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NC Life Insurance Practice Exam|
Latest Questions And Answers 2026
Which of the following is NOT true regarding the accumulation period of an
annuity?
a)It is also known as the pay-in period.
b)It would not occur in a deferred annuity.
c)It is the period during which the annuity payments earn interest.
d)It is the period over which the owner makes payments into an annuity.- correct-
answer - b)It would not occur in a deferred annuity.
The "accumulation period" is the period of time over which the annuity owner
makes payments (premiums) into an annuity. This is the period of time during
which the payments earn interest and grow tax deferred (which would be the
case in a deferred annuity).
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Life insurance death proceeds are
a)Taxed as ordinary income.
b)Generally not taxed as income.
c)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross
income.
d)Taxed as a capital gain.- correct-answer - b)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
Which of the following is TRUE regarding an indeterminate premium whole life
policy?
a) The premium is lower in the first year of the policy; then it is gradually raised
every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
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d) The premium can be raised up to a guaranteed maximum rate.- correct-answer
- d) The premium can be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to
year. After the initial period (usually 2-3 years) when a lower premium is paid, the
insurer establishes a new rate which could be raised up to the guaranteed
maximum stated in the policy, kept the same or lowered, based on the company's
expected mortality, expense and investments.
A person who knowingly obtains information about an individual from an agent or
the insurer under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony.- correct-answer - a) Class 1 misdemeanor.
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A person who knowingly obtains information about an individual from an insurer
or agent under false pretenses is guilty of a Class 1 misdemeanor.
The initial amount of credit life insurance may NOT exceed
a)An amount set by statute and adjusted regularly for inflation.
b)The borrower's monthly income.
c)The borrower's annual income.
d)The amount to be repaid under the contract.- correct-answer - d) The amount
to be repaid under the contract.
The initial amount of credit life insurance may not exceed the total amount
repayable under the contract of indebtedness.
All of the following statements are true regarding installments for a fixed period
annuity settlement option EXCEPT
NC Life Insurance Practice Exam|
Latest Questions And Answers 2026
Which of the following is NOT true regarding the accumulation period of an
annuity?
a)It is also known as the pay-in period.
b)It would not occur in a deferred annuity.
c)It is the period during which the annuity payments earn interest.
d)It is the period over which the owner makes payments into an annuity.- correct-
answer - b)It would not occur in a deferred annuity.
The "accumulation period" is the period of time over which the annuity owner
makes payments (premiums) into an annuity. This is the period of time during
which the payments earn interest and grow tax deferred (which would be the
case in a deferred annuity).
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Life insurance death proceeds are
a)Taxed as ordinary income.
b)Generally not taxed as income.
c)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross
income.
d)Taxed as a capital gain.- correct-answer - b)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
Which of the following is TRUE regarding an indeterminate premium whole life
policy?
a) The premium is lower in the first year of the policy; then it is gradually raised
every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
,3|Page
d) The premium can be raised up to a guaranteed maximum rate.- correct-answer
- d) The premium can be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to
year. After the initial period (usually 2-3 years) when a lower premium is paid, the
insurer establishes a new rate which could be raised up to the guaranteed
maximum stated in the policy, kept the same or lowered, based on the company's
expected mortality, expense and investments.
A person who knowingly obtains information about an individual from an agent or
the insurer under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony.- correct-answer - a) Class 1 misdemeanor.
, 4|Page
A person who knowingly obtains information about an individual from an insurer
or agent under false pretenses is guilty of a Class 1 misdemeanor.
The initial amount of credit life insurance may NOT exceed
a)An amount set by statute and adjusted regularly for inflation.
b)The borrower's monthly income.
c)The borrower's annual income.
d)The amount to be repaid under the contract.- correct-answer - d) The amount
to be repaid under the contract.
The initial amount of credit life insurance may not exceed the total amount
repayable under the contract of indebtedness.
All of the following statements are true regarding installments for a fixed period
annuity settlement option EXCEPT
