Brokers AllianceThe life insurance exam cheat sheet that gets you licensed.
Every term, policy type, and study strategy you need to pass the life and health insurance exam, in one place. Study it now, free. Once you pass, the last section shows the move most new agents make next.
This cheat sheet is written for people preparing for their insurance license and for agents building a career. Shopping for a policy for yourself or your family? Call (866) 872-9394 and the team will connect you with an agent.
The life insurance exam is the state licensing test you pass before you can legally sell life insurance policies. Preparing for it can feel like a lot, but with the right terms, concepts, and strategies in front of you, it becomes a checklist you can work through. Whether you are just starting your prep or need a quick refresher, this guide covers the essentials.
The exam checks four things: the policy types you can sell, the core vocabulary of the business, the rules your state sets for selling insurance, and the ethical and legal duties every licensed agent carries. Master those four areas and you walk in ready. The sections below break each one down.
Key terms you need to know
These come up again and again on the test. Learn the definition and the plain-language meaning of each.
The amount the policyholder pays for coverage, usually on a monthly or annual basis.
The person or entity named to receive the death benefit from the policy when the insured passes away.
The process of evaluating an applicant's risk and setting the premium based on factors like age, health, and lifestyle.
The amount paid to the beneficiary when the insured person dies.
The savings component inside a permanent policy, such as whole life or universal life, that grows over time and can be accessed by the policyholder.
The person who owns the policy, pays the premium, and holds the rights to name the beneficiary and manage the contract.
Policy types on the exam
Know the four main life insurance policies cold. Understand what each one does, and its features and trade-offs.
Term Life
Coverage for a set term, such as 10, 20, or 30 years. It builds no cash value and is usually the least expensive option.
Whole Life
Permanent coverage for the insured's entire life as long as premiums are paid. It includes a cash value component that grows over time.
Universal Life
Flexible permanent coverage that lets the policyholder adjust premiums and death benefit. It carries a cash value that earns interest.
Variable Life
Permanent coverage with a cash value that can be invested in securities like stocks and bonds. Both the cash value and death benefit can move with investment performance.
What your state tests
Each state writes its own rules for life insurance, so the state portion of the exam is one you cannot skip.
Complete a state-approved pre-licensing course, then pass the life insurance exam to obtain your license.
Each state has specific laws about which policy types can be sold and how agents must conduct business.
State laws that keep life insurance policies fair and transparent for buyers. Learn the ones that apply where you sell.
The fiduciary duties every agent carries: honesty, transparency, and putting the client's trust first.
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How to study, and what to do on exam day
A study plan, a game plan for the test itself, and the mistakes that trip up new candidates.
Study strategies
- Focus on key concepts. Study the major policy types first, term, whole, and universal, and know their features, benefits, and drawbacks.
- Master key terms. Memorize premiums, beneficiaries, and underwriting. They appear frequently and anchor everything else.
- Take practice exams. They show you the format and reveal the areas that need more attention.
- Build a study schedule. Set aside time each day and work through one section at a time so the material sticks.
- Review your misses. After each practice test, go back through the wrong answers and understand why, so the same slips do not repeat on exam day.
On exam day
- Get a good night's sleep. Rest keeps you alert and focused during the test.
- Eat a real breakfast. A nutritious meal fuels your brain and steadies your energy for the whole exam.
- Arrive early. Give yourself time to get to the location so you feel calm and prepared.
- Read each question carefully. Understand exactly what a question asks before you select your answer.
- Pace yourself. Take your time. When unsure, rule out the obviously wrong choices, make your best call, and come back to it later if you need to.
Mistakes to avoid
- Skipping state-specific law. Your state's insurance laws are on the exam, so review them before test day.
- Overlooking ethics. Ethical standards carry real weight. Know the fiduciary duties: honesty, transparency, and client trust.
- Cramming one topic. Spread your study across every area rather than over-weighting a single policy type.
Life insurance exam FAQ
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