NC Life Insurance Exam 2025/2026
Comprehensive 80 Questions with
Verified Correct Answers and Complete
Solutions (100% Accurate)
This 2025 North Carolina Life Insurance Exam includes 80 verified questions on licensing,
policy types, contracts, underwriting, regulations, and state-specific laws. Questions are
multiple-choice with four options, the correct answer in RED, and complete solutions for 100%
accuracy.
Question 1: What is the primary purpose of life insurance?
A. To provide retirement income
B. To replace lost income upon death
C. To fund college education
D. To pay for medical expenses
Correct Answer: B. To replace lost income upon death
Solution: Life insurance provides financial protection for beneficiaries.
Question 2: Which type of life insurance has no cash value?
A. Whole life
B. Universal life
C. Term life
D. Variable life
Correct Answer: C. Term life
Solution: Term life covers a specific period without savings component.
Question 3: The incontestability clause applies after:
A. 1 year
B. 2 years
C. 5 years
D. 10 years
Correct Answer: B. 2 years
Solution: NC law: 2 years from policy issue for contestability.
,Question 4: What is the grace period for premium payment in NC?
A. 10 days
B. 20 days
C. 30 days
D. 31 days
Correct Answer: D. 31 days
Solution: NC requires 31 days for individual policies.
Question 5: Which is not a requirement for life insurance license in NC?
A. Pass exam
B. Be 18 years old
C. Complete pre-licensing course
D. Have a high school diploma
Correct Answer: D. Have a high school diploma
Solution: No education requirement specified.
Question 6: The free look period in NC is:
A. 10 days
B. 15 days
C. 20 days
D. 30 days
Correct Answer: A. 10 days
Solution: 10 days to review and return policy.
Question 7: Which is a whole life policy feature?
A. No cash value
B. Premiums increase over time
C. Guaranteed cash value
D. Term coverage
Correct Answer: C. Guaranteed cash value
Solution: Builds savings.
Question 8: Misrepresentation is grounds for:
A. Policy cancellation
B. No action
C. Refund only
D. Fine only
, Correct Answer: A. Policy cancellation
Solution: If material to risk.
Question 9: The suicide clause is:
A. 1 year
B. 2 years
C. 3 years
D. No limit
Correct Answer: B. 2 years
Solution: No payout if suicide within 2 years.
Question 10: Replacement regulation in NC requires:
A. No notice
B. Notice to existing insurer
C. Only to agent
D. Only to client
Correct Answer: B. Notice to existing insurer
Solution: Within 3 days.
Question 11: Universal life policy:
A. Fixed premium
B. Flexible premium and death benefit
C. No cash value
D. Term only
Correct Answer: B. Flexible premium and death benefit
Solution: Adjustable.
Question 12: Variable life invests in:
A. Bonds only
B. Stocks and securities
C. Guaranteed funds
D. No investment
Correct Answer: B. Stocks and securities
Solution: Market risk.
Comprehensive 80 Questions with
Verified Correct Answers and Complete
Solutions (100% Accurate)
This 2025 North Carolina Life Insurance Exam includes 80 verified questions on licensing,
policy types, contracts, underwriting, regulations, and state-specific laws. Questions are
multiple-choice with four options, the correct answer in RED, and complete solutions for 100%
accuracy.
Question 1: What is the primary purpose of life insurance?
A. To provide retirement income
B. To replace lost income upon death
C. To fund college education
D. To pay for medical expenses
Correct Answer: B. To replace lost income upon death
Solution: Life insurance provides financial protection for beneficiaries.
Question 2: Which type of life insurance has no cash value?
A. Whole life
B. Universal life
C. Term life
D. Variable life
Correct Answer: C. Term life
Solution: Term life covers a specific period without savings component.
Question 3: The incontestability clause applies after:
A. 1 year
B. 2 years
C. 5 years
D. 10 years
Correct Answer: B. 2 years
Solution: NC law: 2 years from policy issue for contestability.
,Question 4: What is the grace period for premium payment in NC?
A. 10 days
B. 20 days
C. 30 days
D. 31 days
Correct Answer: D. 31 days
Solution: NC requires 31 days for individual policies.
Question 5: Which is not a requirement for life insurance license in NC?
A. Pass exam
B. Be 18 years old
C. Complete pre-licensing course
D. Have a high school diploma
Correct Answer: D. Have a high school diploma
Solution: No education requirement specified.
Question 6: The free look period in NC is:
A. 10 days
B. 15 days
C. 20 days
D. 30 days
Correct Answer: A. 10 days
Solution: 10 days to review and return policy.
Question 7: Which is a whole life policy feature?
A. No cash value
B. Premiums increase over time
C. Guaranteed cash value
D. Term coverage
Correct Answer: C. Guaranteed cash value
Solution: Builds savings.
Question 8: Misrepresentation is grounds for:
A. Policy cancellation
B. No action
C. Refund only
D. Fine only
, Correct Answer: A. Policy cancellation
Solution: If material to risk.
Question 9: The suicide clause is:
A. 1 year
B. 2 years
C. 3 years
D. No limit
Correct Answer: B. 2 years
Solution: No payout if suicide within 2 years.
Question 10: Replacement regulation in NC requires:
A. No notice
B. Notice to existing insurer
C. Only to agent
D. Only to client
Correct Answer: B. Notice to existing insurer
Solution: Within 3 days.
Question 11: Universal life policy:
A. Fixed premium
B. Flexible premium and death benefit
C. No cash value
D. Term only
Correct Answer: B. Flexible premium and death benefit
Solution: Adjustable.
Question 12: Variable life invests in:
A. Bonds only
B. Stocks and securities
C. Guaranteed funds
D. No investment
Correct Answer: B. Stocks and securities
Solution: Market risk.
