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Taking Your Insurance License Exam for The First Time? How Should You Prepare?

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If you’re a recent newcomer to Texas and plan to work in the insurance industry, you’ll need to be licensed before you can begin conducting business. And even if you’ve already been licensed as an insurance agent or adjuster, life insurance counselor, title agent, or escrow officer in another state, it’s likely you’ll need to take and pass Texas’s licensing exam (administered by the Agent and Adjuster Licensing Office (AAL)) to ensure you’re up-to-date on this state’s laws and regulations before you can begin selling insurance products or advising clients. Read on to learn more about the best preparation methods for your Texas insurance license exam, as well as what you should be able to expect from the exam itself.

Insurance license

What can you expect from the insurance license exam?

Each state designs its licensing exams slightly differently, so don’t assume the Texas exam will mimic others you’ve encountered or taken. Texas’s exam is entirely composed of multiple-choice questions, which — for savvy and strategic test-takers — can improve the odds of a passing score compared with a test that contains a mix of open-ended or essay questions and multiple choice questions. The ability to eliminate just one or two obviously incorrect answers for each question can raise your odds of a successful guess from 25 percent to up to 50 percent, making a passing score much more achievable even if you aren’t confident about some of your answers. Many of the questions will focus on definitions, math calculations, and areas of insurance law and procedure that are Texas-specific.

What should you do to prepare for your insurance license exam?

There are several steps you can take to prepare yourself for this exam without breaking the bank or spending weeks fully immersed in study. The first is to start early by picking up some testing prep materials, preferably those that include sample test questions — taking these sample tests at the beginning and end of the study process (and timing yourself to ensure you won’t run short on time during the test itself) can help you memorize facts and definitions while also building confidence and helping you learn to pace yourself as you’re taking the test.

You’ll also want to set aside a dedicated study period each day, giving yourself a day or two “off” per week. Just like the parable about eating an elephant one bite at a time, studying is best done in “small bites” over a longer period of time rather than attempting to cram in a great deal of information during the last few days or weeks leading up to the test. By compartmentalizing your preparation into a set period of time each day, you’ll also be able to achieve balance, taking part in family or recreational activities without worrying that this is time that would be better spent studying.