NORTH CAROLINA XCEL TESTING
LIFE & HEALTH INSURANCE EXAM
STUDY GUIDE QUESTIONS AND
ANSWERS
Which of these actions is taken when a policyowner uses a Life Insurance policy as
collateral for a bank loan? - ANSWER-Collateral assignment
The policyholder has how many days to return an Accident/Health Insurance Policy
and receive a full refund on premiums? - ANSWER-10
The Legal Actions provision of an insurance contract is designed to do all of the
following, EXCEPT: - ANSWER-protect the producer
A Limited-Pay Life policy has: - ANSWER-premium payments limited to a specified
number of years
An individual working part-time has an annual income of $25,000. If this individual
has an IRA, what is the maximum deductible IRA contribution allowable? -
ANSWER-$25,000
An insurance company MUST clearly specify questions designed to obtain
information solely for marketing research - ANSWER-in any insurance transaction
A vacancy that occurs during the North Carolina Commissioner of Insurance's term
of office MUST be filled by the - ANSWER-Governor
Every Group Health Policy providing benefits for chemical dependency treatments
must include, for the life of the contract, a - ANSWER-minimum benefit of $16,000
An example of rebating would be - ANSWER-offering a client something of value not
stated in the contract in exchange for their business
If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds,
the insurer must pay interest on the proceeds after how many days? - ANSWER-30
A written agreement to provide a Life Insurance Policy holder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a - ANSWER-Viatical
Settlement
When L applies for a Health Insurance Policy, L unintentionally fails to list a previous
visit to a cardiologist. If the insurance company contests the policy, it MUST do so
within 2 years - ANSWER-from the date of issue
, When an employee is terminated, which statement about a group term life
conversion is true? - ANSWER-Policy proceeds will be paid if the employee dies
during the conversion period
Which of these actions should a producer take when submitting an insurance
application to an insurer? - ANSWER-Inform insurer of relevant information not
included on the application
A prepaid application for individual Disability Income insurance was recently
submitted to an insurer. When the insurer received the Medical Information Bureau
(MIB) report, the report showed that the applicant had suffered a stroke 18 months
ago, something that was not disclosed on the application. Which of the following
actions would the insurance company NOT take? - ANSWER-Send a notice to the
MIB that the applicant was declined
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ANSWER-Decreasing term policy
Under a Renewable Term policy, - ANSWER-he renewal premium is calculated on
the basis of the insured's attained age
Which of these are NOT an example of a Nonforfeiture option? - ANSWER-Life
Income
Which type of life policy contains a monthly mortality charge as well as self-directed
investment choices? - ANSWER-Variable Universal Life
Which statement regarding the Change of Beneficiary provision is true? - ANSWER-
The policyowner can change the beneficiary
What do Dread Disease policies cover? - ANSWER-A specific disease or illness
What is the initial requirement for an insured to become eligible for benefits under
the Waiver of Premium provision? - ANSWER-Insured must be under a physician's
care
Which of the following types of insurance is exempt from the Rules Governing Life
Insurance and Annuity Replacements? - ANSWER-Credit Life
A physician opens up a new practice and qualifies for a $7,000/month Disability
Income policy. What rider would the physician add if he wants the ability to increase
his policy benefit as his practice and income grow? - ANSWER-Guaranteed
Insurability Option rider
Which of these is an element of a Single Premium annuity? - ANSWER-Lump-sum
payment
LIFE & HEALTH INSURANCE EXAM
STUDY GUIDE QUESTIONS AND
ANSWERS
Which of these actions is taken when a policyowner uses a Life Insurance policy as
collateral for a bank loan? - ANSWER-Collateral assignment
The policyholder has how many days to return an Accident/Health Insurance Policy
and receive a full refund on premiums? - ANSWER-10
The Legal Actions provision of an insurance contract is designed to do all of the
following, EXCEPT: - ANSWER-protect the producer
A Limited-Pay Life policy has: - ANSWER-premium payments limited to a specified
number of years
An individual working part-time has an annual income of $25,000. If this individual
has an IRA, what is the maximum deductible IRA contribution allowable? -
ANSWER-$25,000
An insurance company MUST clearly specify questions designed to obtain
information solely for marketing research - ANSWER-in any insurance transaction
A vacancy that occurs during the North Carolina Commissioner of Insurance's term
of office MUST be filled by the - ANSWER-Governor
Every Group Health Policy providing benefits for chemical dependency treatments
must include, for the life of the contract, a - ANSWER-minimum benefit of $16,000
An example of rebating would be - ANSWER-offering a client something of value not
stated in the contract in exchange for their business
If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds,
the insurer must pay interest on the proceeds after how many days? - ANSWER-30
A written agreement to provide a Life Insurance Policy holder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a - ANSWER-Viatical
Settlement
When L applies for a Health Insurance Policy, L unintentionally fails to list a previous
visit to a cardiologist. If the insurance company contests the policy, it MUST do so
within 2 years - ANSWER-from the date of issue
, When an employee is terminated, which statement about a group term life
conversion is true? - ANSWER-Policy proceeds will be paid if the employee dies
during the conversion period
Which of these actions should a producer take when submitting an insurance
application to an insurer? - ANSWER-Inform insurer of relevant information not
included on the application
A prepaid application for individual Disability Income insurance was recently
submitted to an insurer. When the insurer received the Medical Information Bureau
(MIB) report, the report showed that the applicant had suffered a stroke 18 months
ago, something that was not disclosed on the application. Which of the following
actions would the insurance company NOT take? - ANSWER-Send a notice to the
MIB that the applicant was declined
F needs life insurance that provides coverage for only a limited amount of time with a
death benefit that changes regularly according to a schedule. What kind of policy is
needed? - ANSWER-Decreasing term policy
Under a Renewable Term policy, - ANSWER-he renewal premium is calculated on
the basis of the insured's attained age
Which of these are NOT an example of a Nonforfeiture option? - ANSWER-Life
Income
Which type of life policy contains a monthly mortality charge as well as self-directed
investment choices? - ANSWER-Variable Universal Life
Which statement regarding the Change of Beneficiary provision is true? - ANSWER-
The policyowner can change the beneficiary
What do Dread Disease policies cover? - ANSWER-A specific disease or illness
What is the initial requirement for an insured to become eligible for benefits under
the Waiver of Premium provision? - ANSWER-Insured must be under a physician's
care
Which of the following types of insurance is exempt from the Rules Governing Life
Insurance and Annuity Replacements? - ANSWER-Credit Life
A physician opens up a new practice and qualifies for a $7,000/month Disability
Income policy. What rider would the physician add if he wants the ability to increase
his policy benefit as his practice and income grow? - ANSWER-Guaranteed
Insurability Option rider
Which of these is an element of a Single Premium annuity? - ANSWER-Lump-sum
payment
