If we think the Bible teaches universal salvation, we may arrive at a false sense of assurance by reasoning as follows: Everybody is saved. I am a body. Therefore, I am saved.
Or, if we think salvation is gained by our own good works and we are further deluded into believing that we possess good works, we will have a false assurance of salvation.
To have sound assurance, we must understand that our salvation rests on the merit of Christ alone, which is appropriated to us when we embrace Him by genuine faith. If we understand that, the remaining question is, "Do I have the genuine faith necessary for salvation?"
Again, two more things must be understood and analyzed properly. The first is doctrinal. We need a clear understanding of what constitutes genuine saving faith. If we conceive of saving faith as existing in a vacuum, never yielding the fruit of works of obedience, we have confused saving faith with dead faith, which cannot save anyone.
The second requirement involves a sober analysis of our own lives. We must examine ourselves to see whether the fruit of regeneration is apparent in our lives. Do we have a real affection for the biblical Christ? Only the regenerate person possesses real love for the real Jesus. Next we must ask the tough question, "Does my life manifest the fruit of sanctification?" I test my faith by my works.
Taken from "Rejecting False Assurances" by Ligonier Ministries (used by permission).