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NC LIFE AND HEALTH INSURANCE
QUESTIONS WITH 100% CORRECT
SOLUTIONS | GUARANTEED SUCCESS.
Which of the following is NOT a characteristic of universal life
insurance?
A Flexible death benefit
B Cash account
C Fixed premium
D Unbundled premium - correct answer- C
Universal life policies allow the policy owner to increase the
amount of premium going into the policy and to later decrease it
again. They may even skip a premium payment. The rest of the
features apply to universal life policies.
Which of the following would help prevent a universal life policy
from lapsing?
A Corridor of insurance
B Target premium
C Face amount
D Adjustable premium - correct answer- B
The target premium is a recommended amount that should be
paid on a policy in order to cover the cost of insurance
protection and to keep the policy in force throughout its lifetime.
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A 20-year family income policy was purchased effective April 1,
2001. The insured died four months later, on August 1, 2001.
The beneficiary receives monthly income for
A10 years.
B19 years and 8 months.
C9 years and 8 months.
D20 years. - correct answer- B
Monthly benefits paid for the remainder of the 20 year benefit
period.
When the breadwinner that is insured by a Family Policy dies,
what rights are provided to other family members that are
covered under the policy?
AThey can convert their coverage to permanent life insurance
with evidence of insurability.
BFamily members are not provided any rights.
CThey can surrender the coverage for its cash value.
DThey can convert their coverage to permanent life insurance
without evidence of insurability. - correct answer- D
Family members may convert their term coverage to permanent
insurance if requested within the time stated in the policy.
Which of the following types of insurance policies would provide
the greatest amount of protection for a temporary period during
which an insured will have limited financial resources?
AVariable life
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BTerm
CWhole Life
DAnnuity - correct answer- B
Term insurance provides a death benefit only; cost per $1,000
of coverage is less than other types of policies that create cash
values.
Review Content
A Universal Life insurance policy has two types of interest rate
that are called
AFixed and Variable
BMinimum and Target
CGuaranteed and Current
DOption A and Option B - correct answer- C
The insurer credits the cash value in the policy with a current
(nonguaranteed) interest rate and backs the cash value with a
contract (lower guaranteed) rate of interest.
What are the two components of a universal policy?
AInsurance and investments
BMortality cost and interest
CSeparate account and policy loans
DInsurance and cash account - correct answer- D
A universal policy has two components: an insurance
component and a cash account. The insurance component of a
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universal life policy is always annual renewable term insurance.
The cash account accumulates on a tax deferred basis each
year and earns either the guaranteed contract rate or the
current rate, whichever is higher.
What is the purpose of establishing the target premium for a
universal life policy?
ATo pay up the policy faster
BTo cover all policy expenses
CTo keep the policy in force
DTo accumulate cash value faster - correct answer- C
The target premium is a recommended amount that should be
paid on a policy in order to cover the cost of insurance
protection and to keep the policy in force throughout its lifetime.
Which of the following is an example of a limited-pay life policy?
ALevel Term Life
BStraight Life
CLife Paid-up at Age 65
DRenewable Term to Age 70 - correct answer- C
Limited Pay Whole Life premiums are all paid by the time the
insured reaches age 65. The policy endows when the insured
turns 100. It is the premium paying period that is limited, not the
maturity.
NC LIFE AND HEALTH INSURANCE
QUESTIONS WITH 100% CORRECT
SOLUTIONS | GUARANTEED SUCCESS.
Which of the following is NOT a characteristic of universal life
insurance?
A Flexible death benefit
B Cash account
C Fixed premium
D Unbundled premium - correct answer- C
Universal life policies allow the policy owner to increase the
amount of premium going into the policy and to later decrease it
again. They may even skip a premium payment. The rest of the
features apply to universal life policies.
Which of the following would help prevent a universal life policy
from lapsing?
A Corridor of insurance
B Target premium
C Face amount
D Adjustable premium - correct answer- B
The target premium is a recommended amount that should be
paid on a policy in order to cover the cost of insurance
protection and to keep the policy in force throughout its lifetime.
,2 | Page
A 20-year family income policy was purchased effective April 1,
2001. The insured died four months later, on August 1, 2001.
The beneficiary receives monthly income for
A10 years.
B19 years and 8 months.
C9 years and 8 months.
D20 years. - correct answer- B
Monthly benefits paid for the remainder of the 20 year benefit
period.
When the breadwinner that is insured by a Family Policy dies,
what rights are provided to other family members that are
covered under the policy?
AThey can convert their coverage to permanent life insurance
with evidence of insurability.
BFamily members are not provided any rights.
CThey can surrender the coverage for its cash value.
DThey can convert their coverage to permanent life insurance
without evidence of insurability. - correct answer- D
Family members may convert their term coverage to permanent
insurance if requested within the time stated in the policy.
Which of the following types of insurance policies would provide
the greatest amount of protection for a temporary period during
which an insured will have limited financial resources?
AVariable life
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BTerm
CWhole Life
DAnnuity - correct answer- B
Term insurance provides a death benefit only; cost per $1,000
of coverage is less than other types of policies that create cash
values.
Review Content
A Universal Life insurance policy has two types of interest rate
that are called
AFixed and Variable
BMinimum and Target
CGuaranteed and Current
DOption A and Option B - correct answer- C
The insurer credits the cash value in the policy with a current
(nonguaranteed) interest rate and backs the cash value with a
contract (lower guaranteed) rate of interest.
What are the two components of a universal policy?
AInsurance and investments
BMortality cost and interest
CSeparate account and policy loans
DInsurance and cash account - correct answer- D
A universal policy has two components: an insurance
component and a cash account. The insurance component of a
, 4 | Page
universal life policy is always annual renewable term insurance.
The cash account accumulates on a tax deferred basis each
year and earns either the guaranteed contract rate or the
current rate, whichever is higher.
What is the purpose of establishing the target premium for a
universal life policy?
ATo pay up the policy faster
BTo cover all policy expenses
CTo keep the policy in force
DTo accumulate cash value faster - correct answer- C
The target premium is a recommended amount that should be
paid on a policy in order to cover the cost of insurance
protection and to keep the policy in force throughout its lifetime.
Which of the following is an example of a limited-pay life policy?
ALevel Term Life
BStraight Life
CLife Paid-up at Age 65
DRenewable Term to Age 70 - correct answer- C
Limited Pay Whole Life premiums are all paid by the time the
insured reaches age 65. The policy endows when the insured
turns 100. It is the premium paying period that is limited, not the
maturity.
