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Complete Guide About Insurance Licensing Exam

The insurance licensing exam pass rates in Texas are between 50-60% for Life & Health and Property & Casualty. Students need to prepare with the structured and exam focus courses to pass an exam in their first attempt.

Challenges of the Insurance License Exam

Insurance licensing exams are competency-based assessments designed to ensure you understand insurance principles well enough to serve clients ethically and effectively. Here’s what makes them challenging:

Exam Structure Varies by State and Line:

  • Most states, including Texa,s use Pearson VUE or PSI testing centers
  • Property & Casualty exams typically include 100-150 questions covering property insurance, liability, commercial lines, and state regulations
  • Life & Health exams focus on life insurance products, health insurance, annuities, retirement plans, and ethics
  • Passing scores range from 60-75% depending on your state
  • Questions are application-based.

Common Stumbling Blocks:

  • Policy provisions and exclusions (especially in homeowners and auto policies)
  • Commercial insurance classifications and rating
  • Annuity types and their tax implications
  • Medicare supplement plans and their standardization
  • State-specific regulations that differ from general principles

Building Your Study Foundation

Generic study advice won’t cut it here. You need an insurance-specific approach.

1. Choose the Right Prep Materials

Not all study courses are created equal. Look for:

State-Specific Pre-Licensing Courses:

Your state likely requires a certain number of hours of approved pre-licensing education. Complete this requirement through a reputable provider that includes:

  • Updated materials reflecting current laws and products
  • Practice questions that mirror actual exam difficulty
  • State supplement materials (critical for state-specific questions)

Supplemental Resources:

  • ExamFX, Kaplan Financial Education, or America’s Professor offer comprehensive courses
  • PSI or Pearson VUE sample exams (from the actual testing company)
  • State insurance department websites for current regulations
  • NAIC guidelines for understanding standardized policies

2. Master the High-Weight Topics First

Insurance exams aren’t weighted equally. Focus your energy where it counts:

For Property & Casualty:

  • Homeowners policies (HO-3 is tested heavily): dwelling coverage, personal property, liability, exclusions
  • Personal auto policies: coverage parts, exclusions, no-fault insurance provisions
  • Commercial general liability: occurrence vs. claims-made, coverage triggers
  • Workers compensation: state regulations, classifications, benefits

For Life & Health:

  • Life insurance policy types: whole life, term, universal, variable
  • Health insurance concepts: deductibles, coinsurance, out-of-pocket maximums, ACA provisions
  • Annuities: fixed, variable, indexed—tax treatment and suitability
  • Social insurance: Social Security, Medicare Parts A-D, Medicaid
  • Group insurance and ERISA regulations

3. Study Strategically, Not Frantically

The 70/30 Rule:

Spend 70% of your study time on material you don’t know well and 30% reviewing what you’ve already mastered. Too many students waste time re-reading chapters they already understand.

Spacing Effect:

Study in multiple short sessions (45-60 minutes) over several weeks rather than marathon cramming sessions. Your brain retains insurance terminology and concepts better with spaced repetition.

The Practice Exam Strategy

Take Baseline Assessment Early:

Within your first week of studying, take a full-length practice exam. Don’t worry about the score—this reveals your weak areas before you’ve wasted time studying the wrong things.

Simulate Real Testing Conditions:

  • Time yourself strictly (most exams allow 2-3 hours)
  • No notes, no breaks, no distractions
  • Use scratch paper only (most testing centers provide this)
  • Review every question you miss AND every question you guessed on

Question Pattern Recognition:

Insurance exams reuse concepts in different scenarios. After each practice exam, categorize your missed questions:

  • Did I not know the concept?
  • Did I misread the question?
  • Did I confuse similar terms (e.g., coinsurance in property vs. health)?
  • Did I fall for a distractor answer?

State-Specific Preparation: 

Many candidates pass the national portion but fail the state section. Here’s why:

State Regulations Differ Significantly:

  • Some states require specific policy provisions (e.g., Florida’s hurricane coverage requirements)
  • Licensing requirements vary (some states have reciprocity, others don’t)
  • State-specific penalties, fees, and continuing education differ
  • Some states have unique programs (California’s Proposition 103, Texas TWIA)

How to Prepare:

  • Request your state insurance department’s candidate handbook
  • Review your state’s insurance code highlights (available online)
  • Take state-specific practice questions separately
  • Understand your state commissioner’s role and authority

123Acethetest specializes in Property & Casualty and Life & Health exam preparation for Texas candidates. We have helped thousands of students to their exams. Contact us for more information. 

FAQS

What is the passing score for the Texas insurance licensing exam?

The passing score for Texas insurance licensing exams varies by line. For Life & Health, the passing score is typically between 70 and 75 percent, while Property & Casualty exams also require around 70 to 75 percent. Some state-specific questions may slightly adjust the final score, so it is important to check the latest candidate handbook.

How many questions are on the exam?

The Property & Casualty exam usually includes 100 to 150 multiple-choice questions covering personal and commercial lines, state laws, and ethics. The Life & Health exam typically has 100 to 130 questions covering life insurance, health insurance, annuities, retirement plans, and regulations.

How can I best prepare for the exam?

The best way to prepare is to complete a state-approved pre-licensing course, focus on high-weight topics such as homeowners and auto policies for Property & Casualty or life insurance types and annuities for Life & Health, take practice exams under real testing conditions, and review state-specific regulations separately.

Can I study on my own, or do I need a prep course?

Although it is possible to study on your own, taking a prep course significantly improves your chances of passing on the first attempt. Prep courses provide exam-focused content, practice questions, and state-specific supplements.