Earning your CPCU® designation can help you advance your insurance career, but you must first complete a number of courses that can be quite challenging. In this post, we’ll go over everything you need to know about the CPCU 556 course and give you tips on how to pass this exam.

What’s in this post

• About CPCU 556
  • What is the CPCU program?
  • What is CPCU 556?
  • How difficult is CPCU 556?
  • About the CPCU 556 exam
  • Topics covered in CPCU 556
  • Topics you are most likely to see on the CPCU 556 exam
• Tips for passing CPCU 556 exam
• Buy our CPCU 556 study guide bundle

CPCU 556 Study Guide e-Bundle – $39.99

What is the CPCU program?

The Chartered Property Casualty Underwriter (CPCU®) is a professional designation offered by an organization called The Institutes. After completing the program, you will have a solid understanding of how insurance industry works and can display the CPCU designation on your business cards, resume, etc.

Having this designation shows that you have done extra education, which can make you a stronger candidate for hire or promotion. Also, this might give customers, colleagues, and business partners more confidence in working with you because they know you have this foundational knowledge.

What is CPCU 556?

CPCU 556 is one of four concentration courses you may choose from earn your CPCU designation. Whether you are pursuing the traditional CPCU path or the ARM to CPCU path, all students must choose between completing the commercial lines concentration courses or the personal lines concentration courses. CPCU 556 is one of the two personal lines concentration courses.

More specifically, this course is about how personal lines insurers manage their portfolios to maximize long-term profitability. The knowledge you gain from this course will help you understand the key considerations that insurers have to take into account when doing their strategic planning and what specific strategies they can use to capitalize on opportunities or mitigate threats.

How difficult is CPCU 556?

The content in CPCU 556 is relatively straight-forward and easy to understand. However, the course content is written almost as if it assumes you already have an understanding of how an insurance company operates. If you do not have that background information, you will probably encounter terms or broader concepts that are unfamiliar to you (example: loss ratio, expense ratio). That may require you to do additional research to learn what those terms are referring to.

About the CPCU 556 exam

In order to demonstrate that you have understood the material from this course, you will need to pass an online exam administered by The Institutes.

You must go through The Institutes' website to purchase and formally register for your exam. When registering, you must indicate which test window you plan to take the exam during. The four test windows that are available every year are:

• January 15 to March 15
• April 15 to June 15
• July 15 to September 15
• October 15 to December 15

You may pay for your exam fee at any time, and those who register before the test window opens will usually receive a discount. However, you can only launch the exam and complete it during the test window you chose at the time of purchase. If you need to reschedule your exam, a new fee will apply.

The exam consists of 50 questions that cover all the chapters from the course, with a time limit of 65 minutes. The exam is done online, and you must get a score of 70% or better to pass. You may retake the exam (and pay a new fee) if you do not pass, but please check The Institutes' policies regarding how often and how soon you can retake the exam, as that may change from time to time.

CPCU 556 Study Guide e-Bundle – $39.99

• Based on CPCU 556: Building a Competitive Edge in Personal Lines [1st edition]
• Delivered by email after purchase as downloadable PDF
• For buyer's personal use only (non-transferrable and not for resale)
• (NOTE: this will be the only IEG product available for CPCU 556 as we will not be developing a full study program for CPCU 556)

Topics covered in CPCU 556

• Insurance marketing strategies
• Analyzing risk exposures for:
  • Personal auto
  • Residential property
  • Liability risks
  • Personal inland marine insurance
  • Personal watercraft
  • Personal umbrella policies
• Establishing underwriting goals
• Business strategies for:
  • Growing premiums
  • Decreasing loss costs
  • Controlling expenses
• Tiered-rating underwriting
• Product life cycle management
• Key insurance business indicators
• Making corrective changes to an insurance business portfolios
• Cost-benefit analyses

Topics you are most likely to see on the CPCU 556 exam

The following list is based on student feedback regard what topics they felt were most heavily-featured on their exam.

Please remember that this is not a comprehensive list of all the topics that will be tested, and each person’s exam may different. Any of the material covered in the course may potentially appear on your exam, so you should prepare accordingly.

• Types of market segmentation (national, retail, group, niche)
• Customer retention strategies
• Info used for underwriting personal auto exposures
• Factors that increase risk for autos & miscellaneous vehicles
• Fire losses for residential risks
• Factors that increase risk for personal liability exposures
• Factors that affect insurability for watercrafts
• Negative effects of various underwriting strategies
• Goals/features of tiered-rating underwriting
• Key indicators of underwriting strength (policies in force, new policy count / business count, policy retention)

CPCU 556 Study Guide e-Bundle – $39.99

 Tips for passing CPCU 556

1) Take CPCU 520 before taking CPCU 556

CPCU 556 is all about the strategic decisions that personal lines insurers have to make. As part of that discussion, the course will cover how an insurer’s different departments contribute to different types of initiatives, and also how different strategic decisions can impact the insurer’s various metrics.

CPCU 520 covers how each department within an insurance company functions, and also goes over the key performance metrics for insurance companies. In that way, CPCU 556 builds upon the concepts you learn about in CPCU 520.

For example, CPCU 556 might say that a certain strategy will hurt the insurer’s loss ratio, but the course never defines what a loss ratio is. Instead, CPCU 520 covers the loss ratio in great detail. Although you are not necessarily being tested on the loss ratio in CPCU 556, it is always possible that you might encounter a question where knowing what the loss ratio is would have helped you infer the correct answer. 

2) Take CPCU 555 before CPCU 556

CPCU 555 discusses various types of personal lines insurance products, explaining what those products cover and the benefits they provide to insureds. CPCU 556 looks at the same products but from a different angle, that of the insurer’s business side.

In CPCU 556, the course will explain what an insurer’s underwriters have to consider given the risks that the insurer is covering with that kind of policy or product. If you understand the policy/product beforehand, it makes a lot of sense why underwriters consider the things they do; this can help you more easily infer the right answer when you are taking your actual exam.

CPCU 556 Study Guide e-Bundle – $39.99

• Based on CPCU 556: Building a Competitive Edge in Personal Lines [1st edition]
• Delivered by email after purchase as downloadable PDF
• For buyer's personal use only (non-transferrable and not for resale)
• (NOTE: this will be the only IEG product available for CPCU 556 as we will not be developing a full study program for CPCU 556)

3) Don’t waste too much time on long questions or questions that you are stuck on

Every test question is worth only one point, no matter how simple or complex it is. If you find that you are spending a lot of time on one particular problem, you are better off guessing for now and using the option to flag the question so you can return to it later. You don’t want to spend so much time that you run out of time before you can get to all the other questions that might have been easier for you to score points on.

4) Put an answer for every question

You do not get minus points for getting a question wrong, so don’t leave any questions blank.

CPCU 556 Study Guide e-Bundle – $39.99

5) Get as much practice as possible

The best way to ensure that you know how to apply the concepts you learning is to practice doing so, and practice quizzes are the perfect way to do this. On top of that, doing practice questions gets you comfortable with seeing the concepts in the same question-answer format you will see on your exam.

The Institutes’ online course includes tons of practice questions and you should do them all. The Institutes’ also offers a separate Smart QuizMe app that includes an entire bank of practice questions for every course. The app is free to download but you need to pay a small fee (about $10 per course at the time of this writing) to access the full bank of questions for any particular course.

NOTE: As of this writing (January 18, 2024), the Smart QuizMe app has not been updated yet to reflect the updated content in the latest version of CPCU 556. To the best of our knowledge, The Institutes has not confirmed when the app will be updated, but we do recommend utilizing it once the updated practice questions are available.

6) Aim to understand the practice questions and not just memorize them

The questions on the actual exam are not made up of the practice questions, so you cannot just rely on memorizing those answers for any practice quizzes and simulated exams you take. Read each explanation and re-review the material until you understand why you got a question wrong.

7) Don’t rely solely on The Institutes’ study materials

The Institutes’ way of explaining things is not necessarily the best way, so take advantage of other resources available to you. Some students don’t use The Institutes’ study materials at all and prefer to go with another study option, such as our comprehensive study materials. We use plain English to explain all of the concepts, include helpful examples so you can see how they apply in real life, and show you how different elements of something relate to one another.

You can also turn to Google and YouTube to look for explanations and examples from other sources too.

8) Join the CPCU Candidates Facebook group

One of the best things you can do during your CPCU journey is to join the CPCU Candidates Facebook group, which is a wonderful community of current and former CPCU students. Here, you can get help with test questions that might be stumping you, ask for advice on propelling your insurance career, and find a healthy dose of moral support and motivation.

Earning your CPCU® designation can help you advance your insurance career, but you must first complete a number of courses that can be quite challenging. In this post, we’ll go over everything you need to know about the CPCU 555 course and give you tips on how to pass this exam.

What’s in this post

• About CPCU 555
  • What is the CPCU program?
  • What is CPCU 555?
  • How difficult is CPCU 555?
  • About the CPCU 555 exam
  • Topics covered in CPCU 555
  • Topics you are most likely to see on the CPCU 555 exam
• Tips for passing CPCU 555 exam
• Buy our CPCU 555 study guide bundle

CPCU 555 Study Guide e-Bundle – $49.99

What is the CPCU program?

The Chartered Property Casualty Underwriter (CPCU®) is a professional designation offered by an organization called The Institutes. After completing the program, you will have a solid understanding of how insurance industry works and can display the CPCU designation on your business cards, resume, etc.

Having this designation shows that you have done extra education, which can make you a stronger candidate for hire or promotion. Also, this might give customers, colleagues, and business partners more confidence in working with you because they know you have this foundational knowledge.

What is CPCU 555?

Whether you are pursuing the traditional CPCU path or the ARM to CPCU path, all students must choose between completing the commercial lines concentration courses or the personal lines concentration courses. CPCU 555 is one of the two personal lines concentration courses.

More specifically, this course is about various types of personal lines insurance products that are available, as well as how to incorporate insurance into personal financial planning. The knowledge you gain from this course will help you understand what types of products are available to help individuals and families get insurance protection, and how coverage typically applies for each of those policies.

How difficult is CPCU 555?

There are several major factors that make CPCU 555 one of the most difficult courses in the CPCU program:

• Sheer amount of detail: CPCU 555 may have the most content out of all the CPCU courses, and the exam does include questions on the finer nuances of each topic. This means you need to be familiar with even the smallest details and can’t get by with only a high-level understanding.
• Numerous close similarities: In this course, there are lot of products and concepts that are super similar in terms of their name or how they function, which makes it very easy to mix them up. For example, the course will cover the Snowmobile endorsement (which is for personal auto policies) and the Owned Snowmobile endorsement (which is for homeowners policies). Keeping all of the very-similar terms straight can be very tricky.
• Endorsements: Endorsements are always a tricky topic to study because they modify the standard terms of a policy contract language. This means you have to remember what the normal terms are and how each endorsement changes those terms.
• Putting it all together: Many of the exam questions involve determining which coverage form is best suited for covering a particular exposure, or whether or not a particular loss scenario would be covered. This requires you to be familiar with ALL the policy forms so that you can decide either which one is the best option for a situation or how all the forms will interact to affect coverage for that loss scenario. This type of applied learning is far more difficult than just memorizing and regurgitating isolated facts.
• Personal finance chapter: For many students, chapter 5 feels totally out of left field because it has almost nothing to do with insurance.  Instead, this chapter talks about financial planning and investing. Knowing a client’s financial situation might be somewhat helpful in assessing their insurance needs, but not so much that you would expect an entire chapter to be devoted to it. The nature of the content feels pretty different too. While the rest of the course centers around looking at specific policy provisions and understanding how they affect coverage, Chapter 5 is essentially a laundry list of different types of investments.

Our study guide bundle and bonus printables are the perfect supplement to The Institutes’ course, and serves as a super-effective tool for helping you quickly but thoroughly review everything you need to know before test time:

• Comprehensive 80+ study guide
• Policy summary sheets
• Comparison sheets for HO3 vs DP3 policies, 529 plans vs Coverdell ESAs
• Visual cheat sheets
• Practice problems for calculating rate of return
• Extra lessons to give you helpful background knowledge that will improve your understanding of the materials

About the CPCU 555 exam

In order to demonstrate that you have understood the material from this course, you will need to pass an online exam administered by The Institutes.

You must go through The Institutes' website to purchase and formally register for your exam. When registering, you must indicate which test window you plan to take the exam during. The four test windows that are available every year are:

• January 15 to March 15
• April 15 to June 15
• July 15 to September 15
• October 15 to December 15

You may pay for your exam fee at any time, and those who register before the test window opens will usually receive a discount. However, you can only launch the exam and complete it during the test window you chose at the time of purchase. If you need to reschedule your exam, a new fee will apply.

The exam consists of 50 questions that cover all the chapters from the course, with a time limit of 65 minutes. The exam is done online, and you must get a score of 70% or better to pass. You may retake the exam (and pay a new fee) if you do not pass, but please check The Institutes' policies regarding how often and how soon you can retake the exam, as that may change from time to time.

CPCU 555 Study Guide e-Bundle – $49.99

• Based on CPCU 555: Advancing Personal Insurance Products [1st edition]
• Delivered by email after purchase as downloadable PDF
• For buyer's personal use only (non-transferrable and not for resale)
• (NOTE: this will be the only IEG product available for CPCU 555 as we will not be developing a full study program for CPCU 555)

Topics covered in CPCU 555

• Homeowners insurance
• Dwelling policies
• Personal Auto Policy (PAP)
• Inland marine insurance
• Coverage for miscellaneous vehicles
• Mobile home insurance
• Personal watercraft insurance
• Financial planning
• Types of investments
• Life insurance
• Health insurance
• Disability insurance
• Long-term care insurance

Topics you are most likely to see on the CPCU 555 exam

The following list is based on student feedback regard what topics they felt were most heavily-featured on their exam.

Please remember that this is not a comprehensive list of all the topics that will be tested, and each person’s exam may different. Any of the material covered in the course may potentially appear on your exam, so you should prepare accordingly.

• HO3 policy conditions
• Differences between homeowners policies and dwelling policies
• National Flood Insurance Program
• Whose policy is primary in various loss scenarios
• Which parties’ injuries would be excluded in various loss scenarios
• Miscellaneous vehicle endorsements
• Mobile home insurance
• Personal finance life cycle
• Types of stocks
• Differences between term life insurance and permanent nature of life insurance
• Differences between various health insurance plan options
• Key provisions in disability policies

CPCU 555 Study Guide e-Bundle – $49.99

• Based on CPCU 555: Advancing Personal Insurance Products [1st edition]
• Delivered by email after purchase as downloadable PDF
• For buyer's personal use only (non-transferrable and not for resale)
• (NOTE: this will be the only IEG product available for CPCU 555 as we will not be developing a full study program for CPCU 555)

Tips for passing CPCU 555

1) Look up actual policy forms to see how they are organized and the exact language they use

The Institutes’ paraphrases most of the standard policy terms and sections, but it can sometimes be more helpful to see how things are worded in the actual policy form itself. Most insurance policies are based on standard starting templates that nearly all insurers use, and it is pretty easy to find samples online. Just search for the policy type as a PDF (ex: “personal auto policy form filetype:pdf”) and take a look at the real language used.

2) Keep track of how coverage applies under the standard policy form and how each endorsement amends the standard policy to apply coverage differently

This course will cover a TON of endorsement forms. It is NOT enough to simply know what coverage the endorsement provides; you need to understand HOW the endorsement amends the policy to provide that coverage or change. For example, does it modify a definition? Does it add totally new terms? Which policy form does it have to be attached to?

CPCU 552 Study Guide e-Bundle – $49.99

3) Don’t waste too much time on long questions or questions that you are stuck on

Every test question is worth only one point, no matter how simple or complex it is. If you find that you are spending a lot of time on one particular problem, you are better off guessing for now and using the option to flag the question so you can return to it later. You don’t want to spend so much time that you run out of time before you can get to all the other questions that might have been easier for you to score points on.

4) Put an answer for every question

You do not get minus points for getting a question wrong, so don’t leave any questions blank.

5) Get as much practice as possible

The best way to ensure that you know how to apply the concepts you are learning is to practice doing that, and practice quizzes are the perfect way to test your understanding. The Institutes’ course does include practice questions, which you should keep reattempting until you are confident you understand the concepts that you are being quizzed on.

The Institutes used to have a Smart QuizMe app that also provided practice questions, but they have since removed the question banks for all the current CPCU & AINS courses from the app. At this time, we do not think that The Institutes will be updating their app to include CPCU & AINS question banks since they have not announced any specific plans to do so.

CPCU 555 Study Guide e-Bundle – $49.99

• Based on CPCU 555: Advancing Personal Insurance Products [1st edition]
• Delivered by email after purchase as downloadable PDF
• For buyer's personal use only (non-transferrable and not for resale)
• (NOTE: this will be the only IEG product available for CPCU 555 as we will not be developing a full study program for CPCU 555)

6) Aim to understand the practice questions and not just memorize them

The questions on the actual exam are not made up of the practice questions, so you cannot just rely on memorizing those answers for any practice quizzes and simulated exams you take. Read each explanation and re-review the material until you understand why you got a question wrong.

7) Don’t rely solely on The Institutes’ study materials

The Institutes’ way of explaining things is not necessarily the best way, so take advantage of other resources available to you. Some students don’t use The Institutes’ study materials at all and prefer to go with another study option, such as our comprehensive study materials. We use plain English to explain all of the concepts, include helpful examples so you can see how they apply in real life, and show you how different elements of something relate to one another.

You can also turn to Google and YouTube to look for explanations and examples from other sources too.

8) Join the CPCU Candidates Facebook group

One of the best things you can do during your CPCU journey is to join the CPCU Candidates Facebook group, which is a wonderful community of current and former CPCU students. Here, you can get help with test questions that might be stumping you, ask for advice on propelling your insurance career, and find a healthy dose of moral support and motivation.

CPCU 555 Study Guide e-Bundle – $49.99