonstrate your knowledge of the insurance career path and pass the exam.
Is It Hard to Pass the Insurance License Test?
The state insurance license exam covers a lot of information: types of policies; policy riders, provisions, options, and exclusions; completing the application, underwriting, and delivering the policies; and taxes, retirement, and other insurance concepts. Preparation is the key to passing the insurance licensing exam.
Passing the Insurance License Exam
You will need a scaled score of at least 70 to pass the insurance licensing exam. Each state considers the difficulty of the test’s questions, accounting for differences in version by equating and scaling raw scores.
- Equating: If one version of the state exam is determined to be more difficult than another, the more difficult version will require fewer correct questions to demonstrate the same level of knowledge.
- Scaling: The raw scores are then placed on a common scale to assign a value. Earning a passing score of 70 means that you have met the minimum required knowledge, not that you answered 70 questions correctly or answered 70% of the questions correctly.
After you take the insurance licensing exam at one of the independent testing centers in your state, you will receive a PASS or FAIL designation immediately at your testing station. You will only receive a numeric score if you fail the exam. This can help you know where to focus your studying before registering to retake the test.
Each state controls its own insurance licensing process and not all states report pass rates for their exams. Of the states that do provide that data, the overall pass rate for all insurance exams is 60%. The best way to be part of this majority is to take a study course and prepare.
Data is collected by the National Association of Insurance Commissioners (NAIC) on seven different types of exams. The pass rates for the various exams are:
- Life Insurance: 62.9%
- Health Insurance: 60.4%
- Life & Health Insurance: 64.8%
- Property Insurance: 53.6%
- Casualty Insurance: 62%
- Property & Casualty Insurance: 54.9%
- Personal Lines: 61.4%
How Much Time Do People Spend Preparing?
Many states require a pre-licensing education course, which can take between 20 and 40 hours to complete. It is best to space out your education modules, allowing time to master the material and take practice tests.
You should give yourself one month to prepare for the insurance licensing exam. Some may require more time, and some less. This ensures that you have time to study the material, take practice tests, and review any areas that you find you need to study again.
Try to register for the insurance licensing exam test date within one week after completing your pre-licensing education course to have the information fresh in your mind.
How Do I Pass the Insurance License Exam?
Passing the insurance licensing exam begins with careful preparation. Even if your state does not require a pre-license education course, completing a class is the best way to learn and master the knowledge you need to know for the test. Find out what requirements your state has to register for and pass the insurance license exam to make sure that you are ready.
Insurance Pre-License Education Course
Because the insurance license exam is state-specific, it is important to register for a pre-license education course that covers the material tested in your state. Test prep companies will ask what state you plan to test in as part of your course registration.
Course options can range from the basic self-directed study (print or online materials, practice tests, self-paced units) to live online or in-person classrooms (cohort of test-takers, online modules, practice tests, live interaction with instructors). Consider your learning style and other commitments to decide which type of insurance exam prep course is the best fit for you.
After you are licensed, you will need to complete annual continuing education as well. The test preparation company that you used for your pre-license education course may offer links or discounts to continuing education courses as well.
Insurance Exam Study Tips
Having the required knowledge of the insurance industry is important to pass the insurance license exam on your journey to becoming a licensed insurance agent, but so is knowing some basic test-taking and study strategies.
Practice, Practice, Practice! The insurance license exam is a computer-based test. If you are unfamiliar with this format, taking a practice test can alleviate any worry that you may have before test day. While you will have thirty minutes to go through a tutorial at the testing center, you will likely be anxious to begin the test. The more familiar you are with taking a test on the computer, the better you will feel as you begin your exam. Taking an insurance license exam practice test can also help you gauge your knowledge as you study and prepare.
Find out what you need to know about your insurance exam. Your state’s content outline is a great resource that provides a detailed outline of everything that is testable on your state’s insurance license exam. If you are comfortable with all of the information, you are ready for the test. A pre-license education course from a reputable test preparation company will cover everything you need to know about your state’s insurance process.
Insurance exam schedule. Preparing for the insurance licensing exam requires hours of study and practice. If you already have a lot of other commitments, prioritize your test preparation by reserving time each day to study. This can be early in the morning, during your lunch break, or in the evening. Just make sure that you create a study schedule and stick to it.
Schedule a practice test every week. Having these short deadlines will help keep you motivated. To make the most of your mock exam, treat it just like the real thing by turning off your personal electronics, setting a timer, and keeping your study materials closed.
What Is the State Insurance Exam?
The exact exam that you register for will depend on two main factors: your state and the type of insurance you want to sell. Once you determine the kind of career path that you want to have, you can start to work toward becoming a life insurance agent in that field.
Property and Casualty Insurance Exam
This type of insurance covers personal and commercial items and injury. Licensees can work within a specific niche, such as auto insurance, or work with clients to develop insurance policies for a variety of situations and coverage. Common property and casualty insurance products include:
- Personal or commercial auto insurance.
- Homeowner’s insurance
- Commercial property insurance
- Personal flood or earthquake insurance
- Worker’s compensation insurance
- Personal umbrella liability insurance
- Commercial liability insurance
Within property insurance, there are additional specific types of coverage that can apply, depending on the type of property insured.
Life and Health Insurance Exam
Passing the life and health insurance exam will license you to sell and market life and health insurance products. Many states offer these lines separately or as a combined exam. You will need to decide if you want to become a life insurance agent, health insurance agent, or both. Because many clients are interested in obtaining life and health insurance coverage at the same time, it can be helpful to your eventual business to be able to handle both types of policies.
FINRA Securities License Exams
After you pass your insurance license exam, you may also benefit from pursuing your securities licenses. This process is similar, but most securities exams require that you are sponsored by a firm, company, or organization before taking the test. You can take the Securities Industry Essentials exam (SIE) without sponsorship. This credential is a great way to set yourself apart from other applicants when applying for a job but does not license you to market securities by itself. Once you have sponsorship, you can get your Series 6 or Series 7 licenses, as well as the Series 63, Series 65, or Series 66 state licenses as required for your role.
How Hard Is the Insurance Licensing Exam?
The state insurance license exam covers a lot of information, but with good test preparation from a top pre-licensing education course, you will be ready to join those who have successfully passed the test. We can’t wait to see you earn the important designation as a licensed insurance agent on your professional journey.
Information on this page has been gathered by a multitude of sources and was most recently updated on August 2020.
Any Information on this site is not guaranteed or warranted to be correct, accurate, or up to date. StateRequirement and its members and affiliates are not responsible for any losses, monetary or otherwise. StateRequirement is not affiliated with any state, government, or licensing body. For more information, please contact your state's authority on insurance.
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