NC Life Insurance exam
Questions and Answers 100%
PASS
All of the following are included within the Insurance Commissioner's duties EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing insurance law
is not the Insurance Commissioner's responsibility, but enforcing the law is.—ANSWER--c)
Writing North Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but enforcing the
law is.
Which of the following insurance providers must be nonprofit and sell insurance only to its
members?
,a) Reciprocal
b) Fraternal
c) Service
d) Mutual—ANSWER--b) Fraternal
To be characterized as a fraternal benefit society, the organization must be nonprofit, have a
lodge system that includes ritualistic work and maintain a representative form of
government with elected officers. Insurance may only be sold to members of the society.
A married couple owns a permanent policy which covers both of their lives and pays the
death benefit only upon the death of the first insured. Which policy is that?
a)Second-to-Die
b)Family Income Policy
c)Joint Life Policy
d)Survivorship Life Policy—ANSWER--c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the
first insured, the policy ends.
The insured under a $100,000 life insurance policy with a triple indemnity rider for
accidental death was killed in a car accident. It was determined that the accident was his
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
,fault. The triple indemnity rider in the policy specifies that the death must not be
contributed to by the insured in any manner. In this case, what will the policy beneficiary
receive?
a)$0
b)$50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value)—ANSWER--c)$100,000
The triple indemnity accidental death rider obligates the company to pay three times the
face amount of the policy if the insured dies as a result of an accident. The death must be
accidental and not contributed to by any other factors and must occur within 90 days of the
accident. In this case, since the insured contributed to his own death, the triple indemnity
rider is void, but the beneficiary will still receive the policy's death benefit.
In term policies, what happens to the premium throughout the term of the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
c) Premium fluctuates.
d) Premium always remains level.—ANSWER--d) Premium always remains level.
, There are three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term: Level, Increasing, and Decreasing. Regardless
of the type of term insurance purchased, the premium is often level throughout the term of
the policy.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy.
Which of the following insurance principles has the insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith—ANSWER--c) Consideration
The binding force in any contract is consideration. Consideration on the part of the insured is
the payment of premiums and the health representations made in the application.
Consideration on the part of the insurer is the promise to pay in the event of loss.
When the breadwinner that is insured by a Family Policy dies, what rights are provided to
other family members that are covered under the policy?
a) They can convert their coverage to permanent life insurance with evidence of insurability
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
Questions and Answers 100%
PASS
All of the following are included within the Insurance Commissioner's duties EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing insurance law
is not the Insurance Commissioner's responsibility, but enforcing the law is.—ANSWER--c)
Writing North Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but enforcing the
law is.
Which of the following insurance providers must be nonprofit and sell insurance only to its
members?
,a) Reciprocal
b) Fraternal
c) Service
d) Mutual—ANSWER--b) Fraternal
To be characterized as a fraternal benefit society, the organization must be nonprofit, have a
lodge system that includes ritualistic work and maintain a representative form of
government with elected officers. Insurance may only be sold to members of the society.
A married couple owns a permanent policy which covers both of their lives and pays the
death benefit only upon the death of the first insured. Which policy is that?
a)Second-to-Die
b)Family Income Policy
c)Joint Life Policy
d)Survivorship Life Policy—ANSWER--c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the
first insured, the policy ends.
The insured under a $100,000 life insurance policy with a triple indemnity rider for
accidental death was killed in a car accident. It was determined that the accident was his
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
,fault. The triple indemnity rider in the policy specifies that the death must not be
contributed to by the insured in any manner. In this case, what will the policy beneficiary
receive?
a)$0
b)$50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value)—ANSWER--c)$100,000
The triple indemnity accidental death rider obligates the company to pay three times the
face amount of the policy if the insured dies as a result of an accident. The death must be
accidental and not contributed to by any other factors and must occur within 90 days of the
accident. In this case, since the insured contributed to his own death, the triple indemnity
rider is void, but the beneficiary will still receive the policy's death benefit.
In term policies, what happens to the premium throughout the term of the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
c) Premium fluctuates.
d) Premium always remains level.—ANSWER--d) Premium always remains level.
, There are three basic types of term coverage available, based on how the face amount
(death benefit) changes during the policy term: Level, Increasing, and Decreasing. Regardless
of the type of term insurance purchased, the premium is often level throughout the term of
the policy.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy.
Which of the following insurance principles has the insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith—ANSWER--c) Consideration
The binding force in any contract is consideration. Consideration on the part of the insured is
the payment of premiums and the health representations made in the application.
Consideration on the part of the insurer is the promise to pay in the event of loss.
When the breadwinner that is insured by a Family Policy dies, what rights are provided to
other family members that are covered under the policy?
a) They can convert their coverage to permanent life insurance with evidence of insurability
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
