NWM North Carolina Life Insurance Exam

When a reduced paid up nonforfeiture option is chosen, what happens to the face amount of the policy? - Answer- 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? - Answer- death benefits Stating that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is - Answer- 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? - Answer- 100% participation of members is required in noncontributory plans In modified life policies, what happens to the premium? - Answer- 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? - Answer- 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 - Answer- credit life which of the following statements concerning buy sell agreements is true - Answer- 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? - Answer- 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 - Answer- 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? - Answer- 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? - Answer- A portion of the benefit up to a limit is tax free; the rest is taxable income