NC Life Insurance Practice Exam Quizzes with
Answers & Definitions.
When an insurer requires a written proof of loss after notice of such loss has been given by the
insured or beneficiary, the company must
a) Request a police report from the Department of Motor Vehicles.
b) Furnish a blank form to be used for that purpose.
c) Document the request for further investigation.
d) Submit the loss claim to underwriting for premium review and resolution. - Answer: b)
Furnish a blank form to be used for that purpose.
When any company under any insurance policy requires a written proof of loss after notice of
such loss has been given by the insured or beneficiary, the company or its representative must
furnish a blank form to be used for that purpose.
Insurance companies are required to provide proof of loss forms to the claimant within how
many days after receipt of notice of loss?
Page 1 of 57
,a) 15
b) 30
c) 31
d) 45 - Answer: a) 15
When any company under any insurance policy requires a written proof of loss after notice of
the loss has been given by the insured or beneficiary, the company must furnish a blank form
within 15 days.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
d) Coverage is allowed up to age 75. - Answer: a) The rider is usually level term insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for a limited
amount of time, typically expiring at age 65. A spouse term rider (just like any other insured
rider) is usually level term insurance.
A policy will pay the death benefit if the insured dies during the 20-year premium-paying
period, and nothing if death occurs after the 20-year period. What type of policy is this?
a)Level term
b)Term to specified age
c)Ordinary life policy
d)Limited pay whole life - Answer: a)Level term
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,A 20-year term policy is written to provide a level death benefit for 20 years.
Which nonforfeiture option provides coverage for the longest period of time?
a)Accumulated at interest
b)Reduced paid-up
c)Extended term
d)Paid-up option - Answer: b)Reduced paid-up
The reduced paid-up nonforfeiture option would provide protection until the insured reaches
100, but the face amount is reduced to what the cash would buy.
Which of the following is NOT true regarding the accumulation period of an annuity?
a)It is also known as the pay-in period.
b)It would not occur in a deferred annuity.
c)It is the period during which the annuity payments earn interest.
d)It is the period over which the owner makes payments into an annuity. - Answer: b)It would
not occur in a deferred annuity.
The "accumulation period" is the period of time over which the annuity owner makes payments
(premiums) into an annuity. This is the period of time during which the payments earn interest
and grow tax deferred (which would be the case in a deferred annuity).
Life insurance death proceeds are
a)Taxed as ordinary income.
b)Generally not taxed as income.
c)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income.
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, d)Taxed as a capital gain. - Answer: b)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
Which of the following is TRUE regarding an indeterminate premium whole life policy?
a) The premium is lower in the first year of the policy; then it is gradually raised every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
d) The premium can be raised up to a guaranteed maximum rate. - Answer: d) The premium can
be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to year. After the
initial period (usually 2-3 years) when a lower premium is paid, the insurer establishes a new
rate which could be raised up to the guaranteed maximum stated in the policy, kept the same or
lowered, based on the company's expected mortality, expense and investments.
A person who knowingly obtains information about an individual from an agent or the insurer
under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony. - Answer: a) Class 1 misdemeanor.
A person who knowingly obtains information about an individual from an insurer or agent under
false pretenses is guilty of a Class 1 misdemeanor.
The initial amount of credit life insurance may NOT exceed
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Answers & Definitions.
When an insurer requires a written proof of loss after notice of such loss has been given by the
insured or beneficiary, the company must
a) Request a police report from the Department of Motor Vehicles.
b) Furnish a blank form to be used for that purpose.
c) Document the request for further investigation.
d) Submit the loss claim to underwriting for premium review and resolution. - Answer: b)
Furnish a blank form to be used for that purpose.
When any company under any insurance policy requires a written proof of loss after notice of
such loss has been given by the insured or beneficiary, the company or its representative must
furnish a blank form to be used for that purpose.
Insurance companies are required to provide proof of loss forms to the claimant within how
many days after receipt of notice of loss?
Page 1 of 57
,a) 15
b) 30
c) 31
d) 45 - Answer: a) 15
When any company under any insurance policy requires a written proof of loss after notice of
the loss has been given by the insured or beneficiary, the company must furnish a blank form
within 15 days.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
d) Coverage is allowed up to age 75. - Answer: a) The rider is usually level term insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for a limited
amount of time, typically expiring at age 65. A spouse term rider (just like any other insured
rider) is usually level term insurance.
A policy will pay the death benefit if the insured dies during the 20-year premium-paying
period, and nothing if death occurs after the 20-year period. What type of policy is this?
a)Level term
b)Term to specified age
c)Ordinary life policy
d)Limited pay whole life - Answer: a)Level term
Page 2 of 57
,A 20-year term policy is written to provide a level death benefit for 20 years.
Which nonforfeiture option provides coverage for the longest period of time?
a)Accumulated at interest
b)Reduced paid-up
c)Extended term
d)Paid-up option - Answer: b)Reduced paid-up
The reduced paid-up nonforfeiture option would provide protection until the insured reaches
100, but the face amount is reduced to what the cash would buy.
Which of the following is NOT true regarding the accumulation period of an annuity?
a)It is also known as the pay-in period.
b)It would not occur in a deferred annuity.
c)It is the period during which the annuity payments earn interest.
d)It is the period over which the owner makes payments into an annuity. - Answer: b)It would
not occur in a deferred annuity.
The "accumulation period" is the period of time over which the annuity owner makes payments
(premiums) into an annuity. This is the period of time during which the payments earn interest
and grow tax deferred (which would be the case in a deferred annuity).
Life insurance death proceeds are
a)Taxed as ordinary income.
b)Generally not taxed as income.
c)Taxable to the extent that they exceed 7.5% of the beneficiary's adjusted gross income.
Page 3 of 57
, d)Taxed as a capital gain. - Answer: b)Generally not taxed as income.
Life insurance death benefits are generally not taxed as income.
Which of the following is TRUE regarding an indeterminate premium whole life policy?
a) The premium is lower in the first year of the policy; then it is gradually raised every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
d) The premium can be raised up to a guaranteed maximum rate. - Answer: d) The premium can
be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to year. After the
initial period (usually 2-3 years) when a lower premium is paid, the insurer establishes a new
rate which could be raised up to the guaranteed maximum stated in the policy, kept the same or
lowered, based on the company's expected mortality, expense and investments.
A person who knowingly obtains information about an individual from an agent or the insurer
under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony. - Answer: a) Class 1 misdemeanor.
A person who knowingly obtains information about an individual from an insurer or agent under
false pretenses is guilty of a Class 1 misdemeanor.
The initial amount of credit life insurance may NOT exceed
Page 4 of 57
