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Property and Casualty Insurance LicenseProperty and Casualty Insurance LicenseIntroduction
Welcome to Property and Casualty Insurance License Exam Cram! Whether this is your first or your fifteenth Exam Cram series book, you'll find information here that will help ensure your success as you pursue knowledge, experience, and certification. This introduction explains state insurance licensing programs in general and talks about how the Exam Cram series can help you prepare for your state insurance licensing exam. Chapters 119 are designed to remind you of everything you need to know in order to takeand passyour state insurance licensing exam. The two practice exams at the end of the book should give you a reasonably accurate assessment of your knowledgeand, yes, we've provided the answers and their explanations to the tests. Read the book and understand the material, and you'll stand a very good chance of passing the test.
Exam Cram books help you understand and appreciate the subjects and materials you need to pass state insurance licensing exams. Exam Cram books are aimed strictly at test preparation and review. They do not teach you everything you need to know to pass the exam. Instead, this book presents and dissects the questions and problems you're likely to encounter on a test. We've worked to bring together as much information as possible about state insurance licensing exams into one study guide that includes everything you need to prepare the exams.
Nevertheless, to completely prepare yourself for any state insurance licensing test, we recommend that you follow the recommendations in the Self-Assessment included in this book, immediately following this introduction. The review questions, practice exams, and optional study materials described in the Self-Assessment can help you evaluate your knowledge base against the requirements for a state insurance licensing exam under both ideal and real circumstances.
Based on what you learn from the Self-Assessment, you might decide to begin your studies with some more comprehensive self-study or classroom training, some practice with state insurance exam simulators, or an audio review program. On the other hand, you might decide to pick up and read one of the many study guides available from third-party vendors on certain
topics. We also recommend that you supplement your study program with a visit to your state insurance department's website to get all the details about how to obtain your insurance license as well as how to schedule and take your insurance licensing exam.
Getting an Insurance License
Licensing is the way governments ensure that only qualified individuals are allowed to practice certain important professions, such as being an insurance producer. Because insurance is regulated primarily at the state level, the rules for getting an insurance license vary somewhat from state to state.
Every state requires individuals to pass a qualification exam to get an insurance license. In addition, most states require individuals to meet a "pre-licensing education requirement" before they can take the qualification exam. In some states, the pre-licensing education requirement can be met through an approved self-study coursethat is, you buy a book that has been approved in advance by the state insurance department and take an exam (not to be confused with the licensing qualification exam) that you send in to be graded. In other states, the pre-licensing education requirement can only be met by attending an approved classroom course.
Note - This Exam Cram text is not approved to meet the pre-licensing education requirement in any specific state. It is designed only as a supplementary aid to help you pass the state insurance licensing exam.
Besides fulfilling any pre-licensing education requirement and passing the licensing exam, insurance license candidates must also submit a license application to their state insurance department and have it approved. In some states, the license application must be submitted before taking the license qualification exam; in some states, it must be submitted after passing the exam. Call your state insurance department's licensing division or visit its website to find out what you need to do in your state.
Taking a Licensing Exam
As with other aspects of insurance licensing, specific instructions on how to register for your qualification exam are available from the insurance department. Ask for a licensing information bulletin or a licensing candidate handbook, which will describe where and when exams are given, the fees you must pay, and the testing procedures.
One thing all state insurance qualification exams have in common is that they are "closed book" exams. You will not be allowed to take any study materials or notes into the testing room. Even phones and calculators may not be allowed. In some states, the only items exam candidates are permitted to take into the testing room are their wallet and keys.
In most states, insurance qualification exams are given on computers. However, you will not need any computer or typing skills to take the exam. You will be instructed how to answer questions and given a short practice test to get comfortable with the equipment before the actual qualification exam begins.
When you complete a computer-administered exam, the software tells you immediately whether you've passed or failed. Your states will have rules for retesting in the event you don't pass. Those rules are described in your licensing information bulletin/candidate handbook.
How to Prepare for an Exam
Whether or not your state has a pre-licensing education requirement, you'll want to study in preparation for the license qualification exam. And even if your state has a pre-licensing education requirement, you'll probably want to do some additional studying to make sure that you are fully prepared for the exam. Your options for additional study include the following:
- Self-study courses: Publishers such as BISYS Education Services offer courses designed to allow you to study on your own for the licensing qualification exam. BISYS license training packages are available in either web-based or print-based formats and contain a number of components:
- A Property-Casualty Concepts text that covers all the nonstate-specific topics on the licensing exam
- Practice exams that help you evaluate your comprehension of the material in the Concepts text
- Explanations to answers on the practice exams so that you'll know why each of your responses was right or wrong
- A state insurance law digest that covers all the state-specific topics on the licensing exam
- An optional audio CD review program that reviews the key information contained in the Concepts text
- An optional exam simulator that gives you additional question-and-answer practice over the material covered in the Concepts text and the state insurance law digest
- Classroom training: Many colleges and commercial training companies offer classroom training for insurance license exams. Although classroom training generally costs considerably more than self-study, some individuals find that they learn best in a classroom situation. And of course, in many states, the pre-licensing education requirement must be met with classroom study in any case.
- Other sources: There's no shortage of materials available on insurance topics. Appendix B, "Need to Know More" will give you an idea of where we think you should look for further discussion.
In addition, Que Publishing's Exam Cram
insurance licensing preparation materials are useful in your quest for insurance knowledge. Exam Cram books provide you with a review of the essential information you need to know to pass the tests. They focus the detailed information in the Concepts texts available from BISYS Education Services. Together, the BISYS Education Services license training packages and the Exam Cram review materials create a powerful exam preparation program.
This set of required and recommended materials represents an unparalleled collection of sources and resources for insurance licensing qualification and related topics. Our hope is you'll find that this book belongs in that company.
What This Book Will Not Do
This book by itself will not teach you everything you need to know to pass your insurance licensing exam. It does not cover the state-specific topics that appear on the exam, usually dealing with laws that apply only in your particular state. That information, although it represents a small proportion of the entire exam, is critical to passing the exam. State-specific topics are covered in the state insurance law digests available from BISYS Education Services. This book reviews the rest of what you need to know before you take the test, with the fundamental purpose dedicated to reviewing the nonstate-specific information on the insurance licensing exam.
What This Book Is Designed to Do
This book uses a variety of teaching and memorization techniques to analyze the exam-related topics and to provide you with ways to input, index, and retrieve what you'll need to know in order to pass the test.
This book is designed to be read as a pointer to the areas of knowledge you will be tested on. In other words, you might want to read the book one time, just to get an insight into how comprehensive your knowledge of insurance is. The book is also designed to be read shortly before you go for the actual test and to give you a distillation of the topics covered by the exam in as few pages as possible. We think that you can use this book to get a sense of the underlying context of any topic in the chaptersor to skim read for Exam Alerts, bulleted points, summaries, and topic headings.
We've drawn on material from each state's exam outlines and from other preparation guides, in particular, BISYS Education Services' Property-Casualty Concepts text. Our aim is to walk you through the knowledge you will needlooking over your shoulder, so to speakand point out those things that are important for the exam (Exam Alerts, practice questions, and so on).
We've tried to demystify insurance jargon, acronyms, terms, and concepts. Also, wherever we think you're likely to blur past an important concept, we've defined the assumptions and premises behind that concept.
About This Book
We've structured the topics in this book to build upon one another. Therefore, the topics covered in later chapters might refer to previous discussions in earlier chapters. We suggest that you read this book from front to back.
After you read the book, you can brush up on a certain area by using the Index or the Table of Contents to go straight to the topics and questions you want to reexamine. We've tried to use the headings and subheadings to provide outline information about each given topic. After you've passed the exam and obtained your insurance license, we think that you'll find this book useful as a tightly focused reference and an essential foundation of insurance information.
Each Exam Cram chapter follows a standard structure, along with graphical cues about especially important or useful material. The structure of a typical chapter is as follows:
- Opening hotlists: Each chapter begins with lists of the terms you'll need to understand and the concepts you'll need to master before you can be fully conversant with the chapter's subject matter.
- Topical coverage: After the opening hotlists, each chapter covers the topics related to the chapter's subject.
- Alerts: Throughout the topical coverage section, we highlight material most likely to appear on the exam by using a special Exam Alert layout that looks like this:
Caution - This is what an Exam Alert looks like. An Exam Alert stresses concepts or terms that will most likely appear in one or more license exam questions. For that reason, we think any information found offset in Exam Alert format is worthy of unusual attentiveness on your part.
Even if material isn't flagged as an Exam Alert, all the content in this book is associated in some way with test-related material. What appears in the chapter content is critical knowledge.
- Notes: This book is an overall examination of entry-level insurance knowledge. As such, we'll touch on many aspects of insurance that open doors for further inquiry. Where a topic goes deeper than the scope of the book, we use notes to indicate areas of concern or further training.
Note - Cramming for an exam will get you through a test, but it won't make you a fully competent insurance professional. Although you can memorize just the facts you need in order to become licensed, your daily work in the field will rapidly put you in water over your head if you don't continue your insurance education.
- Review questions: At the end of each chapter is a short list of test questions related to that chapter's topic. Each question has a following explanation of both correct and incorrect answers. The practice questions highlight the areas we found to be most important on the exam.
- Need to Know More: On the CD-ROM is an appendix titled "Need To Know More." This appendix provides pointers to resources that we found to be helpful in offering further details on the book's subject matter. If you find a resource you like in this collection, use it, but don't feel compelled to use all these resources. In this appendix, we recommend resources that we have used on a regular basis, so none of the recommendations will be a waste of your time or money. These resources might go out of print or be taken down (in the case of websites), so we've tried to reference widely accepted resources.
The bulk of the book follows this chapter structure, but there are a few other elements that we would like to point out:
- Practice exams: The practice exams, which appear in Chapters 20 and 22 (with answer keys in Chapters 21 and 23), are intended to test your comprehension of the material in this book. They are also intended to be in a similar format and degree of difficulty as the questions you are likely to see on the license exam. However, because the questions on the actual exam are kept highly confidential, you should expect that the questions on the actual license exam will be ones that you have never seen before.
- Quick Check answer keys: These provide the answers to the practice exams, complete with explanations of both the correct and incorrect responses.
- Glossary: This is an extensive glossary of important terms used in this book.
- The Cram Sheet: This appears as a tear-away sheet, inside the front cover of this Exam Cram book. It is a valuable tool that represents a collection of the most difficult-to-remember facts, terms, and concepts we think you should memorize before taking the test.
You might want to look at the Cram Sheet in your car or in the lobby of the testing center just before you walk into the testing center. The Cram Sheet is divided under headings, so you can review the appropriate parts just before each test.
- The CD: The CD contains the BISYS Education Services Exam Simulator, Preview Edition software. The Preview Edition exhibits most of the functionality of the commercially available version, but offers a reduced number of unit review questions and a 50-question practice exam. To get the complete set of practice questions and 100-question exam functionality, visit http://www.bisyseducation.com or call 1-800-241-9095.
We tried to create a real-world tool that you can use to prepare for and pass your state insurance licensing exam. We're interested in any feedback you would care to share about the book, especially if you have ideas about how we can improve it for future test takers. We'll carefully consider everything you say and will respond to all reasonable suggestions and comments. You can reach us via email at firstname.lastname@example.org.
Let us know if you found this book to be helpful in your preparation efforts. We'd also like to know how you felt about your chances of passing the exam before you read the book and then after you read the book. Of course, we'd love to hear that you passed the examand even if you just want to share your triumph, we'd be happy to hear from you.
Thanks for choosing us as your license exam preparation coach, and enjoy the book. We wish you luck on the exam, but we know that if you read through all the chapters and work with the product, you won't need luckyou'll pass the test on the strength of real knowledge!
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