NC LIFE INSURANCE EXAM PREP QUESTIONS &
ANSWERS
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner - Answers - A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT - Answers - Sharing
commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide? - Answers -
Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance - Answers - Is
guilty of a misdemeanor
A person is required to be AT LEAST how old before he or she is licensed as an agent
in NC? - Answers - 18
In a life insurance policy, which feature states that the policy will not cover certain risks?
- Answers - Exclusion
A 15-year mortgage is best protected by what kind of life policy? - Answers - 15-year
decreasing term
Companies in NC may transact solicitations for insurance ONLY through - Answers -
Licensed agents
Which of these retirement plans can be started by an employee, even if another plan is
in existence - Answers - Individual Retirement Account (IRA)
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as - Answers - Variable life
If an annuity is terminated prior to the beginning of the income payment period, the
contract owner receives - Answers - The contract surrender value at that time
A provision in a life insurance policy that pays the policy owner an amount that doesn't
surpass the guaranteed cash value is called the - Answers - Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage? - Answers - At future dates specified in the contract with no evidence of
insurability required
,T, age 70, withdrawals cash from a profit-sharing plan and purchases a Straight Life
Annuity. What will this transaction provide? - Answers - Income that cannot be outlived
by the owner
A level premium indicates - Answers - The premium is fixed for the entire duration of
the contract
K has a life insurance policy where her husband is beneficiary and her daughter is
contingent beneficiary. Under the Common Disaster clause, if K and her husband are
both killed in an automobile accident, where would the death proceeds be directed? -
Answers - Daughter
Which of the following statements is correct about the period in which a Term Policy can
be converted? - Answers - It can be changed by the insured
What group term life feature permits an individual to depart from the group and continue
to be converted without providing evidence of insurability? - Answers - Conversion
An insured covered by life insurance has just died. What will happen if the primary
beneficiary had already died before the insured and contingent beneficiary? - Answers
- Proceed will go to the contingent beneficiary
Whole Life insurance are contractually guaranteed to provide each of the following
EXCEPT? - Answers - Partial withdrawal features beyond a surrender charge period
A term life insurance policy matures - Answers - Upon the insured's death during the
term of the policy
Which of these provisions require proof of insurability after a policy has lapsed? -
Answers - Reinstatement
How does a typical Variable Life Policy Investment account grow? - Answers -
Through mutual funds, stocks, and bonds
Circulation of any oral or written statement or any pamphlet, circular, article or literature
that is false or maliciously critical of or derogatory to the financial condition of an insurer
is known as - Answers - Defamation
All of the following are considered characteristics describing the nature of an insurance
contract EXCEPT - Answers - Bilateral
S buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100. S
dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of
rider did S include on the policy? - Answers - Return of Premium rider
, One of the stated purposes of the Life and Health Insurance Guaranty Association is to
- Answers - Assist in the prevention of insurer insolvencies
The following acts are examples of unfair methods of competition and deceptive
practices in the business of insurance EXCEPT the use for - Answers - Comparisons
showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage? - Answers - Variable universal life
Under a renewable term policy, - Answers - The renewal premium is calculated on the
basis of the insured's attained age
Additional coverage can be added to a Whole Life policy by adding a(n) - Answers -
Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty Association in NC
apply to - Answers - Life and Health policies insured by companies authorized in NC
What type of life policy covers 2 people and pays upon the death of the last insured? -
Answers - Survivorship
K works for XYZ clothing store from September through December each year. K works
4 hours a week for this period of time. The employer's Group Policy would consider K -
Answers - Not eligible for the insurance because as a seasonal employee K doesn't
meet the definition of "employee" under NC law
A written agreement to provide a Life Insurance Policyholder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a - Answers - Viatical
Settlement
When an employee is terminated, which statement about a group term life conversion is
true? - Answers - Policy proceeds will be paid if the employee dies during the
conversion period
A 42 year old executive wants to purchase life insurance that will allow for increases or
decreases to coverage as his/her needs change. Which of the following policies will
best meet this need? - Answers - Universal life
What kind of life insurance policy pays a specified monthly income to a beneficiary for
30 years and then pays a lump sum benefit at the end of that 30 years? - Answers -
Family Maintenance Policy
The fund that assures policyholders payment of death benefits on Life Policies, if the
company is insolvent at the same time of the claim, is called the - Answers - Life and
Health Insurance Guaranty Association
ANSWERS
An agent who sells an individual life insurance policy in NC MUST deliver to the
policyowner - Answers - A policy summary and buyer's guide
All of the following actions are considered rebating EXCEPT - Answers - Sharing
commissions with other licensed and appointed agents
What benefit does the Payor Clause on a Juvenile Life Policy provide? - Answers -
Premiums are waived if payor becomes disabled
An agent who signs a blank contract application or policy of insurance - Answers - Is
guilty of a misdemeanor
A person is required to be AT LEAST how old before he or she is licensed as an agent
in NC? - Answers - 18
In a life insurance policy, which feature states that the policy will not cover certain risks?
- Answers - Exclusion
A 15-year mortgage is best protected by what kind of life policy? - Answers - 15-year
decreasing term
Companies in NC may transact solicitations for insurance ONLY through - Answers -
Licensed agents
Which of these retirement plans can be started by an employee, even if another plan is
in existence - Answers - Individual Retirement Account (IRA)
A life policy with a death benefit that can fluctuate according to the performance of its
underlying investment portfolio is referred to as - Answers - Variable life
If an annuity is terminated prior to the beginning of the income payment period, the
contract owner receives - Answers - The contract surrender value at that time
A provision in a life insurance policy that pays the policy owner an amount that doesn't
surpass the guaranteed cash value is called the - Answers - Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy additional
coverage? - Answers - At future dates specified in the contract with no evidence of
insurability required
,T, age 70, withdrawals cash from a profit-sharing plan and purchases a Straight Life
Annuity. What will this transaction provide? - Answers - Income that cannot be outlived
by the owner
A level premium indicates - Answers - The premium is fixed for the entire duration of
the contract
K has a life insurance policy where her husband is beneficiary and her daughter is
contingent beneficiary. Under the Common Disaster clause, if K and her husband are
both killed in an automobile accident, where would the death proceeds be directed? -
Answers - Daughter
Which of the following statements is correct about the period in which a Term Policy can
be converted? - Answers - It can be changed by the insured
What group term life feature permits an individual to depart from the group and continue
to be converted without providing evidence of insurability? - Answers - Conversion
An insured covered by life insurance has just died. What will happen if the primary
beneficiary had already died before the insured and contingent beneficiary? - Answers
- Proceed will go to the contingent beneficiary
Whole Life insurance are contractually guaranteed to provide each of the following
EXCEPT? - Answers - Partial withdrawal features beyond a surrender charge period
A term life insurance policy matures - Answers - Upon the insured's death during the
term of the policy
Which of these provisions require proof of insurability after a policy has lapsed? -
Answers - Reinstatement
How does a typical Variable Life Policy Investment account grow? - Answers -
Through mutual funds, stocks, and bonds
Circulation of any oral or written statement or any pamphlet, circular, article or literature
that is false or maliciously critical of or derogatory to the financial condition of an insurer
is known as - Answers - Defamation
All of the following are considered characteristics describing the nature of an insurance
contract EXCEPT - Answers - Bilateral
S buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100. S
dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of
rider did S include on the policy? - Answers - Return of Premium rider
, One of the stated purposes of the Life and Health Insurance Guaranty Association is to
- Answers - Assist in the prevention of insurer insolvencies
The following acts are examples of unfair methods of competition and deceptive
practices in the business of insurance EXCEPT the use for - Answers - Comparisons
showing that a policy has higher benefits
Which of the following policies combines investment choices with a form of Term
coverage? - Answers - Variable universal life
Under a renewable term policy, - Answers - The renewal premium is calculated on the
basis of the insured's attained age
Additional coverage can be added to a Whole Life policy by adding a(n) - Answers -
Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty Association in NC
apply to - Answers - Life and Health policies insured by companies authorized in NC
What type of life policy covers 2 people and pays upon the death of the last insured? -
Answers - Survivorship
K works for XYZ clothing store from September through December each year. K works
4 hours a week for this period of time. The employer's Group Policy would consider K -
Answers - Not eligible for the insurance because as a seasonal employee K doesn't
meet the definition of "employee" under NC law
A written agreement to provide a Life Insurance Policyholder immediate cash in
exchange for the sale and transfer of a Life Insurance Policy is a - Answers - Viatical
Settlement
When an employee is terminated, which statement about a group term life conversion is
true? - Answers - Policy proceeds will be paid if the employee dies during the
conversion period
A 42 year old executive wants to purchase life insurance that will allow for increases or
decreases to coverage as his/her needs change. Which of the following policies will
best meet this need? - Answers - Universal life
What kind of life insurance policy pays a specified monthly income to a beneficiary for
30 years and then pays a lump sum benefit at the end of that 30 years? - Answers -
Family Maintenance Policy
The fund that assures policyholders payment of death benefits on Life Policies, if the
company is insolvent at the same time of the claim, is called the - Answers - Life and
Health Insurance Guaranty Association
