SOUTH CAROLINA SC LIFE INSURANCE
EXAM 2026 COMPLETE PRACTICE
QUESTIONS AND CORRECT ANSWERS
WITH DETAILED EXPLANATIONS SOUTH
CAROLINA LIFE INSURANCE PRODUCER
LICENSING EXAM STUDY GUIDE GRADE
A+ 2026 EDITION
What are the two phases of an annuity?
Either the amount paid into the annuity or the cash value, whichever is
greater - CORRECT ANSWER -If the annuitant dies before the annuitization
period starts, what will the beneficiary receive?
No sooner than a 1 year after the annuity purchase - CORRECT ANSWER -
With a single premium deferred annuity, when will the annuity payments
become available?
Single life and multiple life annuities - CORRECT ANSWER -how are
annuities classified depending on how many lives they cover ?
Life income with period certain - CORRECT ANSWER -What annuity
settlement option provides income payments to the annuitant for the
duration of his or her life, and also guarantees payment for a specified
number of years?
,beneficiary - CORRECT ANSWER -If the annuitant dies during the
accumulation period, who will receive the annuity benefits?
A modified endowment contract (MEC) - CORRECT ANSWER -What is the
name for an overfunded life insurance policy?
No, lump-sum benefits are received tax free - CORRECT ANSWER -Is the
death benefit of a life insurance policy taxed to the beneficiary if it's
received as a lump sum
Cash value growth is tax deferred - CORRECT ANSWER -according to the
taxation rules of life insurance policies, how are cash value increases taxed?
dividends are not considered income for tax purposes the are return of
unused premium - CORRECT ANSWER -why are dividends in life insurance
policies not taxable?
when there is an incident of ownership at the time of death - CORRECT
ANSWER -When would life insurance policy proceeds be included in the
insured's taxable estate
To determine if a life insurance policy is a modified endowment contract -
CORRECT ANSWER -What is the main purpose of the 7 day test
interest earned on principal - CORRECT ANSWER -What portion of a non
qualified annuity payment would be taxed
,only the portion in excess of the premium paid - CORRECT ANSWER -upon
surrender of a life insurance policy, what portion of the cash value will be
taxed?
From trustee to trustee - CORRECT ANSWER -in a direct rollover, how is the
money transferred from one retirement plan to a new one
Interest Only - CORRECT ANSWER -If the beneficiary of a life insurance
policy receives death benefit payments that consist of principal and
interest, which portion, if any will be taxed?
Death benefits are generally not subject not to income taxes - CORRECT
ANSWER -What is the general taxation rule for death benefits payable to the
beneficiary of a life insurance policy
Without receiving written consent from an insurance regulatory authority -
CORRECT ANSWER -Federal law makes it illegal for any individual
convicted of a crime involving dishonesty or breach of trust to work in the
business of insurance affecting interstate commerce
$15,000 - $30,000 - CORRECT ANSWER -An insurer may be fined for
nonwillful or for willful violations of insurance laws with which of the
following respective fines:
Vacation travel expenses - CORRECT ANSWER -Which of the following
would least likely be considered a legitimate need that would be paid by
insurance proceeds?
, warranty - CORRECT ANSWER -Which of the following is a statement that is
guaranteed to be true, and if untrue, may breach an insurance contract
Law of Large Numbers - CORRECT ANSWER -Which law is the foundation of
the statistical prediction of loss upon which rates for insurance are
calculated?
The broker - CORRECT ANSWER -In the transaction of insurance, which of
the following is considered to be representing the client?
Signed waiver of premium - CORRECT ANSWER -Upon policy delivery, the
producer may be required to obtain any of the following EXCEPT
The recommended amount to keep the policy in force throughout it's
lifetime - CORRECT ANSWER -Which of the following best defines target
premium in a universal life policy?
Misdemeanor - CORRECT ANSWER -Conducting insurance in this state
without a license would be considered a
Equal to the original policy for as long as the cash value will purchase -
CORRECT ANSWER -When the insured selects the extended term
nonforfeiture option, the cash value will be used to purchase term
insurance with what face amount?
Grace Period - CORRECT ANSWER -The automatic premium loan provision
is activated at the end of the
EXAM 2026 COMPLETE PRACTICE
QUESTIONS AND CORRECT ANSWERS
WITH DETAILED EXPLANATIONS SOUTH
CAROLINA LIFE INSURANCE PRODUCER
LICENSING EXAM STUDY GUIDE GRADE
A+ 2026 EDITION
What are the two phases of an annuity?
Either the amount paid into the annuity or the cash value, whichever is
greater - CORRECT ANSWER -If the annuitant dies before the annuitization
period starts, what will the beneficiary receive?
No sooner than a 1 year after the annuity purchase - CORRECT ANSWER -
With a single premium deferred annuity, when will the annuity payments
become available?
Single life and multiple life annuities - CORRECT ANSWER -how are
annuities classified depending on how many lives they cover ?
Life income with period certain - CORRECT ANSWER -What annuity
settlement option provides income payments to the annuitant for the
duration of his or her life, and also guarantees payment for a specified
number of years?
,beneficiary - CORRECT ANSWER -If the annuitant dies during the
accumulation period, who will receive the annuity benefits?
A modified endowment contract (MEC) - CORRECT ANSWER -What is the
name for an overfunded life insurance policy?
No, lump-sum benefits are received tax free - CORRECT ANSWER -Is the
death benefit of a life insurance policy taxed to the beneficiary if it's
received as a lump sum
Cash value growth is tax deferred - CORRECT ANSWER -according to the
taxation rules of life insurance policies, how are cash value increases taxed?
dividends are not considered income for tax purposes the are return of
unused premium - CORRECT ANSWER -why are dividends in life insurance
policies not taxable?
when there is an incident of ownership at the time of death - CORRECT
ANSWER -When would life insurance policy proceeds be included in the
insured's taxable estate
To determine if a life insurance policy is a modified endowment contract -
CORRECT ANSWER -What is the main purpose of the 7 day test
interest earned on principal - CORRECT ANSWER -What portion of a non
qualified annuity payment would be taxed
,only the portion in excess of the premium paid - CORRECT ANSWER -upon
surrender of a life insurance policy, what portion of the cash value will be
taxed?
From trustee to trustee - CORRECT ANSWER -in a direct rollover, how is the
money transferred from one retirement plan to a new one
Interest Only - CORRECT ANSWER -If the beneficiary of a life insurance
policy receives death benefit payments that consist of principal and
interest, which portion, if any will be taxed?
Death benefits are generally not subject not to income taxes - CORRECT
ANSWER -What is the general taxation rule for death benefits payable to the
beneficiary of a life insurance policy
Without receiving written consent from an insurance regulatory authority -
CORRECT ANSWER -Federal law makes it illegal for any individual
convicted of a crime involving dishonesty or breach of trust to work in the
business of insurance affecting interstate commerce
$15,000 - $30,000 - CORRECT ANSWER -An insurer may be fined for
nonwillful or for willful violations of insurance laws with which of the
following respective fines:
Vacation travel expenses - CORRECT ANSWER -Which of the following
would least likely be considered a legitimate need that would be paid by
insurance proceeds?
, warranty - CORRECT ANSWER -Which of the following is a statement that is
guaranteed to be true, and if untrue, may breach an insurance contract
Law of Large Numbers - CORRECT ANSWER -Which law is the foundation of
the statistical prediction of loss upon which rates for insurance are
calculated?
The broker - CORRECT ANSWER -In the transaction of insurance, which of
the following is considered to be representing the client?
Signed waiver of premium - CORRECT ANSWER -Upon policy delivery, the
producer may be required to obtain any of the following EXCEPT
The recommended amount to keep the policy in force throughout it's
lifetime - CORRECT ANSWER -Which of the following best defines target
premium in a universal life policy?
Misdemeanor - CORRECT ANSWER -Conducting insurance in this state
without a license would be considered a
Equal to the original policy for as long as the cash value will purchase -
CORRECT ANSWER -When the insured selects the extended term
nonforfeiture option, the cash value will be used to purchase term
insurance with what face amount?
Grace Period - CORRECT ANSWER -The automatic premium loan provision
is activated at the end of the
