North Carolina Life Insurance Questions with
Detailed Verified Answers
An agent is required to obtain a signed acceptance from the policyowner when a
policy is Ans: Changed
A third party contract consists of Ans: the policyowner, insured and the insurer.
3. The application is the primary source of Ans: underwriting.
4. An exchange of an act for a promise is a Ans: unilateral contract
5. The applicant must initial any changes made on the application after the application
has Ans: already been signed.
6. The elements of a valid contract consist of Ans: consideration, competent parties,
agreement which is made up of offer and acceptance, legal form and legal purpose.
7. The insured's consideration is Ans: the statements on the application and payment
of the initial premium.
8. The insurer's consideration is Ans: the "promise to pay".
9. In order to sell Variable products, agent must have a
To get the Variable Life and Annuity license Ans: a Variable Life and Annuity license in
addition to their Life license
the individual must be licensed with FINRA.
10. The insurer is required to pay interest on the death benefits if not paid out within
30 days of Ans: the proof of loss being received by the insurer.
,11. An individual has 31 days to convert a group plan to an individual plan after leaving
their job Ans: without having to prove evidence of insurability.
12. An insurance company incorporated or organized under the laws of the United
States or of any jurisdiction within the United States other than North Carolina would
be known as Ans: a foreign company.
13. An agent will be held personally liable for contracts written by agent while
representing an Ans: unauthorized (non-admitted) company. Representing an
unlicensed company is a misdemeanor.
14. You cannot call yourself a Ans: financial planner, consultant or advisor unless such
is actually the case.
15. The fact that a company is protected by the Guaranty Association cannot be Ans:
used as a sales aide.
16. The Notice of Information Practices and the Disclosure Authorization forms must
be provided at the Ans: time the information is being gathered (time of application) if
the insurer is going to use a non-public source as part of the underwriting
17. A agent or insurer must maintain policyowner files and records for at least Ans: 5
years
18. Making malicious or derogatory statements against another company with the
intent to damage
their reputation is known as Ans: defamation.
19. An appointment with a company remains in effect as long as the agent is licensed
and the appointing insurer is Ans: authorized (licensed).
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, 20. One of the requirements to be a life or health agent is to complete and successfully
pass a Ans: 20 hour pre-licensing or correspondence course.
22. An agent is committing a misdemeanor when signing a blank policy. A blank policy
is Ans: a policy that has not been sold and paid for.
21. When an agent is using a cost index to compare policy costs, he/she must
remember Ans: that using a cost index is useful only when comparing similar
products.
23. Universal Life is considered to be an interest-sensitive product because Ans: the
cash value earns Interest based on current interest rates as opposed to a guaranteed
interest rate like traditional life insurance products.
24. Under a Universal Life policy, Ans: the interest is credited to the account monthly.
The mortality cost and expense or loading charges (if applicable) are deducted from
the account on a monthly basis. The expense or loading charge in a Universal Life
policy is the specific amount being deducted out of the account to cover administrative
expenses. Similar to the fees charged by the bank to cover handling and processing
fees associated with your account.
25. By adding a term rider to a base whole life policy Ans: the policyowner is
increasing the face amount and thus the death benefit of the base policy.
26. Remember that mortality cost and cost of insurance are used Ans: Interchangeably
27. Remember the key characteristics of Universal Life such as Ans: target premium,
unbundling, corridor of insurance, flexibility or surrender charge (rear-end loading).
28. The term separate account is Ans: associated with variable products
29. If the insured dies within the grace period on a term policy
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Detailed Verified Answers
An agent is required to obtain a signed acceptance from the policyowner when a
policy is Ans: Changed
A third party contract consists of Ans: the policyowner, insured and the insurer.
3. The application is the primary source of Ans: underwriting.
4. An exchange of an act for a promise is a Ans: unilateral contract
5. The applicant must initial any changes made on the application after the application
has Ans: already been signed.
6. The elements of a valid contract consist of Ans: consideration, competent parties,
agreement which is made up of offer and acceptance, legal form and legal purpose.
7. The insured's consideration is Ans: the statements on the application and payment
of the initial premium.
8. The insurer's consideration is Ans: the "promise to pay".
9. In order to sell Variable products, agent must have a
To get the Variable Life and Annuity license Ans: a Variable Life and Annuity license in
addition to their Life license
the individual must be licensed with FINRA.
10. The insurer is required to pay interest on the death benefits if not paid out within
30 days of Ans: the proof of loss being received by the insurer.
,11. An individual has 31 days to convert a group plan to an individual plan after leaving
their job Ans: without having to prove evidence of insurability.
12. An insurance company incorporated or organized under the laws of the United
States or of any jurisdiction within the United States other than North Carolina would
be known as Ans: a foreign company.
13. An agent will be held personally liable for contracts written by agent while
representing an Ans: unauthorized (non-admitted) company. Representing an
unlicensed company is a misdemeanor.
14. You cannot call yourself a Ans: financial planner, consultant or advisor unless such
is actually the case.
15. The fact that a company is protected by the Guaranty Association cannot be Ans:
used as a sales aide.
16. The Notice of Information Practices and the Disclosure Authorization forms must
be provided at the Ans: time the information is being gathered (time of application) if
the insurer is going to use a non-public source as part of the underwriting
17. A agent or insurer must maintain policyowner files and records for at least Ans: 5
years
18. Making malicious or derogatory statements against another company with the
intent to damage
their reputation is known as Ans: defamation.
19. An appointment with a company remains in effect as long as the agent is licensed
and the appointing insurer is Ans: authorized (licensed).
© Get it right 2025 Getaway - Stuvia US All rights reserved
, 20. One of the requirements to be a life or health agent is to complete and successfully
pass a Ans: 20 hour pre-licensing or correspondence course.
22. An agent is committing a misdemeanor when signing a blank policy. A blank policy
is Ans: a policy that has not been sold and paid for.
21. When an agent is using a cost index to compare policy costs, he/she must
remember Ans: that using a cost index is useful only when comparing similar
products.
23. Universal Life is considered to be an interest-sensitive product because Ans: the
cash value earns Interest based on current interest rates as opposed to a guaranteed
interest rate like traditional life insurance products.
24. Under a Universal Life policy, Ans: the interest is credited to the account monthly.
The mortality cost and expense or loading charges (if applicable) are deducted from
the account on a monthly basis. The expense or loading charge in a Universal Life
policy is the specific amount being deducted out of the account to cover administrative
expenses. Similar to the fees charged by the bank to cover handling and processing
fees associated with your account.
25. By adding a term rider to a base whole life policy Ans: the policyowner is
increasing the face amount and thus the death benefit of the base policy.
26. Remember that mortality cost and cost of insurance are used Ans: Interchangeably
27. Remember the key characteristics of Universal Life such as Ans: target premium,
unbundling, corridor of insurance, flexibility or surrender charge (rear-end loading).
28. The term separate account is Ans: associated with variable products
29. If the insured dies within the grace period on a term policy
© Get it right 2025 Getaway - Stuvia US All rights reserved
