Are you a good test taker? Or, like many people, do you cringe at the thought of having to pass an exam? Insurance licensing exams can feel stressful, especially when you are learning unfamiliar terminology and preparing for a test that determines whether you can move forward with your license.
I cringe at the thought of taking an exam!!
Preparing for the Insurance Exam
Preparing for a state insurance licensing exam can feel overwhelming, especially if you are new to insurance terminology and concepts. The most effective preparation goes beyond memorizing definitions or repeatedly taking practice exams.
Understanding the core insurance concepts and learning how to apply them to exam-style questions will help you recognize correct answers even when questions are worded differently than the material you studied.
Insurance concepts are generally consistent from state to state, while insurance laws and regulations vary. Your preparation should therefore include both the fundamental concepts for the license you are pursuing and the state-specific material included on your examination content outline.
Many incorrect answers rely on subtle wording and phrasing designed to mislead candidates who read too quickly. Understanding common insurance exam word traps can help you recognize these patterns and avoid answers that initially appear correct.
While taking endless practice tests and memorizing dozens of definitions will help prepare you, understanding the core concepts within insurance is the key to passing the state exam.
Read, Reinforce, and Repeat
Start by carefully reviewing each lesson and making sure you understand the concepts rather than simply memorizing definitions. Use lesson exams and practice questions to reinforce what you have learned and identify topics that need additional review.
As you progress, use full-length practice exams and exam simulators to apply concepts across multiple topics. Repetition helps reinforce the material and makes it easier to recognize concepts when they are presented differently on the state exam.
Recognize That Concepts May Have Multiple Names
Insurance exams may use different terms to describe the same or closely related concepts. For example, Professional Liability Insurance may also be referred to as Errors and Omissions Insurance, or E&O.
Learning common alternative terms can help you recognize a concept even when the exam uses terminology that differs from the wording you encountered while studying.
Understand the Differences Between Similar Concepts
Insurance exams frequently test the differences between concepts that seem similar. Instead of memorizing definitions independently, focus on understanding what distinguishes one term, policy provision, or insurance product from another.
When two answer choices appear correct, identifying the specific difference between the concepts can help you determine which answer best fits the question.
Scheduling the Test
Testing Accommodations
If you require testing accommodations, review the policies of your state’s testing administrator before scheduling the exam. Testing accommodations may be available for candidates with qualifying disabilities or other approved needs.
Requirements and documentation vary by state and testing provider, so request any necessary accommodations before scheduling your exam.
Taking the Test
Unscored and Pre-Test Questions
Some state insurance licensing exams include unscored questions, often referred to as pre-test or experimental questions. Testing providers use these questions to evaluate whether they may be appropriate for future exams.
Unscored questions do not affect your exam score, but they are generally not identified during the exam. You should therefore approach every question as though it will be scored.
The number of scored and unscored questions varies by state and license type. Review your state’s examination content outline before test day so you understand the structure of the exam you will be taking.
We recommend reviewing your state’s examination content outline for the number of scored and unscored questions included on your specific exam. To review your Examination Content Outline, visit our insurance exam requirements page and choose your state. On your state-specific license requirements page, you can find the Examination Content Outline within Step 1.
Insurance licensing exams use several common question formats, including direct recall, application, best-answer, exception, and calculation questions. Understanding insurance licensing exam question types can help you recognize what a question is asking and determine the best approach before selecting an answer.
Read Each Question Fully and Carefully
When taking the exam, you may feel pressed for time or become overconfident and read a question too quickly. Take the time to read each question in its entirety and make sure you understand exactly what is being asked before choosing an answer.
Rushing through a question can cause you to overlook important details, qualifiers, or other wording that changes its meaning.
Choose an Answer Only on the Basis of the Information Provided
In understanding a question, realize that everything you need to know is found within the question. Do not make additional assumptions based on what you think is common sense or on personal experience. The context can vary depending on how the question is asked, so focus only on the information provided and relate it to the multiple-choice answers. The answer that best fits the information provided is the correct answer.
Read All Answer Choices Before Choosing the Best Answer
When reviewing the available answer choices, some options may be clearly incorrect or unrelated to what the question is asking. Other choices may be similar in meaning or wording, requiring you to determine which one best answers the question.
Even when you think you know the correct answer, read all of the available choices before making your selection. Carefully reviewing both the question and each answer choice can help you avoid selecting an answer that initially appears correct but does not fully address what is being asked.
Focus on the Main Points in a Question
Some exam questions include details that are not necessary to determine the correct answer. When you encounter a question like this, identify the information that matters and separate it from details that do not affect the answer.
For example:
ABC Insurance Company is incorporated in Illinois. It offers several types of life insurance, including term life, whole life, universal life, and interest-sensitive whole life. ABC Insurance Company is currently the second-largest seller of universal life insurance policies in Texas. What type of insurer is ABC Insurance Company considered in the state of Texas?
A. Large Cap Universal Life Insurer
B. Interstate Insurer
C. Foreign Insurer
D. Domestic Universal Life Insurer
Most of the information in this question is not needed to determine the correct answer. The two important details are that ABC Insurance Company is incorporated in Illinois and is conducting insurance business in Texas.
Because the company is incorporated in a state other than Texas, it is considered a foreign insurer in Texas. The correct answer is C. Foreign Insurer.
Review additional insurance exam question examples to see how wording, qualifiers, and answer choices can affect how licensing exam questions should be approached.
Be Mindful of Qualifiers
Qualifiers are words that narrow or change the meaning of a question and can be important in determining the correct answer. Pay particular attention to words such as always, never, often, unlikely, most, and least because they can significantly change what a question is asking.
For example, compare these two statements:
It is always warm in Florida.
It is often warm in Florida.
The word always makes the first statement absolute, meaning Florida would have to be warm at all times for the statement to be true. The word often does not create the same absolute condition. Recognizing qualifiers like these can help you distinguish between answer choices that initially appear similar.
Watch for Negative and Except Questions
Some exam questions ask you to identify the answer that is not correct or use wording such as “All of the following…EXCEPT.” These questions reverse what you would normally look for, so read them carefully before reviewing the answer choices.
For example:
All of the following are considered basic elements associated with an agent acting as a fiduciary except:
A. Being honest and trustworthy
B. Being qualified to perform insurance sales functions
C. Using good moral judgment and acting in good faith
D. Understanding how first-year commissions are beneficial
The first three answer choices relate to an agent’s fiduciary responsibilities. The question asks for the exception, so you are looking for the choice that does not belong with the others.
The correct answer is D. Understanding how first-year commissions are beneficial.
Avoid Changing Answers Without a Reason
After selecting an answer, avoid changing it simply because you begin second-guessing yourself. If you realize that you misread the question, overlooked a qualifier, or remember information that changes your reasoning, revising your answer makes sense.
Otherwise, review the question and answer choices carefully and choose the answer best supported by the information provided.
Be Mindful of the Time
The state exam is timed, so periodically check your remaining time and pace yourself accordingly. If a question is taking too long, consider moving on and returning to it later if the testing system allows you to do so.
Take enough time to read each question carefully, but avoid spending too much time on any single question.
Stay Focused Throughout the Exam
Insurance licensing exams can require sustained concentration. Staying focused, carefully reading each question, and relying on the preparation you completed before exam day can help prevent avoidable mistakes.
If you encounter a difficult question, do not allow it to affect your approach to the questions that follow.
Frequently Asked Questions
How should I prepare for an insurance licensing exam?
Focus on understanding insurance concepts rather than memorizing definitions alone. Review the material consistently, use exam-style practice questions, identify weaker topics, and take full-length practice exams before scheduling the state exam.
Are insurance licensing exams difficult?
The difficulty varies by state, license type, and your familiarity with insurance concepts. Candidates who understand the material and consistently perform well on exam-style practice questions are generally better prepared for the state exam.
How many practice exams should I take before the insurance exam?
There is no universal number of practice exams you must take. Continue practicing until your scores are consistently strong and you understand why both correct and incorrect answers are right or wrong.
What should I do if two answers look correct?
Read the question again and look for qualifiers or details that distinguish what is specifically being asked. Compare the remaining choices and select the answer that best fits the information provided in the question.
Do insurance licensing exams include unscored questions?
Some state insurance exams include unscored pre-test or experimental questions. Because these questions generally are not identified during the exam, approach every question as though it will count toward your score.
Next Steps
If you are preparing to take a state insurance licensing exam, begin by reviewing the requirements for your state and selecting the appropriate pre-licensing or exam preparation course.
Visit our license requirements page to review the licensing process for your state, or explore our insurance pre-licensing and exam prep courses to begin preparing for the exam.
