NC Life Insurance Exam Prep Questions and Answers
Already Passed
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner
A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT
Sharing commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide?
Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance
Is guilty of a misdemeanor
A person is required to be AT LEAST how old before he or she is licensed as an
agent in NC?
18
In a life insurance policy, which feature states that the policy will not cover
certain risks?
Exclusion
Whole Life insurance are contractually guaranteed to provide each of the
following EXCEPT?
Partial withdrawal features beyond a surrender charge period
A term life insurance policy matures
Upon the insured's death during the term of the policy
Which of these provisions require proof of insurability after a policy has lapsed?
Reinstatement
How does a typical Variable Life Policy Investment account grow?
Through mutual funds, stocks, and bonds
Circulation of any oral or written statement or any pamphlet, circular, article or
literature that is false or maliciously critical of or derogatory to the financial
condition of an insurer is known as
Defamation
All of the following are considered characteristics describing the nature of an
insurance contract EXCEPT
Bilateral
A 15-year mortgage is best protected by what kind of life policy?
15-year decreasing term
Companies in NC may transact solicitations for insurance ONLY through
Licensed agents
Which of these retirement plans can be started by an employee, even if another
plan is in existence
Individual Retirement Account (IRA)
A life policy with a death benefit that can fluctuate according to the performance
of its underlying investment portfolio is referred to as
Variable life
,If an annuity is terminated prior to the beginning of the income payment period,
the contract owner receives
The contract surrender value at that time
A provision in a life insurance policy that pays the policy owner an amount that
doesn't surpass the guaranteed cash value is called the
Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage?
At future dates specified in the contract with no evidence of insurability required
T, age 70, withdrawals cash from a profit-sharing plan and purchases a Straight
Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner
A level premium indicates
The premium is fixed for the entire duration of the contract
K has a life insurance policy where her husband is beneficiary and her daughter
is contingent beneficiary. Under the Common Disaster clause, if K and her
husband are both killed in an automobile accident, where would the death
proceeds be directed?
Daughter
Which of the following statements is correct about the period in which a Term
Policy can be converted?
It can be changed by the insured
What group term life feature permits an individual to depart from the group and
continue to be converted without providing evidence of insurability?
Conversion
An insured covered by life insurance has just died. What will happen if the
primary beneficiary had already died before the insured and contingent
beneficiary?
Proceed will go to the contingent beneficiary
S buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100.
S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What
kind of rider did S include on the policy?
Return of Premium rider
One of the stated purposes of the Life and Health Insurance Guaranty
Association is to
Assist in the prevention of insurer insolvencies
The following acts are examples of unfair methods of competition and deceptive
practices in the business of insurance EXCEPT the use for
Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage?
Variable universal life
Under a renewable term policy,
The renewal premium is calculated on the basis of the insured's attained age
Additional coverage can be added to a Whole Life policy by adding a(n)
Decreasing term rider
, The rules and regulations of the Life and Health Insurance Guaranty Association
in NC apply to
Life and Health policies insured by companies authorized in NC
What type of life policy covers 2 people and pays upon the death of the last
insured?
Survivorship
K works for XYZ clothing store from September through December each year. K
works 4 hours a week for this period of time. The employer's Group Policy would
consider K
Not eligible for the insurance because as a seasonal employee K doesn't meet the
definition of "employee" under NC law
A written agreement to provide a Life Insurance Policyholder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a
Viatical Settlement
When an employee is terminated, which statement about a group term life
conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
A 42 year old executive wants to purchase life insurance that will allow for
increases or decreases to coverage as his/her needs change. Which of the
following policies will best meet this need?
Universal life
What kind of life insurance policy pays a specified monthly income to a
beneficiary for 30 years and then pays a lump sum benefit at the end of that 30
years?
Family Maintenance Policy
The fund that assures policyholders payment of death benefits on Life Policies, if
the company is insolvent at the same time of the claim, is called the
Life and Health Insurance Guaranty Association
A policy that becomes a Modified Endowment Contract (MEC)
Will lose many of its tax advantage
Which provision allows the policy owner to change a term life policy to a
permanent one without providing proof of health?
Conversion
T applies for a life insurance policy and is told by the producer that the insurer is
bound to the coverage as of the date of the application or medical examination,
whichever is later. Assuming that T is an acceptable risk, what item is given to T?
Conditional receipt; Binds the insurer to coverage as of the date of the application or
medical exam, provided the proposed insured is determined to be an acceptable risk.
An insurance company MUST clearly specify questions designed to obtain
information solely for marketing research
In any insurance transactions
In a life insurance policy which provision states who may select policy options,
designate and name a beneficiary, and be the recipient of any financial benefits
from the policy?
Owner's rights
No insurer shall refuse to insure an individual because of
Already Passed
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner
A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT
Sharing commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide?
Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance
Is guilty of a misdemeanor
A person is required to be AT LEAST how old before he or she is licensed as an
agent in NC?
18
In a life insurance policy, which feature states that the policy will not cover
certain risks?
Exclusion
Whole Life insurance are contractually guaranteed to provide each of the
following EXCEPT?
Partial withdrawal features beyond a surrender charge period
A term life insurance policy matures
Upon the insured's death during the term of the policy
Which of these provisions require proof of insurability after a policy has lapsed?
Reinstatement
How does a typical Variable Life Policy Investment account grow?
Through mutual funds, stocks, and bonds
Circulation of any oral or written statement or any pamphlet, circular, article or
literature that is false or maliciously critical of or derogatory to the financial
condition of an insurer is known as
Defamation
All of the following are considered characteristics describing the nature of an
insurance contract EXCEPT
Bilateral
A 15-year mortgage is best protected by what kind of life policy?
15-year decreasing term
Companies in NC may transact solicitations for insurance ONLY through
Licensed agents
Which of these retirement plans can be started by an employee, even if another
plan is in existence
Individual Retirement Account (IRA)
A life policy with a death benefit that can fluctuate according to the performance
of its underlying investment portfolio is referred to as
Variable life
,If an annuity is terminated prior to the beginning of the income payment period,
the contract owner receives
The contract surrender value at that time
A provision in a life insurance policy that pays the policy owner an amount that
doesn't surpass the guaranteed cash value is called the
Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage?
At future dates specified in the contract with no evidence of insurability required
T, age 70, withdrawals cash from a profit-sharing plan and purchases a Straight
Life Annuity. What will this transaction provide?
Income that cannot be outlived by the owner
A level premium indicates
The premium is fixed for the entire duration of the contract
K has a life insurance policy where her husband is beneficiary and her daughter
is contingent beneficiary. Under the Common Disaster clause, if K and her
husband are both killed in an automobile accident, where would the death
proceeds be directed?
Daughter
Which of the following statements is correct about the period in which a Term
Policy can be converted?
It can be changed by the insured
What group term life feature permits an individual to depart from the group and
continue to be converted without providing evidence of insurability?
Conversion
An insured covered by life insurance has just died. What will happen if the
primary beneficiary had already died before the insured and contingent
beneficiary?
Proceed will go to the contingent beneficiary
S buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100.
S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What
kind of rider did S include on the policy?
Return of Premium rider
One of the stated purposes of the Life and Health Insurance Guaranty
Association is to
Assist in the prevention of insurer insolvencies
The following acts are examples of unfair methods of competition and deceptive
practices in the business of insurance EXCEPT the use for
Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage?
Variable universal life
Under a renewable term policy,
The renewal premium is calculated on the basis of the insured's attained age
Additional coverage can be added to a Whole Life policy by adding a(n)
Decreasing term rider
, The rules and regulations of the Life and Health Insurance Guaranty Association
in NC apply to
Life and Health policies insured by companies authorized in NC
What type of life policy covers 2 people and pays upon the death of the last
insured?
Survivorship
K works for XYZ clothing store from September through December each year. K
works 4 hours a week for this period of time. The employer's Group Policy would
consider K
Not eligible for the insurance because as a seasonal employee K doesn't meet the
definition of "employee" under NC law
A written agreement to provide a Life Insurance Policyholder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a
Viatical Settlement
When an employee is terminated, which statement about a group term life
conversion is true?
Policy proceeds will be paid if the employee dies during the conversion period
A 42 year old executive wants to purchase life insurance that will allow for
increases or decreases to coverage as his/her needs change. Which of the
following policies will best meet this need?
Universal life
What kind of life insurance policy pays a specified monthly income to a
beneficiary for 30 years and then pays a lump sum benefit at the end of that 30
years?
Family Maintenance Policy
The fund that assures policyholders payment of death benefits on Life Policies, if
the company is insolvent at the same time of the claim, is called the
Life and Health Insurance Guaranty Association
A policy that becomes a Modified Endowment Contract (MEC)
Will lose many of its tax advantage
Which provision allows the policy owner to change a term life policy to a
permanent one without providing proof of health?
Conversion
T applies for a life insurance policy and is told by the producer that the insurer is
bound to the coverage as of the date of the application or medical examination,
whichever is later. Assuming that T is an acceptable risk, what item is given to T?
Conditional receipt; Binds the insurer to coverage as of the date of the application or
medical exam, provided the proposed insured is determined to be an acceptable risk.
An insurance company MUST clearly specify questions designed to obtain
information solely for marketing research
In any insurance transactions
In a life insurance policy which provision states who may select policy options,
designate and name a beneficiary, and be the recipient of any financial benefits
from the policy?
Owner's rights
No insurer shall refuse to insure an individual because of
