North Carolina Life Insurance Exam Questions
with Detailed Verified Answers
When a reduced paid up nonforfeiture option is chosen, what happens to the face
amount of the policy? Ans: It is reduced to the amount of what the cash value would
buy as a single premium
Which of the following are not fundable by annuities? Ans: death benefits
Stating that an insurer's policies are guaranteed by the existence of the Life and Health
Guaranty Association is Ans: An unfair trade practice
group life insurance is a single policy written to provide coverage to members of a
group. Which of the following statements concerning group life is correct? Ans: 100%
participation of members is required in noncontributory plans
In modified life policies, what happens to the premium? Ans: It is level at the beginning
but increases after the first few years
all other factors being equal, what would the premium be like in a survivorship life
policy as compared to the premium in a joint life policy? Ans: Lower
The type of insurance sold to a debtor and designed to pay the amount due on a loan
if the debtor dies before the loan is repaid is called Ans: credit life
which of the following statements concerning buy sell agreements is true Ans: Buy sell
agreements are normally funded with a life insurance policy
Which universal life option has a gradually increasing cash value and a level death
benefit? Ans: Option A
, A man decided to purchase $100,000 annually renewable term life policy to provide
additional protection until his children finished college. He discovered that this policy
Ans: required a premium increase each renewal
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? Ans:
consideration
an individual has been diagnosed with Alzheimer's disease. He is insured under a life
insurance policy with the accelerated benefits rider. Which of the following is true
regarding taxation of the accelerated benefits? Ans: A portion of the benefit up to a
limit is tax free; the rest is taxable income
In cases where the Commissioner shall find upon substantial evidence that any
complaint against a company is justified, in addition to any penalties, the company shall..
Ans: also be liable for the expenses of the investigation
Which of the following is incorrect concerning a noncontributory group plan? Ans:
the employees receive individual policies
how long is a free look period for replacement policies? Ans: 30 days
How long does a North Carolina Agent have to notify the Department of insurance in
the event of a change in residence address? Ans: 10 business days
Which of the following is called a "second to die" policy? Ans: survivorship life
which of the following policies would have an irs required corridor or gap between the
cash value and the death benefit Ans: universal life - option a
Variable life insurance is based on what kind of premium? Ans: Level fixed
© Get it right 2025 Getaway - Stuvia US All rights reserved
with Detailed Verified Answers
When a reduced paid up nonforfeiture option is chosen, what happens to the face
amount of the policy? Ans: It is reduced to the amount of what the cash value would
buy as a single premium
Which of the following are not fundable by annuities? Ans: death benefits
Stating that an insurer's policies are guaranteed by the existence of the Life and Health
Guaranty Association is Ans: An unfair trade practice
group life insurance is a single policy written to provide coverage to members of a
group. Which of the following statements concerning group life is correct? Ans: 100%
participation of members is required in noncontributory plans
In modified life policies, what happens to the premium? Ans: It is level at the beginning
but increases after the first few years
all other factors being equal, what would the premium be like in a survivorship life
policy as compared to the premium in a joint life policy? Ans: Lower
The type of insurance sold to a debtor and designed to pay the amount due on a loan
if the debtor dies before the loan is repaid is called Ans: credit life
which of the following statements concerning buy sell agreements is true Ans: Buy sell
agreements are normally funded with a life insurance policy
Which universal life option has a gradually increasing cash value and a level death
benefit? Ans: Option A
, A man decided to purchase $100,000 annually renewable term life policy to provide
additional protection until his children finished college. He discovered that this policy
Ans: required a premium increase each renewal
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? Ans:
consideration
an individual has been diagnosed with Alzheimer's disease. He is insured under a life
insurance policy with the accelerated benefits rider. Which of the following is true
regarding taxation of the accelerated benefits? Ans: A portion of the benefit up to a
limit is tax free; the rest is taxable income
In cases where the Commissioner shall find upon substantial evidence that any
complaint against a company is justified, in addition to any penalties, the company shall..
Ans: also be liable for the expenses of the investigation
Which of the following is incorrect concerning a noncontributory group plan? Ans:
the employees receive individual policies
how long is a free look period for replacement policies? Ans: 30 days
How long does a North Carolina Agent have to notify the Department of insurance in
the event of a change in residence address? Ans: 10 business days
Which of the following is called a "second to die" policy? Ans: survivorship life
which of the following policies would have an irs required corridor or gap between the
cash value and the death benefit Ans: universal life - option a
Variable life insurance is based on what kind of premium? Ans: Level fixed
© Get it right 2025 Getaway - Stuvia US All rights reserved
