Becoming a life insurance agent requires professional knowledge and culminates with taking and passing a state life insurance exam. Each state has their own life insurance licensing requirements and process. To begin the life insurance license application process, some states have pre-education and application requirements. Others require that you pass the licensing exam before moving on with your application.
The process in all states includes a life insurance exam, which tests your knowledge of life insurance products and procedures, as well as your state’s regulations.
No matter what path your state outlines to get your life insurance license, start by preparing and studying for your life insurance exam. This will help you make the most of your test opportunity and put you on the path to becoming a life insurance agent.
Life Insurance Exam Study Plan
When you are ready to pursue your life insurance license, it helps to have a plan. Start by making sure that you understand where the life insurance exam falls in your state’s licensing process. Then move on to your pre-licensing education requirements, if applicable, and start studying.
StateRequirement’s study plan is four weeks long, but some people may be able to compress this study time in as little as a week. Whatever you decide to do, ensure that you are not under-studying or rushing through the process. Passing on your first attempt is the main goal of all your study.
Week 1: Develop a study schedule. Consider your professional and family commitments. It helps to schedule out specific blocks of time each day to complete your pre-education course modules or attend an in-person education course.
Most courses consist of around 20 hours of material. Resist the urge to rush through the modules as quickly as possible. Spending a couple of hours each day on your pre-license education course, with additional time on practice questions and practice tests will allow you to master the material before test time.
For life insurance pre-license education courses and exam prep, StateRequirement recommends:
Week 2: Answer practice questions, take practice tests, and quiz yourself on related vocabulary; the more time you can spend on mastering the knowledge that you need to pass the life insurance exam, the better.
Week 3: Take a mock life insurance exam. Set up space in your home as if it was the testing center with your computer. Keep your cell phone and other personal devices in another room. Set a timer and complete a practice test. Score your test to see how your studying has paid off. If there are sections that you need to keep working on, you have time to keep studying and reviewing those items.
Week 4: The week before your test, spend some time studying but don’t overwhelm yourself trying to cram for the exam. During the last few days before your life insurance exam, make sure that you are in your best shape to take the test. Get plenty of rest, eat healthy meals that give you energy, and get your heart pumping with some physical activity.
Studying for the Life Insurance Exam
The life insurance exam covers key terms, concepts, and regulations that apply to life insurance agents. It helps to break these down into manageable chunks by topic. You can use the content outline provided by your state to focus your studying or look for an education course that provides unit outlines and guides.
Units of study for the life insurance exam:
- General insurance terms: You should be familiar with everything an insurance agent does, including evaluating risk, completing contracts, and the responsibilities of the agent and agency.
- Life insurance basics: Be familiar with how life insurance works, how it is paid, types of policies, premiums, and underwriting. You will likely be asked to apply your knowledge in scenario questions on the exam as well.
- Life insurance policies, provisions, options, and riders: To pass the life insurance exam, you will need to be familiar with all types of life insurance policies (term, whole life, group life insurance) and the various provisions, options, and riders that a plan can have attached to it. Expect this section to make up a large portion of the exam, as it will account for a lot of your work and expertise once you are a licensed life insurance agent.
- Annuities: Learn what an annuity is, how these products fit into a life insurance policy, and how they can be used by beneficiaries.
- State Regulations: Learning the state rules and regulations that apply as a licensed life insurance agent can be daunting. A top pre-licensing education course will help you master this content, including the most up to date laws.
- Tax Code: You do not need to have a degree in accounting to pass the life insurance exam. But you should be familiar with the basic tax implications of life insurance policies, benefits, and how different types of retirement accounts work with life insurance policies and taxes.
Even if pre-licensing education is not required by your state, it is a good idea to invest time and money into a study course that can prepare you to pass your life insurance exam on your very first attempt.
What is on the Life Insurance Exam?
While the life insurance exam is state-specific, there is a lot of content that is tested in all fifty states. The life insurance license exam is often divided into a general life insurance section and a state-specific section. You can structure your studying to cover all of the topics included in your state’s content outline. Many states cover these items.
Life Insurance Exam Content Outline
- Types of Life Insurance
- Policy Provisions, Options, and Other Features
- General Life Insurance Topics
- State Section
Types of Life Insurance
Different types of life insurance include the term, whole life, endowments, premium variations, universal life, and combination policies. Within each type of insurance, you should understand the general structure, features, and when that type of policy is recommended. Sample items from the North Carolina life insurance exam content outline include:
I. Types of individual life insurance
1. General nature
2. Basic types of term contracts
3. Special features
B. Whole life insurance
The content outline continues to include more testable information, but this gives you an idea of how in-depth each section goes.
You will need to know the basic contract structure of an annuity. In this section of the test, expect to see questions about setting up an annuity-based life insurance policy, how benefits are determined, and when benefits are paid. The Illinois life insurance exam content outline covers:
1. Single and flexible premium
2. Immediate and deferred
3. Fixed and variable
Policy Riders, Provisions, Options, and Other Features
This section covers how life insurance policy contracts are structured, provisions that apply in certain circumstances (ex. suicide, misstatement of age, aviation, war, etc…), how to designate a beneficiary, and the different types of beneficiaries. You will also be asked about cash value and loans against a life insurance policy. The Colorado life insurance exam content outline lists the following as a sample of testable items:
II. Policy riders, provisions, options, and exclusions
A. Policy riders
1. Waiver of premium and waiver of monthly deduction
2. Guaranteed insurability
3. Payor benefit
4. Accidental death and/or accidental death and dismemberment
5. Term riders
6. Other insureds
7. Long term care
8. Return of premium
General Life Insurance Topics
The final section of the general life insurance content on the test covers a variety of topics that don’t quite fit under the other sections. These include group contracts, underwriting, and conversion, retirement plans, social security, tax implications of life insurance payouts, and legal concepts as they apply to life insurance contracts.
The majority of the state-specific section tests your knowledge of your state’s rules and regulations. These can include requirements for contract language, disclosures, and rules that pertain to the life insurance policy itself. It also covers licensing requirements for you, as the life insurance agent, as well as brokers, limited representatives, and adjusters. You may also be asked about continuing education requirements and available professional organizations in your state.
Life Insurance Exam Study Tips
There is a lot of information on the life insurance exam, but by completing your pre-license education course, taking practice tests, and learning about life insurance in your state, you will be ready on test day.
For life insurance pre-license education courses and exam prep, StateRequirement recommends:
Take a Life Insurance Practice Exam
Practice tests are one of the best ways to prepare for any exam, particularly those that are computer-based. You can purchase computer practice tests a-la-carte or complete them as part of a study course.
When taking these practice exams, treat them just as you would the real thing. This means closing your study notes, having a quiet testing space, and setting a timer. This will give you the best approximation of your test readiness.
Know Your State
Your State will determine both the exam that you need to register for and the pre-licensing education requirements and course. You should also be familiar with your state’s application procedure, including when in that process you will need to register for your life insurance exam.
General Life Insurance Exam Information
The life insurance exam is required for anyone who plans to sell life insurance. Once you pass the exam and complete your state’s application process, you will be a licensed life insurance agent.
The fee for each attempt of the life insurance exam is between $32 and $121. See the map below for your state’s exam fee.
The length of the test varies by state but is often between 50 and 100 questions. You will be given between one (1) and two (2) hours to complete the entire test. Some tests include unscored questions to help collect data, but they are not marked as unscored during the test. Make sure to answer each question to the best of your ability.
You will need to answer factual questions about general and state-specific topics as well as some questions that ask you to apply your knowledge. All of the questions provide four multiple-choice answers. Some questions ask about vocabulary or terms used in the insurance industry. Others are scenario-based and require test-takers to apply critical thinking to ensure that they are ready to be a life insurance agent.
The overall pass rate for the life insurance exam nationally is 62.9%. It is not an easy test, but a pre-licensing education course can help you prepare. Using an instructor-led study course is an excellent way to prepare for the life insurance license exam, even if it is not required by your state.
Prerequisites for the Life Insurance Exam
The life insurance license exam is not a test that you can take without preparation. Some states even require a pre-license education course. Common prerequisites for the life insurance exam include:
- Pre-licensing education
- Initiating your application
- Providing your fingerprints
- Initiating a background check
You must make an appointment to take the life insurance license exam. Check with your state’s guide to find out how to initiate your application, pay exam fees, and receive the required information to register for an exam.
If you are required to complete pre-licensing education, you will be asked to provide the date that you completed the education course and the school code on your exam registration application. Many states refer to this as your Exam Admissions Ticket. You also need to provide your personal information, including your full legal name and social security number. This is particularly important as it is used to verify your identity at test time.
How Do I Register for the Life Insurance Exam?
You will generally have 90 days to take your exam after completing your pre-licensing education. As with all the steps to get your life insurance license, you should verify the deadlines with your state’s guide.
You can register for any available exam date up to 24 hours before the test. Test dates are limited by availability, so it is a good idea to register as far in advance as you can to make sure your desired testing date is available. If you do not test within 90 days of your course, you may need to complete it again.
To complete your test registration, you will need to have:
- Full legal name
- Address, phone number, email address
- Date of birth
- Name of your exam
- Requested date of exam and testing location
- National Producer Number (NPN), which is provided in an email confirmation that you will receive when you begin your application
Special Testing Accommodations
If you require special accommodations, such as a separate testing room, additional time, or a break as a nursing mother, you can contact the test administrator to request these ahead of registering for your test. You will need to submit your request before registering, as these accommodations cannot be added to an existing registration. Provide supporting documentation, such as a diagnosis from a physician or records of past accommodations, along with your request.
What Should I Expect from the Life Insurance Exam?
The life insurance exam is a proctored computer test. You can expect a quiet, monitored testing environment and prompt evaluation of your score. You will be able to complete a testing tutorial at your station before your timed exam begins. Your score is automatically reported to the appropriate state agency as part of your application.
Day of the Test – Life Insurance Exam Requirements
Plan to arrive at the testing center at least 30 minutes before your exam start time. Your exam proctor will go over the rules and procedures, as well as visually inspect any items that you have.
Things to bring to the test center:
- Two forms of ID
- Exam Admissions Ticket (if applicable in your state)
- Copy of your pre-licensing education completion certificate
Both forms of identification must have a visible signature, but only one needs to include a photo. Commonly used forms of identification include a driver’s license, passport, or military ID. Your identification must be valid and unexpired in order to be used.
Collect all of your required items a few days before your scheduled exam. Ensure that the name you use on your test registration matches exactly the name on your identification.
Things to leave at home or in your personal vehicle:
- Study materials
- Pens and pencils
- Bulky jackets or coats
- Cell phone
- Purse or backpack
- Hats and scarves
You will be able to check small items, such as car keys, into a provided locker. Cell phones and other personal electronics must be turned off before being stored. It is best to leave valuables and prohibited items away from the test center entirely if you can.
Before beginning your exam, you will have a chance to complete a computer tutorial at your testing station. If you need to take a break during the test, you may need to scan your palm before and after the break using the testing center’s security technology. This identifies you as the unique test-taker. During breaks, you will not be able to access your personal items unless given permission, such as in the case of needing medication.
After completing your exam, you will be provided with an official score report. It will include your pass or fail status. Your score will also be reported to your state licensing authority as part of your application.
What Happens When You Pass the Life Insurance Exam?
If you receive a PASS designation after your exam, congratulations! Your score will be reported to your state and added to your life insurance license application. Once you have passed, you will be able to continue on with the next steps of your life insurance license application. These vary by state but often include fingerprinting, a background check, and final application submission.
Once you submit your application, it will go to a review. You will be notified of your approved license and provided with an electronic copy. Make sure to print this out for your own records and to use when starting your career as a life insurance agent.
Other Required Licensing for a Life Insurance Agent
To market and sell securities as part of a life insurance plan, you will need to pass additional licensing exams offered through FINRA and NASAA. These can include the Series 6, Series 63, and Series 7. You will also need to pass the prerequisite Securities Industry Essentials (SIE) exam. Use the same study tips that helped you prepare for the life insurance exam to put you on the path to passing these other licensing tests.
What Happens If You Fail the Life Insurance Exam?
If you fail the life insurance exam, your score report will include information about which sections you struggled with on the test. This can help focus your studying before you are ready to retake the exam. Consider taking a live online study course to help focus on your weaker areas and answer questions you may still have.
You can retake the life insurance license exam. The number of times you can register for a new exam before needing to retake your pre-license education course varies by state. The available registration period, often 90 days from your pre-license education course completion, still applies; if you wait too long to schedule your first test attempt, you limit the number of retake opportunities available before you need to retake your pre-licensing education course.
Passing the Life Insurance Exam
Once you pass your state’s life insurance exam, it’s time to celebrate! This achievement means that you are one step closer to becoming a licensed life insurance agent. You are now in the perfect position to complete the steps in your state’s insurance licensing guide and ready to begin your new career. For more information, we recommend having a look at our How Do Life Insurance Companies Make Money article.