NC LIFE INSURANCE STATE EXAM STUDY GUIDELINE QUESTIONS WITH CORRECT ANSWERS 2025

NC LIFE INSURANCE STATE EXAM STUDY
GUIDELINE QUESTIONS WITH CORRECT ANSWERS
2025
TermUInsuranceU-UCORRECTUANSWERU-
UsedUforUTemporaryUSituations.UNetUcostUhighestUinUtheUlongUrun.UPremiumsUgoesUupUeveryUyearUbasedUo
nUcurrentU(attained)age.



TermUInsuranceU-UCORRECTUANSWERU-
Expire'sUatUaUcertainUage/TimeUinUtheUfuture.UMayUbeUrenewableUupUtoUaUcertainUageUorUdateUwithUoutUaU
phyicalUExam.



LevelUTermUInsuranceU-UCORRECTUANSWERU-
TermUinsuranceUcanUbeURenewedUannually.UHasUaUlevelUFaceUAmountUatUrenewal,UPremiumsUgoesUup.UCa
nUbeUpurchasedUforUaUYearUorUasUoftenUasU5,U10,U15,UtoU20UyearsUinclementsUwithUaverageUpremium.UPre
miumsUandUFaceUAmountsUareU"Level"UforUaUperiodUofU"Time".



DecreasingUTermUInsuranceU-UCORRECTUANSWERU-
ItUisUNOTUAnnualURenewableUterm.UFaceUAmountUgoesUdown,UwhileUPremiumsUremainUtheUsame.UDecrea
singUTermUinsuranceUisUoftenUusedUasUaUmortageUredemption.UCanUbeUconvertedUtoUWholeULife,Uregardles
sUofUhealth.UPremiumsUstaysUtheUsame.UCostsUincreasesUasUFaceUAmountUdecreases,UbyUexpirationUtheUFa
ceUAmountUisUZero.



IncreasingUTermUInsuranceU-UCORRECTUANSWERU-
TermUisUaddedUasUaUriderUtoUWholeULifeUpolicies,UatUanUextraUcost.UFaceUAmountUgoesUup.UItUAllowsUbenefi
ciaryUtoUrecieveUFaceUAmountUplusUPremiumsUorUCashUValue.



RenewabilityU-UCORRECTUANSWERU-
MostUTermUIsUrenewableUupUtoUaUcertainUageUregardlessUofUhealth.UThatUcanUbeUrenewedUwithoutUproofU
ofUtheUinsuredsUinsurability,UupUtoUaUcertainUspecifiedUmaximumUage.



ConvertibiltyU-UCORRECTUANSWERU-
MostUareUconvertibleUtoUWholeULifeUpoliciesUregardlessUofUhealth.UConversionsUareUbasedUonUcurrentU"att
ained"Uage.UNOTUoriginalUage.UConversionUmayUonlyUbeUtoUaUmoveUexpensiveUpolicy,UsuchUasUWholeULife.

,TermUinsuranceU-UCORRECTUANSWERU-
YouUcanUnotUconvertU"TermUtoUTerm"UYouUcanUconvertU"TermUtoUWholeULife"UYouUcanUneverUconvertUtoUm
oreUcoverageUthanUyouUhave.U

"UIfUyouUwantUmoreUinsurance,UyouUwillUhaveUtoUpassUaUphysicalUexamUandUpayUpremiumsUuponUyourUcurr
entU"attained"Uage.



WhatUareUtheU9UtypesUofUWholeULifeUInsuranceUPolicies?U-UCORRECTUANSWERU-
"OrdinaryU(Straight)ULife"U"ULimitedUPay"U"USingle-
PremiumsUWholeULife"U"AdjustableUWholeULife"UUniversalUWholeULife"UVariableUWholeULife"U"Variable/U
niversalUWholeULife"U"InterestUSensitiveUWholeULife"U"UEquity-indexedULife



"OrdinaryU(Straight)ULife"

(FixedUPremiums)U-UCORRECTUANSWERU-
PermanentUprotectionU(maturesUatUageU100)UGuaranteedUTaxUdeferredUInterestUrateUonUCashUValue.UCash
UValueUbuildsUslowlyUforUtheUfirstU3Uyears.UPremiumsUareUlevel,UsinceUtheUcompanyUrisksUgoesUdownUasUCa

shUValueUgoesUup.UIfUyouUdieUtheUinsurerUkeepsUtheUCashUValueUtoUoffsetUtheirUrisks.UInsuredsUhasUaccessUt
oUCashUthroughUCashUSurrenderUorUaUpolicyUloan.U"RatesUareUperUunitUofUprotection"U($1,000UisU1Uunit)UC/
VUisUguaranteedUtoUbeUaUcertainUamountUperU$1,000U(inUtheUfuture).UC/VUwillUequalUF/AUatUpolicyUmaturit
yU(ageU100).



LimitedUPayUandUSingleUpremiumUWholeULifeU

(FixedUPremiums)U-UCORRECTUANSWERU-
LimitedUPayUcanUalsoUbeUasULP65UorU20payUlifeU30Upaylife,UsoUdon'tUgetUtheseUconfussed,UtheyUareUtheUsa
meUthing.U

PremiumUpayingUperiodUisUshorter.UStillUmaturesUatUageU100U(NotUendUofUpremiumUpayingUperiod)UClientU
paysUsameUamountUofUmoneyUoverUaUshorterUperiodUofUtime.UTheUshorterUtheUpremiumUpayingUperiod,Ut
heUhigherUtheUpremium.UC/vUbuildsUfasterUthanUOridaryUWL.

AUsingle-premiumUpolicyUwillUhaveUanUImmediateUC/V.



Limited-payUWholeULifeU-UCORRECTUANSWERU-AU20UpaylifeUwillUbeUpaidUupUinU20Uyears

UIfUpurchasedUatUageU30,UpaidUupUatUageU50.UTheUpremiumUisUpaidUup,UyourUstillUcoveredUtillUtheUpolicyUma
turesUatUageU100.U

AUlifeUpaidUupUatUageU65,UwillUbeUpaidUupUatUageU65U(LP65)

IfUpurchasedUatUageU30,UpaidUupUatUageU65.UTheUpremiumUisUpaidUupUatUageU65,UyourUstillUcoveredUuntilUpo
licyUmaturesUatUageU100.

, AdjustableUWholeUlife

(UFlexibleUPremium)U-UCORRECTUANSWERU-
IsUaUcombinationUofUTermUandUWholeULife!UStillUcoverUyouUuntilUyouUdieUorUageU100U(matures)UInsuredsUca
nUadjustUFaceUAmount,UPremiumsUorUTermUofUProtection.USoldUtoUClientsUwithUFluctuatingUincomeU(UrealU
estateUbrokers)UCoverageUmayUnotUbeUincreasedUbeyondUtheUoriginalUamountUwithoutUanUphysical.



UniversalUWholeULife

(FlexibleUPremiums)U-UCORRECTUANSWERU-
GuaranteedU"Minimum"UInterestURate.UCurrentUinterestUrateUwhichUvariesUyearUtoUyear.UHasUExtremeUFlex
ibiltyUregardingUpremiumsUpayments.U

InsuredUdoesUnotUhaveUtoUpayUannualUpremiumU(UCashUValueUmayUbeUdebitedUtoUpayUcostUofUprotection)U
"THISUWOULDUNOTUBEUAULOAN"UProtectionUportionUofUpolicyUisUactuallyUtermUinsuranceU(UcostUincreases)
U



TargetUPremiumUbasedUonUprojectedUearnings.

OptionUA:UUniversalULifeUhasUaUlevelUdeathUbenefitU(term)

FaceUAmountUisUmadeUofUtermUinsurance

OptionUB:UUniversalULifeUwillUpayUbeneficiaryUbothUFaceUAmountUPLUSUCashUValue.



VariableUWholeULife

(FixedUPremiums)U-UCORRECTUANSWERU-
CashUValueUdepositedUintoUaU"SeparateUAccount"U(LikeUaUmutualUFund)UNOUguaranteedUrateUofUreturnUorU
CashUValue.UItUdoesUhaveUaU"MinimumUdeathUbeneftU(FaceUAmount)UisUguaranteed.UProjectionsUmayUbeUu
sedUasUlongUasUtheyUareUnotUguaranteed.U

RequiresUFINRAUSeriesU6UorU7UlicenseUtoUsell!

FINRAU(UFinancialUindustryURegulatoryUAuthority)



Variable/UUniversalUWholeULife

(FlexibleUPremium)U-UCORRECTUANSWERU-
CombinesUbestUfeaturesUofUbothUUniversalUandUVariableUwholeUlife.URequiresUaUFINRAUseriesU6UorU7Usecuri
tiesUlicenseUtoUsell.UClientsUcanUselfUdirectUcashUvaluesUintoUsub-accounts.U

NoUguaranteedUInterestURateUorUCashUValue.UFaceUAmountUisUtermUinsuranceU(optionUA)

PolicyUmayUpayUoutUmopreUuponUdeathUifU(optionUB)UisUselected,UFaceUAmountUplusUCashUValue