NC Life Insurance Practice Exam Questions 2024
comprehensive questions and verified answers/ complete
solutions|get it 100% accurate
When an insurer requires a written proof of loss after notice of such loss has been
given by the insured or beneficiary, the company must
a) Request a police report from the Department of Motor Vehicles.
b) Furnish a blank form to be used for that purpose.
c) Document the request for further investigation.
d) Submit the loss claim to underwriting for premium review and resolution. - ans
-b) Furnish a blank form to be used for that purpose.
When any company under any insurance policy requires a written proof of loss
after notice of such loss has been given by the insured or beneficiary, the
company or its representative must furnish a blank form to be used for that
purpose.
Insurance companies are required to provide proof of loss forms to the claimant
within how many days after receipt of notice of loss?
a) 15
b) 30
c) 31
d) 45 - ans -a) 15
When any company under any insurance policy requires a written proof of loss
after notice of the loss has been given by the insured or beneficiary, the company
must furnish a blank form within 15 days.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
,d) Coverage is allowed up to age 75. - ans -a) The rider is usually level term
insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for
a limited amount of time, typically expiring at age 65. A spouse term rider (just
like any other insured rider) is usually level term insurance.
A policy will pay the death benefit if the insured dies during the 20-year premium-
paying period, and nothing if death occurs after the 20-year period. What type of
policy is this?
a)Level term
b)Term to specified age
c)Ordinary life policy
d)Limited pay whole life - ans -a)Level term
A 20-year term policy is written to provide a level death benefit for 20 years.
Which nonforfeiture option provides coverage for the longest period of time?
a)Accumulated at interest
b)Reduced paid-up
c)Extended term
d)Paid-up option - ans -b)Reduced paid-up
The reduced paid-up nonforfeiture option would provide protection until the
insured reaches 100, but the face amount is reduced to what the cash would buy.
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. - ans -
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).
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. - ans -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.
d) The premium can be raised up to a guaranteed maximum rate. - ans -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. - ans -a) Class 1 misdemeanor.
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. - ans -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
a)The insurer determines the amount for each payment.
b)It is a life contingency option.
c)It will pay the benefit only for a designated period of time.
d)The payments are not guaranteed for life. - ans -b)It is a life contingency option.
Under the installments for a fixed period annuity settlement option, the annuitant
selects the time period for the benefits; the insurer determines how much each
payment will be. This option pays for a specific amount of time only, and there
are no life contingencies.
The policyowner pays for her life insurance annually. Until now, she has collected
a nontaxable dividend check each year. She has decided that she would rather use
the dividends to help pay for her next premium. What option would allow her to
do this?
a)Reduction of premium
b)Paid-up addition
c)Accumulation at interest
comprehensive questions and verified answers/ complete
solutions|get it 100% accurate
When an insurer requires a written proof of loss after notice of such loss has been
given by the insured or beneficiary, the company must
a) Request a police report from the Department of Motor Vehicles.
b) Furnish a blank form to be used for that purpose.
c) Document the request for further investigation.
d) Submit the loss claim to underwriting for premium review and resolution. - ans
-b) Furnish a blank form to be used for that purpose.
When any company under any insurance policy requires a written proof of loss
after notice of such loss has been given by the insured or beneficiary, the
company or its representative must furnish a blank form to be used for that
purpose.
Insurance companies are required to provide proof of loss forms to the claimant
within how many days after receipt of notice of loss?
a) 15
b) 30
c) 31
d) 45 - ans -a) 15
When any company under any insurance policy requires a written proof of loss
after notice of the loss has been given by the insured or beneficiary, the company
must furnish a blank form within 15 days.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
,d) Coverage is allowed up to age 75. - ans -a) The rider is usually level term
insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for
a limited amount of time, typically expiring at age 65. A spouse term rider (just
like any other insured rider) is usually level term insurance.
A policy will pay the death benefit if the insured dies during the 20-year premium-
paying period, and nothing if death occurs after the 20-year period. What type of
policy is this?
a)Level term
b)Term to specified age
c)Ordinary life policy
d)Limited pay whole life - ans -a)Level term
A 20-year term policy is written to provide a level death benefit for 20 years.
Which nonforfeiture option provides coverage for the longest period of time?
a)Accumulated at interest
b)Reduced paid-up
c)Extended term
d)Paid-up option - ans -b)Reduced paid-up
The reduced paid-up nonforfeiture option would provide protection until the
insured reaches 100, but the face amount is reduced to what the cash would buy.
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. - ans -
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).
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. - ans -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.
d) The premium can be raised up to a guaranteed maximum rate. - ans -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. - ans -a) Class 1 misdemeanor.
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. - ans -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
a)The insurer determines the amount for each payment.
b)It is a life contingency option.
c)It will pay the benefit only for a designated period of time.
d)The payments are not guaranteed for life. - ans -b)It is a life contingency option.
Under the installments for a fixed period annuity settlement option, the annuitant
selects the time period for the benefits; the insurer determines how much each
payment will be. This option pays for a specific amount of time only, and there
are no life contingencies.
The policyowner pays for her life insurance annually. Until now, she has collected
a nontaxable dividend check each year. She has decided that she would rather use
the dividends to help pay for her next premium. What option would allow her to
do this?
a)Reduction of premium
b)Paid-up addition
c)Accumulation at interest
