North Carolina Life Insurance Exam Questions and Answers
|Fall 2025/2026 Update | 100% Correct
Question 1
When a reduced paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
Correct Answer
It is reduced to the amount of what the cash value would buy as a single premium
Question 2
Which of the following are not fundable by annuities?
Correct Answer
death benefits
Question 3
Stating that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is
Correct Answer
An unfair trade practice
Page 1 of 37
,Question 4
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?
Correct Answer
100% participation of members is required in noncontributory plans
Question 5
In modified life policies, what happens to the premium?
Correct Answer
It is level at the beginning but increases after the first few years
Question 6
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?
Correct Answer
Lower
Question 7
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
Correct Answer
credit life
Page 2 of 37
,Question 8
which of the following statements concerning buy sell agreements is true
Correct Answer
Buy sell agreements are normally funded with a life insurance policy
Question 9
Which universal life option has a gradually increasing cash value and a level death benefit?
Correct Answer
Option A
Question 10
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
Correct Answer
required a premium increase each renewal
Question 11
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?
Correct Answer
consideration
Page 3 of 37
, Question 12
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?
Correct Answer
A portion of the benefit up to a limit is tax free; the rest is taxable income
Question 13
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..
Correct Answer
also be liable for the expenses of the investigation
Question 14
Which of the following is incorrect concerning a noncontributory group plan?
Correct Answer
the employees receive individual policies
Question 15
how long is a free look period for replacement policies?
Correct Answer
30 days
Page 4 of 37
|Fall 2025/2026 Update | 100% Correct
Question 1
When a reduced paid up nonforfeiture option is chosen, what happens to the face amount of the policy?
Correct Answer
It is reduced to the amount of what the cash value would buy as a single premium
Question 2
Which of the following are not fundable by annuities?
Correct Answer
death benefits
Question 3
Stating that an insurer's policies are guaranteed by the existence of the Life and Health Guaranty Association is
Correct Answer
An unfair trade practice
Page 1 of 37
,Question 4
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?
Correct Answer
100% participation of members is required in noncontributory plans
Question 5
In modified life policies, what happens to the premium?
Correct Answer
It is level at the beginning but increases after the first few years
Question 6
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?
Correct Answer
Lower
Question 7
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
Correct Answer
credit life
Page 2 of 37
,Question 8
which of the following statements concerning buy sell agreements is true
Correct Answer
Buy sell agreements are normally funded with a life insurance policy
Question 9
Which universal life option has a gradually increasing cash value and a level death benefit?
Correct Answer
Option A
Question 10
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
Correct Answer
required a premium increase each renewal
Question 11
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?
Correct Answer
consideration
Page 3 of 37
, Question 12
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?
Correct Answer
A portion of the benefit up to a limit is tax free; the rest is taxable income
Question 13
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..
Correct Answer
also be liable for the expenses of the investigation
Question 14
Which of the following is incorrect concerning a noncontributory group plan?
Correct Answer
the employees receive individual policies
Question 15
how long is a free look period for replacement policies?
Correct Answer
30 days
Page 4 of 37
