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North Carolina Insurance Exam ALL VERSIONS
2025 | LATEST AND ACCURATE REAL EXAM
QUESTIONS WITH DETAILED ANSWERS |
VERIFIED FOR GUARANTEED PASS | LATEST
UPDATE
During the application process, a mistake is made by the applicant in answering one of the health
questions and needs to be corrected. What is the best way to go about this?
A Submit the application as is and see if the insurance company catches the mistake
B Have the applicant initial the change or start over with a completely new application
C The producer should simply make a note in the agent report section of the application describing the
error and what the true response was supposed to be
D The licensed producer has the applicant's implied authority to make any necessary changes to the
application on the applicant's behalf
- ANSWER Have the applicant initial the change or start over with a completely new application
Which of the following is true in regard to an Entity Purchase Plan?
A It is an incentive plan for key employees
B The business enters into an agreement to purchase the deceased's interest in the business
C The owners are named as beneficiaries in the policy acquired
D The entity buys life insurance on non-owner key employees
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- ANSWER The business enters into an agreement to purchase the deceased's interest in the business
An entity purchase plan is one which life insurance provides the funds necessary to buy out the business
interest of the deceased.
One characteristic of life insurance is that the insurer is obligated to pay a claim in the event of the death
of the insured, however, the insured is not contractually obligated to do anything other than keep the
policy in force. This is a:
A Contract of Adhesion
B Aleatory Contract
C Unilateral Contract
D Conditional Contract
- ANSWER Unilateral Contract
Only one party is legally bound to contractual obligations after the premium is paid.
A homeowner with a 20-year mortgage needs to cover the mortgage amount with term insurance.
Which of the following would she choose?
A Decreasing Term
B Level Term
C Increasing Term
D Re-entry Term
- ANSWER Decreasing Term
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Angela bought a policy from her friend, an insurance producer. After looking it over thoroughly, Angela
only has one question. Will she receive dividends? She will if the policy is which of the following?
A Participating
B Cash Value Policy
C Nonparticipating
D Accumulating
- ANSWER Participating
Dividends are declared under participating policies, are paid as declared, and are not guaranteed. The
dividends are a return of excess premiums paid.
All of the following are standard provisions of an individual life insurance policy, except:
A The policy is incontestable after 2 years
B The grace period for late payment of premiums is 45 days
C A lapsed policy may be reinstated within 5 years
D Errors in age or gender of the insured may be corrected by adjusting premiums or benefits -
ANSWER The grace period for late payment of premiums is 45 days
Have the home office re-issue the policy for a reduced amount of coverage for the original premium
quoted so that it will be easier to explain at time of delivery - ANSWER Personally deliver the policy,
explain the rating, reinforce the value of the policy, and collect the additional premium
The insurance industry is primarily regulated at the _________ level.
A Federal
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B State
C Insurers
D County
- ANSWER Stat
A Credit Life Policy will be cancelled if:
A The loan is paid off or refinanced
B The premiums increase by more than 10%
C The insurer's credit rating falls below A+
D The coverage is less than the total debt outstanding
- ANSWER The loan is paid off or refinanced
Which of the following is TRUE of a term rider when attached to a permanent life policy?
A It allows the policy to achieve paid up status at the end of the term
B It can provide additional temporary coverage on the insured or on other members of the family
C It only pays out a death benefit in cases of accidental death
D It always is in the amount of the base policy
- ANSWER It can provide additional temporary coverage on the insured or on other members of the
family
The premium charged for new policies obtained by exercising the Guaranteed Insurability Rider is based
upon the:
4
North Carolina Insurance Exam ALL VERSIONS
2025 | LATEST AND ACCURATE REAL EXAM
QUESTIONS WITH DETAILED ANSWERS |
VERIFIED FOR GUARANTEED PASS | LATEST
UPDATE
During the application process, a mistake is made by the applicant in answering one of the health
questions and needs to be corrected. What is the best way to go about this?
A Submit the application as is and see if the insurance company catches the mistake
B Have the applicant initial the change or start over with a completely new application
C The producer should simply make a note in the agent report section of the application describing the
error and what the true response was supposed to be
D The licensed producer has the applicant's implied authority to make any necessary changes to the
application on the applicant's behalf
- ANSWER Have the applicant initial the change or start over with a completely new application
Which of the following is true in regard to an Entity Purchase Plan?
A It is an incentive plan for key employees
B The business enters into an agreement to purchase the deceased's interest in the business
C The owners are named as beneficiaries in the policy acquired
D The entity buys life insurance on non-owner key employees
4
,4
- ANSWER The business enters into an agreement to purchase the deceased's interest in the business
An entity purchase plan is one which life insurance provides the funds necessary to buy out the business
interest of the deceased.
One characteristic of life insurance is that the insurer is obligated to pay a claim in the event of the death
of the insured, however, the insured is not contractually obligated to do anything other than keep the
policy in force. This is a:
A Contract of Adhesion
B Aleatory Contract
C Unilateral Contract
D Conditional Contract
- ANSWER Unilateral Contract
Only one party is legally bound to contractual obligations after the premium is paid.
A homeowner with a 20-year mortgage needs to cover the mortgage amount with term insurance.
Which of the following would she choose?
A Decreasing Term
B Level Term
C Increasing Term
D Re-entry Term
- ANSWER Decreasing Term
4
,4
Angela bought a policy from her friend, an insurance producer. After looking it over thoroughly, Angela
only has one question. Will she receive dividends? She will if the policy is which of the following?
A Participating
B Cash Value Policy
C Nonparticipating
D Accumulating
- ANSWER Participating
Dividends are declared under participating policies, are paid as declared, and are not guaranteed. The
dividends are a return of excess premiums paid.
All of the following are standard provisions of an individual life insurance policy, except:
A The policy is incontestable after 2 years
B The grace period for late payment of premiums is 45 days
C A lapsed policy may be reinstated within 5 years
D Errors in age or gender of the insured may be corrected by adjusting premiums or benefits -
ANSWER The grace period for late payment of premiums is 45 days
Have the home office re-issue the policy for a reduced amount of coverage for the original premium
quoted so that it will be easier to explain at time of delivery - ANSWER Personally deliver the policy,
explain the rating, reinforce the value of the policy, and collect the additional premium
The insurance industry is primarily regulated at the _________ level.
A Federal
4
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B State
C Insurers
D County
- ANSWER Stat
A Credit Life Policy will be cancelled if:
A The loan is paid off or refinanced
B The premiums increase by more than 10%
C The insurer's credit rating falls below A+
D The coverage is less than the total debt outstanding
- ANSWER The loan is paid off or refinanced
Which of the following is TRUE of a term rider when attached to a permanent life policy?
A It allows the policy to achieve paid up status at the end of the term
B It can provide additional temporary coverage on the insured or on other members of the family
C It only pays out a death benefit in cases of accidental death
D It always is in the amount of the base policy
- ANSWER It can provide additional temporary coverage on the insured or on other members of the
family
The premium charged for new policies obtained by exercising the Guaranteed Insurability Rider is based
upon the:
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