I would strongly advise against using big words for the sake of using big words to make yourself look smart, because you won't look smart, you will just look like a wanker.
tl;dr use big words only when doing legal writing.
Or in VCE English IMO. I've said this before, and good 'VCE English' isn't good 'English'. Examiners read exams so bloody fast that if you don't have a couple of these used relevantly, your piece kind of blends in to a sea of mediocrity. Good English normally entails getting the message across clearly, which involves dumbing things down; but obviously the reverse occurs in VCE English (try it and you'll see). I'd say this is the reason why a heap of people who are great at English don't get the marks they deserve. Also keep in mind that a criteria for 9 and 10's are a sophisticated use of the English langauge, and from what I know, this definitely involves using SOME (just don't overdo it or you look like a tool).
Yes it is beneficial if you use a select few big words, but it's not the most important thing to focus on during the exams. The content is the most important, and if you can enhance what you're saying with sophisticated language then + points for you.
That said, I didn't use any big words (that I can remember) in my language analysis essay during the exam, and I still scored pretty highly (I suppose, I haven't gotten a SoM yet) so content is priority!!!!
And yes, only use words that you know and fully understand the meaning to.
And you don't need to use big fancy words to write sophisticatedly. It's more a style of writing rather than just vocab that makes your writing appear sophisticated. Flair, I guess!