NC Life Insurance Practice Exam 2025/2026
Questions With Correct Answers
All of the following are included within the Insurance Commissioner's duties EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing insurance law is
not the Insurance Commissioner's responsibility, but enforcing the law is. ✔✔c) Writing North
Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but enforcing the law
is.
Which of the following insurance providers must be nonprofit and sell insurance only to its
members?
a) Reciprocal
b) Fraternal
,c) Service
d) Mutual ✔✔b) Fraternal
To be characterized as a fraternal benefit society, the organization must be nonprofit, have a
lodge system that includes ritualistic work and maintain a representative form of government
with elected officers. Insurance may only be sold to members of the society.
A married couple owns a permanent policy which covers both of their lives and pays the death
benefit only upon the death of the first insured. Which policy is that?
a) Second-to-Die
b) Family Income Policy
c) Joint Life Policy
d) Survivorship Life Policy ✔✔c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first
insured, the policy ends.
,The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental
death was killed in a car accident. It was determined that the accident was his fault. The triple
indemnity rider in the policy specifies that the death must not be contributed to by the insured in
any manner. In this case, what will the policy beneficiary receive?
a) $0
b) $50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value) ✔✔c)$100,000
The triple indemnity accidental death rider obligates the company to pay three times the face
amount of the policy if the insured dies as a result of an accident. The death must be accidental
and not contributed to by any other factors and must occur within 90 days of the accident. In this
case, since the insured contributed to his own death, the triple indemnity rider is void, but the
beneficiary will still receive the policy's death benefit.
In term policies, what happens to the premium throughout the term of the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
, c) Premium fluctuates.
d) Premium always remains level. ✔✔d) Premium always remains level.
There are three basic types of term coverage available, based on how the face amount (death
benefit) changes during the policy term: Level, Increasing, and Decreasing. Regardless of the
type of term insurance purchased, the premium is often level throughout the term of the policy.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith ✔✔c) Consideration
The binding force in any contract is consideration. Consideration on the part of the insured is the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the event of loss.
Questions With Correct Answers
All of the following are included within the Insurance Commissioner's duties EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing insurance law is
not the Insurance Commissioner's responsibility, but enforcing the law is. ✔✔c) Writing North
Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but enforcing the law
is.
Which of the following insurance providers must be nonprofit and sell insurance only to its
members?
a) Reciprocal
b) Fraternal
,c) Service
d) Mutual ✔✔b) Fraternal
To be characterized as a fraternal benefit society, the organization must be nonprofit, have a
lodge system that includes ritualistic work and maintain a representative form of government
with elected officers. Insurance may only be sold to members of the society.
A married couple owns a permanent policy which covers both of their lives and pays the death
benefit only upon the death of the first insured. Which policy is that?
a) Second-to-Die
b) Family Income Policy
c) Joint Life Policy
d) Survivorship Life Policy ✔✔c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death of the first
insured, the policy ends.
,The insured under a $100,000 life insurance policy with a triple indemnity rider for accidental
death was killed in a car accident. It was determined that the accident was his fault. The triple
indemnity rider in the policy specifies that the death must not be contributed to by the insured in
any manner. In this case, what will the policy beneficiary receive?
a) $0
b) $50,000 (50% of the policy value)
c)$100,000
d)$300,000 (triple the amount of policy value) ✔✔c)$100,000
The triple indemnity accidental death rider obligates the company to pay three times the face
amount of the policy if the insured dies as a result of an accident. The death must be accidental
and not contributed to by any other factors and must occur within 90 days of the accident. In this
case, since the insured contributed to his own death, the triple indemnity rider is void, but the
beneficiary will still receive the policy's death benefit.
In term policies, what happens to the premium throughout the term of the policy?
a) Premium gradually increases.
b) Premium gradually decreases.
, c) Premium fluctuates.
d) Premium always remains level. ✔✔d) Premium always remains level.
There are three basic types of term coverage available, based on how the face amount (death
benefit) changes during the policy term: Level, Increasing, and Decreasing. Regardless of the
type of term insurance purchased, the premium is often level throughout the term of the policy.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which
of the following insurance principles has the insurer violated?
a) Representation
b) Adhesion
c) Consideration
d) Good faith ✔✔c) Consideration
The binding force in any contract is consideration. Consideration on the part of the insured is the
payment of premiums and the health representations made in the application. Consideration on
the part of the insurer is the promise to pay in the event of loss.
