What Type of Questions Are on the Life Insurance License Exam?

August 15, 2020

Getting your insurance license can be a daunting task. There’s a lot of studying you have to do. Thankfully, the insurance license exam can be passed quickly and your career as an agent can start shortly after. Read on to learn more about the insurance license exam and what kind of questions you can find on it.
 

Get to know your insurance exam

The insurance license exam is a multiple choice exam. There are no fill-in-the-blank questions or essay questions, meaning that those taking the exam don’t need to worry about memorizing answers or how to explain complex themes in the insurance world.¹ However, that doesn’t mean the exam is easy, which is why it’s important to know the items covered on the Test Content Outline (TCO). A TCO is an outline of questions you can expect to possibly see on the insurance license exam, and covers all the tricky questions many agents get wrong!¹
 

Question variations

In general, those who take the exam state the questions can be broken up into three categories, each taking up one-third of the exam questions: terminology, number/day questions, and critical reasoning questions where those taking the exam are required to draw on past knowledge to reach a practical solution – usually presented in story form.¹ When taking the exam, it’s vital to pay utmost attention to the details in the questions as the details are often there to throw you off. 
 

Sample questions

Being prepared for the insurance license exam means dedicating time to studying for it. However, it helps to have an idea of what questions you can expect to find on it first. Here are some sample questions you may find on the exam.¹

1. The deductible does each of these EXCEPT

1. Reduce loss costs.
2. Lower premium costs.
3. Indemnify the insured.
4. Excludes payment for small claims.

  2. Chance of a windstorm causing a loss to one’s property is:

1. Risk
2. Uninsurable
3. Hazard
4. Peril

  3. Each of the following involves pure risk EXCEPT:

1. Bodily injury
2. Drought
3. Loss in the stock market
4. Flood

 
Answers: 1. c, 2. a, 3. c.
 
Now that you’ve got an idea of what to expect on your insurance license exam, you can step forward with confidence knowing what areas to pay attention to in your studies. However, it is often said that studying insurance practice exams alone aren’t enough. Why? Because there’s no way to guarantee what questions will be on the exam! It’s suggested that those looking to take the exam first enroll in a comprehensive pre-licensing insurance course. These courses offer comprehensive information pertinent to your state, and can help you ace your exam in style.
 
1. Americanprofessor.com, Insurance License Exam Questions, n.d.