NC LIFE INSURANCE EXAM PREP
QUESTIONS & VERIFIED ANSWERS
PASSED 100%
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner - CORRECT ANSWER A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT - CORRECT ANSWER
Sharing commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide? - CORRECT
ANSWER Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance - CORRECT
ANSWER 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? - CORRECT ANSWER 18
In a life insurance policy, which feature states that the policy will not cover certain risks?
- CORRECT ANSWER Exclusion
Whole Life insurance are contractually guaranteed to provide each of the following
EXCEPT? - CORRECT ANSWER Partial withdrawal features beyond a surrender
charge period
A term life insurance policy matures - CORRECT ANSWER Upon the insured's death
during the term of the policy
Which of these provisions require proof of insurability after a policy has lapsed? -
CORRECT ANSWER Reinstatement
How does a typical Variable Life Policy Investment account grow? - CORRECT
ANSWER 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 - CORRECT ANSWER Defamation
All of the following are considered characteristics describing the nature of an insurance
contract EXCEPT - CORRECT ANSWER Bilateral
,A 15-year mortgage is best protected by what kind of life policy? - CORRECT
ANSWER 15-year decreasing term
Companies in NC may transact solicitations for insurance ONLY through - CORRECT
ANSWER Licensed agents
Which of these retirement plans can be started by an employee, even if another plan is
in existence - CORRECT ANSWER 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 - CORRECT ANSWER Variable life
If an annuity is terminated prior to the beginning of the income payment period, the
contract owner receives - CORRECT ANSWER 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 - CORRECT ANSWER Policy Loan
Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage? - CORRECT ANSWER 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? - CORRECT ANSWER Income that cannot
be outlived by the owner
A level premium indicates - CORRECT ANSWER 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? -
CORRECT ANSWER Daughter
Which of the following statements is correct about the period in which a Term Policy can
be converted? - CORRECT ANSWER 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? - CORRECT ANSWER
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? -
CORRECT ANSWER 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? - CORRECT ANSWER Return of Premium rider
One of the stated purposes of the Life and Health Insurance Guaranty Association is to
- CORRECT ANSWER 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 - CORRECT ANSWER
Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage? - CORRECT ANSWER Variable universal life
Under a renewable term policy, - CORRECT ANSWER 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) - CORRECT
ANSWER Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty Association in NC
apply to - CORRECT ANSWER 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? -
CORRECT ANSWER 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 -
CORRECT ANSWER 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 - CORRECT
ANSWER Viatical Settlement
When an employee is terminated, which statement about a group term life conversion is
true? - CORRECT ANSWER Policy proceeds will be paid if the employee dies during
the conversion period
QUESTIONS & VERIFIED ANSWERS
PASSED 100%
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner - CORRECT ANSWER A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT - CORRECT ANSWER
Sharing commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide? - CORRECT
ANSWER Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance - CORRECT
ANSWER 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? - CORRECT ANSWER 18
In a life insurance policy, which feature states that the policy will not cover certain risks?
- CORRECT ANSWER Exclusion
Whole Life insurance are contractually guaranteed to provide each of the following
EXCEPT? - CORRECT ANSWER Partial withdrawal features beyond a surrender
charge period
A term life insurance policy matures - CORRECT ANSWER Upon the insured's death
during the term of the policy
Which of these provisions require proof of insurability after a policy has lapsed? -
CORRECT ANSWER Reinstatement
How does a typical Variable Life Policy Investment account grow? - CORRECT
ANSWER 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 - CORRECT ANSWER Defamation
All of the following are considered characteristics describing the nature of an insurance
contract EXCEPT - CORRECT ANSWER Bilateral
,A 15-year mortgage is best protected by what kind of life policy? - CORRECT
ANSWER 15-year decreasing term
Companies in NC may transact solicitations for insurance ONLY through - CORRECT
ANSWER Licensed agents
Which of these retirement plans can be started by an employee, even if another plan is
in existence - CORRECT ANSWER 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 - CORRECT ANSWER Variable life
If an annuity is terminated prior to the beginning of the income payment period, the
contract owner receives - CORRECT ANSWER 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 - CORRECT ANSWER Policy Loan
Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage? - CORRECT ANSWER 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? - CORRECT ANSWER Income that cannot
be outlived by the owner
A level premium indicates - CORRECT ANSWER 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? -
CORRECT ANSWER Daughter
Which of the following statements is correct about the period in which a Term Policy can
be converted? - CORRECT ANSWER 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? - CORRECT ANSWER
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? -
CORRECT ANSWER 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? - CORRECT ANSWER Return of Premium rider
One of the stated purposes of the Life and Health Insurance Guaranty Association is to
- CORRECT ANSWER 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 - CORRECT ANSWER
Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage? - CORRECT ANSWER Variable universal life
Under a renewable term policy, - CORRECT ANSWER 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) - CORRECT
ANSWER Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty Association in NC
apply to - CORRECT ANSWER 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? -
CORRECT ANSWER 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 -
CORRECT ANSWER 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 - CORRECT
ANSWER Viatical Settlement
When an employee is terminated, which statement about a group term life conversion is
true? - CORRECT ANSWER Policy proceeds will be paid if the employee dies during
the conversion period
