Attorneys And Life Insurance: Licensing Exam Needed?

To practice law as an attorney, you must pass the bar exam. However, to sell life insurance, you must pass a different kind of licensing exam. This exam is offered by state licensing boards and is required for anyone who plans to sell life insurance. The exam covers key terms, concepts, and regulations that apply to life insurance agents. While the exam is state-specific, there is a lot of content that is tested in all fifty states. The exam is typically between 50 and 100 questions and you will have between one and two hours to complete it. To prepare for the exam, it is recommended that you take a pre-licensing course and utilize practice exams.

State-specific insurance exams

Each state has its own life insurance licensing requirements and processes. 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. The life insurance license exam is often divided into a general life insurance section and a state-specific section. The state-specific section tests your knowledge of your state's rules and regulations, including requirements for contract language, disclosures, and rules that pertain to the life insurance policy itself. It also covers licensing requirements for you as the agent, as well as for brokers, limited representatives, and adjusters. You may also be asked about continuing education requirements and available professional organizations in your state.

The number of questions on the test, the format, and the length of time it takes all vary by state. Some states' tests contain 150 questions, while others only contain 50 questions. Some states time their exams at 2.5 hours, while others set the time limit at 1.5 hours. The fee for each attempt at the life insurance exam is between $32 and $121. The length of the test also varies by state but is often between 50 and 100 questions. You will be given between one and two hours to complete the test.

The tests that are required for insurance licensing vary from one state to the next. To prepare, individuals should take insurance pre-licensing courses that cover all of the material that may be covered on the exam. They can then use practice exams and questions to challenge the knowledge they have acquired.

In the state of Texas, for example, the insurance license exam is administered by Pearson VUE. The exam includes both general and state-specific material. The general questions test your federal insurance product and agent knowledge, while the state-specific questions cover Texas insurance regulations and laws. Texas allows only one online attempt per exam. All other attempts must be taken in person at a Pearson VUE testing center.

Prerequisites for the life insurance exam

The life insurance license exam is not a test that you can take without preparation. Some states require a pre-license education course, while others require you to pass the exam before moving on with your application. 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 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 need to provide the date you completed the course and the school code on your exam registration application. Many states refer to this as your Exam Admissions Ticket. You will also need to provide your personal information, including your full legal name and social security number, to verify your identity at the test time.

Preparing for the Exam

• Get a pre-license course: Even if it is not required in your state, a pre-license course can help you familiarise yourself with the extensive content you need to memorise.
• Make time to study: Allocate around one to two weeks to prepare for your exam, going through all the material at least twice.
• Control test anxiety: Establish a consistent pre-test routine, get plenty of sleep, study effectively, and arrive early at the test centre to familiarise yourself with your surroundings.

Exam Day Requirements

On the day of the exam, you will need to bring the following:

• Exam Admissions Ticket (if applicable in your state)
• Copy of your pre-licensing education completion certificate
• Two forms of identification: Both must have a visible signature, but only one needs to include a photo. Commonly accepted forms of identification include a driver's license, passport, or military ID.

What to Expect from the Life Insurance Exam

The life insurance exam is a proctored computer test in a quiet, monitored testing environment. Your score will be evaluated promptly and automatically reported to the appropriate state agency as part of your application.

Life insurance basics

Life insurance is a contract between an individual and an insurance company, where the insurer promises to pay a sum of money to one or more named beneficiaries when the insured person dies. In exchange, the policyholder pays premiums to the insurer during their lifetime. The best life insurance companies have good financial strength, a low number of customer complaints, high customer satisfaction, several policy types available, optional riders, and easy application processes.

There are two broad categories of life insurance: term life and whole life. Term life insurance provides a death benefit for a set period, typically between 10 and 20 years. Whole life insurance, on the other hand, provides protection for the long term and pays a death benefit whenever the policyholder dies.

The cost of life insurance is based on several factors, including age, gender, health, lifestyle, and occupation. The younger and healthier an individual is, the lower their insurance premiums are likely to be. Life insurance is particularly important for those with dependents, as it can provide financial support and peace of mind for loved ones after the insured person's death.

Life insurance can also be used to create an inheritance, pay federal and state "death" taxes, make charitable contributions, and create a source of savings. The death benefit of a life insurance policy is usually tax-free, providing additional financial relief for beneficiaries.

Before purchasing life insurance, it is important to analyze your financial situation and determine how much money would be needed to maintain your beneficiaries' standard of living. Additionally, consider how long you will need coverage and what type of policy best suits your needs.

To obtain a life insurance license and sell life insurance, individuals must pass a state licensing exam. This exam covers key terms, concepts, and regulations related to life insurance products, procedures, and state-specific rules. The exam fee typically ranges from $32 to $121, and passing it is a crucial step towards becoming a licensed life insurance agent.

Application process

The application process for a life insurance license varies from state to state. However, there are some commonalities.

Firstly, candidates must meet the eligibility requirements, which typically include being over the age of 18 and possessing a high school diploma or equivalent. Some states also require candidates to be a resident of the state in which they are applying for a license.

Secondly, candidates must pass the state licensing exam. This exam covers both general insurance knowledge and state-specific regulations. The exam is typically divided into two sections, with the number of questions and the time limit varying by state. For example, in California, the Life Insurance license exam consists of 75 questions, while in Texas, the Life, Accident, and Health exam has 80 scorable questions. The pass rate for these exams also varies, with the national average being 62.9%.

Thirdly, candidates must submit an application, typically online, and pay the associated application fee. Again, the fee amount differs by state, ranging from $32 to $121. In some states, such as Texas, candidates must pass the exam before applying, while in others, the application can be submitted prior to taking the exam.

Finally, candidates may be required to undergo a fingerprint and background check. This typically involves submitting fingerprints to a designated service, such as IdentoGO in Texas, and providing a copy of the receipt to the relevant state department.

It is important to note that each state has its own specific requirements and processes, so it is recommended to review the guidelines for the particular state in which one is seeking a life insurance license.

Exam preparation

Step 1: Learn Your State's Requirements and Get the Exam Outline

Each state has different requirements and different types of exams. So, the first thing you should do is check with the department of insurance in your state (or the state where you’ll be working) for the requirements. For example, some states require their licensing candidates to complete prelicensing education before they take the exam. So, before you sign up for the exam, you’ll want to make sure you’ve fulfilled that requirement. You should also verify whether you need a sponsor to take an exam—some states won’t let you take the exam without one.

Step 2: Schedule Your Exam

You can choose the date and time of your exam in most states. Scheduling options are usually on the respective state’s department of insurance website. To give yourself time to study, schedule your exam at least two weeks in advance. The cost to take the exam varies from state to state, but expect it to range from $40 to $150.

Step 3: Have a Study Plan

You’ll need to devote about 35 to 40 hours of studying if you expect to pass. Cramming is not recommended. Instead, plan to study for the exam over the course of several weeks. Have a realistic plan that’s easy for you to stick to, dividing your study time into study sessions that give you plenty of time to absorb the material. Setting up a study calendar can help you follow your plan.

Step 4: Follow the State Exam Outline

The state outline for the exam has a list of the topics that will be covered and how they are weighted. These are the life insurance topics you are most likely to be tested on:

• Life insurance general knowledge
• Life insurance policies
• Policy riders and options in life insurance coverage
• Life insurance tax issues
• Annuity policy tax issues

If you are taking a combined exam, there will be health insurance topics as well. The exam outline also tells you the number of questions included in each section of the exam. You should concentrate on the sections with the most questions and the topics with the most weights so that you master what’s most important first.

Step 5: Prepare and Practice

Taking an exam preparation review course can increase your chances of passing. You can choose between live classes, online courses, or printed books for self-study. You should also take practice exams. These will help you determine how well you have absorbed the material and what still needs your attention. A mock or practice exam that mimics test conditions enables you to judge whether your pacing is right for finishing the exam in the allotted time.

Step 6: Know the Exam Center Process

Often what trips students up is not knowing what to expect on exam day, even if they are otherwise prepared. Try visiting the test center before the exam—see how long it takes to get there and get a feel for the testing area. Find out what forms of identification are needed to take the exam so you can have them ready on exam day; each state has its own requirements. On the day of the exam, try to arrive at least 30 minutes early. You should expect to put all of your belongings in a locker before you get assigned to a testing cubicle. When you get to your assigned test spot, an employee will explain the expected conduct to you.

Step 7: Stay Calm and Take the Exam

• Read each question carefully and thoroughly before answering. Most questions will have a lot of detail and qualifying information in them. Try to focus only on the information in the question and avoid making assumptions just to fill in the blanks.
• Find the questions you know the answer to and answer them first. If you find yourself stuck, move on and come back to it later.
• Don’t leave any questions blank. Guessing the answer still gives you a 25% chance of getting it right. And, if you can eliminate any of the multiple-choice options that you know to be incorrect, you will have an even better chance at guessing the correct answer.

Frequently asked questions