NC LIFE INSURANCE EXAM SCRIPT
QUESTIONS WITH FULL SOLUTIONS 2026
◉ Fraternal Benefit Societies. Answer: Agents of these societies must
comply with the SAME general laws governing licensing that apply
to resident and nonresident agents.
◉ Graded Premium Whole Life. Answer: Has premiums they start
very low then increase annually for a long period and stay level for
the rest of the life of the policy.
◉ Death Benefit Option 1 of a universal life policy. Answer: the
benefit payable when the insured dies stays level and equal to the
initial specified amount.
◉ Death Benefit Option 2 of a universal life policy. Answer: this
benefit is generally increasing. This benefit equals the policy's
specified amount plus the cash value.
◉ Variable Universal Life insurance. Answer: Combines the features
of universal life insurane with the ability to allocate premiums to a
seperate account. THIS MEANS the growth of the contract's cash
value is based on the performance of the underlying investment.
,◉ Straight Life Income. Answer: provides the largest monthly
income payment for a given amount o annualized funds. Also called
pure life option, income payments are made for the annuitants
lifetime, regardless of how long that may be.
◉ In regards to the Section 1035 tax code, which exchanges is
permitted on a tax-free basis?. Answer: 1. life insurance for life
insurance
2. Life insurance for an endowment
3.Endowment for an Endowment
4.Life insurance for an Annuity
5. Annuity for an Annuity
◉ Modified Endowment Contract (MEC). Answer: Tax law considers
a single premium life insurance policy to be what?
◉ Anthony becomes an agent for Acme Insurance Company. Acme
has not filed the Notice of appointment with the commissioner. It
must do so within how many days?. Answer: 15 Days
◉ Spendthrift Clause. Answer: A clause that prevents the debtors of
a beneficiary from collecting the benefits before he/she receives
them.
,◉ Annuity death benefits. Answer: are not tax deductible or tax free
◉ A couple makes a combined income for $175,000 annually.Will
their Individual Retirement Plan (IRA) be tax deductible?. Answer:
No. If it is joint an dover $123,000 there is no deduction.
◉ What is the cap on an IRA tax deduction that will provide NO
DEDUCTION for a single person?. Answer: $74000 or more.
◉ Prepaid Tuition Plans. Answer: College saving plan that allows for
the purchase of units or credits at participating colleges and
universities for future tuition. Limited to instate tuition only. NOT
SUBJECT TO FEDERAL TAX. Parents are able to lock in the price of
tuition at that time.
◉ risk sharing. Answer: Allocating ownership of a risk to another
party
◉ Risk Transfer. Answer: A pure risk is transferred from the insured
to the insurer, who typically is in a stronger financial position
◉ Which is a characteristic of industrial life Insurance?. Answer:
Premiums are payable monthly or weekly.
, ◉ Industrial Life Insurance. Answer: These policies generally do not
require a medical exam to qualify. They offer individual coverage in
small face amounts usually less than $10,000.
◉ Reinsurance. Answer: an arrangement by which the primary
insurer that initially writes the insurance transfers to another
insurer part or all of the potential losses associated with such
insurance
◉ How long do insurers allow backdating a policy in order to receive
lower rates?. Answer: 6 Months
◉ What are the differences between mutual insurance companies
and stock insurance companies?. Answer: Mutual insurance
companies are owned by its policy holders while stock insurance
companies are owned by stockholders who may or may not be
policy holders. Mutual Insurance companies sell participating
policies which distributes policy dividends that are NONTAXABLE
while Stock companies distribute profit in the form of taxable stock
dividends.
◉ Which of the following individuals would be most likely to enter
into a viatical settlement?. Answer: Ben, who is terminally ill and
needs money to pay his medical bills
QUESTIONS WITH FULL SOLUTIONS 2026
◉ Fraternal Benefit Societies. Answer: Agents of these societies must
comply with the SAME general laws governing licensing that apply
to resident and nonresident agents.
◉ Graded Premium Whole Life. Answer: Has premiums they start
very low then increase annually for a long period and stay level for
the rest of the life of the policy.
◉ Death Benefit Option 1 of a universal life policy. Answer: the
benefit payable when the insured dies stays level and equal to the
initial specified amount.
◉ Death Benefit Option 2 of a universal life policy. Answer: this
benefit is generally increasing. This benefit equals the policy's
specified amount plus the cash value.
◉ Variable Universal Life insurance. Answer: Combines the features
of universal life insurane with the ability to allocate premiums to a
seperate account. THIS MEANS the growth of the contract's cash
value is based on the performance of the underlying investment.
,◉ Straight Life Income. Answer: provides the largest monthly
income payment for a given amount o annualized funds. Also called
pure life option, income payments are made for the annuitants
lifetime, regardless of how long that may be.
◉ In regards to the Section 1035 tax code, which exchanges is
permitted on a tax-free basis?. Answer: 1. life insurance for life
insurance
2. Life insurance for an endowment
3.Endowment for an Endowment
4.Life insurance for an Annuity
5. Annuity for an Annuity
◉ Modified Endowment Contract (MEC). Answer: Tax law considers
a single premium life insurance policy to be what?
◉ Anthony becomes an agent for Acme Insurance Company. Acme
has not filed the Notice of appointment with the commissioner. It
must do so within how many days?. Answer: 15 Days
◉ Spendthrift Clause. Answer: A clause that prevents the debtors of
a beneficiary from collecting the benefits before he/she receives
them.
,◉ Annuity death benefits. Answer: are not tax deductible or tax free
◉ A couple makes a combined income for $175,000 annually.Will
their Individual Retirement Plan (IRA) be tax deductible?. Answer:
No. If it is joint an dover $123,000 there is no deduction.
◉ What is the cap on an IRA tax deduction that will provide NO
DEDUCTION for a single person?. Answer: $74000 or more.
◉ Prepaid Tuition Plans. Answer: College saving plan that allows for
the purchase of units or credits at participating colleges and
universities for future tuition. Limited to instate tuition only. NOT
SUBJECT TO FEDERAL TAX. Parents are able to lock in the price of
tuition at that time.
◉ risk sharing. Answer: Allocating ownership of a risk to another
party
◉ Risk Transfer. Answer: A pure risk is transferred from the insured
to the insurer, who typically is in a stronger financial position
◉ Which is a characteristic of industrial life Insurance?. Answer:
Premiums are payable monthly or weekly.
, ◉ Industrial Life Insurance. Answer: These policies generally do not
require a medical exam to qualify. They offer individual coverage in
small face amounts usually less than $10,000.
◉ Reinsurance. Answer: an arrangement by which the primary
insurer that initially writes the insurance transfers to another
insurer part or all of the potential losses associated with such
insurance
◉ How long do insurers allow backdating a policy in order to receive
lower rates?. Answer: 6 Months
◉ What are the differences between mutual insurance companies
and stock insurance companies?. Answer: Mutual insurance
companies are owned by its policy holders while stock insurance
companies are owned by stockholders who may or may not be
policy holders. Mutual Insurance companies sell participating
policies which distributes policy dividends that are NONTAXABLE
while Stock companies distribute profit in the form of taxable stock
dividends.
◉ Which of the following individuals would be most likely to enter
into a viatical settlement?. Answer: Ben, who is terminally ill and
needs money to pay his medical bills
