Getting your life and health insurance license is required to become a life or health insurance agent. This growing field provides opportunities to build a rewarding career helping clients and their families prepare financially for accidents, illness, and death. One of the most important steps to becoming a life and health insurance agent is passing your state’s insurance licensing exam.
All insurance licenses are state-specific. Some states test for life insurance and health insurance licenses separately, while others offer a combined exam. Learning your state’s requirements is critical to understanding your individual path to becoming a licensed insurance agent.
What is on the Life and Health Insurance License Exam?
The information covered in the life and health insurance exam varies by state. Taking a licensing exam is often the first major milestone on the journey to become an insurance agent. A life and health insurance license is one of the most popular, given the demand for specialists in this type of insurance.
Testable areas of all insurance exams include the benefits of insurance, how to work with clients, and state and federal regulations. There are also specific policies, provisions, and regulations that pertain to individual lines of insurance that are tested on the life or health insurance exam.
Life Insurance Exam Topics
- Types of individual life insurance (term, whole life, endowment, premium variations, etc.)
- Annuities (function, features, determination of benefits, etc.)
- Policy provisions, options, and other features (insuring agreement, loans against a policy, premium payments, etc.)
- Group contracts and underwriting
- Tax qualified retirement plans (IRAs, 401ks, tax-sheltered annuities, etc.)
- Legal and tax implications of life insurance premiums, benefits, and withdrawals
Health Insurance Exam Topics
- Disability insurance policies (total, partial, residual, etc.)
- Basic medical expense insurance policies (hospitalization and care covered, common exclusions)
- Major medical insurance policies (covered charges, deductible, percentage participation, common exclusions)
- Managed care (HMOs, PPOs, etc.)
- Accident and health insurance provisions (claim forms, time of claims, change of occupation, pre existing conditions, policy continuation, etc.)
- Group health insurance
- Social security disability
- Legal and tax implications of health insurance premiums, benefits, and withdrawals
Each state also includes questions about regulations that licensed insurance agents must follow. These often include laws related to insurance contracts, definitions of terms, the regulatory authority in the state (Commissioner of Insurance or Department of Insurance), general regulations, licensing requirements, and continuing education.
Find out if your state offers a combined life and health insurance exam. You may be able to offer more services to your clients, while saving on multiple exam fees, with a joint life and health insurance license.
How to Study for the Life and Health Insurance Exam
Many states require test-takers to complete an authorized pre-licensing education course. Even if it is not a required part of your insurance license process, a pre-licensing education course is the best way to prepare for the life and health insurance exam.
For life insurance pre-license education courses and exam prep, StateRequirement recommends:
Pre-license education requirements are typically around 20 hours for the life insurance exam, 20 hours for the health insurance exam, and 40 hours for a combined exam, but can vary depending on your state.
You can choose between an in-person course, workbook, self-guided online course, or facilitated online course. Consider your other commitments and style of learning to determine the best fit for you.
Insurance Pre-Licensing Course Information
Your pre-license education course will go over the testable information outlined by your state’s insurance authority on the insurance exam content outline. Some states offer life and health insurance within one exam and license, while others do not. For example, in North Carolina, life and health insurance exams are separate.
State-approved pre-license education courses are required to cover the ins and outs of the insurance licensing exam during the course.
Exam Reservation and Admissions Ticket: Your course facilitator or workbook will cover the process to scheduling your exam and getting your admissions ticket. Some states require that your Exam Admissions Ticket is signed by your instructor before being able to schedule your test.
Testing Center Policies: These policies include late arrival, refunds, exam cancellation, using a testing center payment voucher, accommodations offered in accordance with the Americans with Disabilities Act, and English as a Second Language (ESL) accommodations. The course will review all of these policies and be able to answer related questions.
Prohibited Items: If you are worried about what you can and cannot bring to your exam, the pre-licensing education course is a great resource. You will also learn how to request accommodations for required medications or assistive technology. Items prohibited from the testing room include:
- Personal electronic devices
- Study materials and notes
- Bulky sweatshirts, jackets, and coats
- Food and drinks
- Bags, including purses
- Firearms and weapons
You may be able to store some personal items, such as a wallet or car keys, in a provided locker. Your pre-licensing education facilitator will be able to go over what you should bring to the test center and what is best left at home.
State Content Outline: The course provider will use the state’s exam content outline to develop their course and is required to provide each student with a copy of the outline. You can also access it on your state’s Department of Insurance website.
Screening Questions: Part of your life and health insurance license application includes screening questions. Many of these are YES or NO questions about your legal and employment history. Your instructor or workbook will include information about how to accurately complete this section of your application.
Life and Health Insurance Exam Study Tips
There is a lot of information covered in the life and health insurance licensing exam. It helps to break down your efforts into manageable chunks, with practice questions interspersed throughout your studying. A pre-licensing education course will do this for you by providing study modules online or through a workbook.
Take a Practice Test
The importance of practice tests for the life and health insurance license exam cannot be overstated. Your pre-licensing education course will include periodic practice exams, as well as stand-alone exam-style practice questions. Practice tests are also available for purchase from the test provider directly.
The state life and health insurance license exam is a computer-based test using four option multiple choice questions. If you are unfamiliar with this format, taking a practice test has the added benefit of showing you how the test is delivered.
The actual life and health insurance license exams are timed and range from one hour and fifteen minutes to over two hours. Try to replicate your test requirements as closely as possible during your practice tests, including enforcing time limits, closing study materials, and turning off personal electronic devices.
Review Your Study Materials
All of the state insurance licensing exams require test-takers to apply their knowledge to real world scenarios. The exams are designed this way to ensure that license holders are prepared to answer real world questions from actual clients.
One of the major benefits of using a pre-license education course to prepare for the life and health insurance license is access to knowledgeable instructors. If you take a live course, you can ask your facilitator to illustrate complex concepts with multiple examples and benefit from their years of practical experience.
Go over your study materials with a friend or family member who is not familiar with insurance. If you can explain concepts to them and answer their questions, you are on your way to being ready to work with clients.
How to Pass the Life and Health Insurance Exam
Once you have completed your pre-licensing education course, it’s time to take the life and health insurance exam. Depending on your state, you may be able to take them in one combined exam or have to register for two separate tests. Your pre-licensing course will go over which exams you can register to take.
Passing all insurance exams is all about preparation. Most states allow a period of around 90 days to take the exam after you complete your course.
The sooner you register for and take the exam, the more fresh the information will be in your mind. Do not wait the full 90 days unless you have scheduling conflicts that prevent an earlier test date.
How Much Does the Life and Health Insurance Exam Cost?
The cost of the life and health insurance exam varies by state. For example, each insurance exam in North Carolina costs $45. Neighboring Virginia has a $35 fee per exam. If you choose to take the life and health insurance exams separately, you will need to pay for two exam fees and might need to complete two separate pre-licensing education courses.
Keep in mind that to become fully licensed as a life and health insurance agent, you will often need to pay additional fees. These can include an application fee, background check processing fee, or fingerprinting costs.
Is the Life and Health Insurance Exam Hard?
The National Association of Insurance Commissioners reported that the overall pass rate of the life and health insurance joint exam is 64.8%. It has the highest pass rate of all insurance licensing exams, although that does not mean that it is easy or that you do not need to focus on studying. In general, more people choose to take the combined life and health exam when available than the individual life or health licensing exams.
Once you pass the life and health insurance exam, you will get a PASS designation on your computer screen at the test center. You are now on your way to becoming a life and health insurance agent. You will need to complete your state’s application, including a background check and fingerprinting.
If you do not pass the life and health insurance exam, you will receive a FAIL notification and get more detailed information about your test results. This will help you tailor your studying to address the areas that you need to review before retaking the exam.
You will be able to schedule another exam attempt 24 hours after your test using the same process. Your completed pre-licensing education course will satisfy the requirement for multiple exam attempts, often up to five attempts or 90 days. Check with your state and pre-licensing education instructor to determine the steps to rescheduling an exam, if needed.
Ready to begin your career as a life and health insurance sales agent? Start by finding a pre-licensing education course to prepare for the life and health insurance exam. Once you have the required knowledge, you are all set to pass the licensing exam and become a life and health insurance agent.
Before getting started, we recommend having a look at the plethora of ways that life insurance companies make money.