NC LIFE INSURANCE EXAM PREP AL
QUESTIONS AND VERIFIED ANSWERS
| LATEST 2026-2027 VERSION | RATED
A + | NEW AND REVISED
A life policy with a death benefit that can fluctuate according to the
performance of its underlying investment portfolio is referred to as -
ANSWER- Variable life
If an annuity is terminated prior to the beginning of the income payment
period, the contract owner receives - ANSWER- 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 -
ANSWER- Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy
additional coverage? - ANSWER- 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? - ANSWER-
Income that cannot be outlived by the owner
,A level premium indicates - ANSWER- 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? - ANSWER- Daughter
Which of the following statements is correct about the period in which a
Term Policy can be converted? - ANSWER- 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? - ANSWER- 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? - ANSWER- Proceed will go to the contingent
beneficiary
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? -
ANSWER- Return of Premium rider
,One of the stated purposes of the Life and Health Insurance Guaranty
Association is to - ANSWER- 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 -
ANSWER- Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a
form of Term coverage? - ANSWER- Variable universal life
Under a renewable term policy, - ANSWER- 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)
- ANSWER- Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty
Association in NC apply to - ANSWER- 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? - ANSWER- 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 - ANSWER- 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
- ANSWER- Viatical Settlement
When an employee is terminated, which statement about a group term
life conversion is true? - ANSWER- 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? - ANSWER- 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? - ANSWER- 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 - ANSWER- Life and Health Insurance Guaranty Association
A policy that becomes a Modified Endowment Contract (MEC) -
ANSWER- Will lose many of its tax advantage
QUESTIONS AND VERIFIED ANSWERS
| LATEST 2026-2027 VERSION | RATED
A + | NEW AND REVISED
A life policy with a death benefit that can fluctuate according to the
performance of its underlying investment portfolio is referred to as -
ANSWER- Variable life
If an annuity is terminated prior to the beginning of the income payment
period, the contract owner receives - ANSWER- 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 -
ANSWER- Policy Loan Provision
When does a Guaranteed Insurability Rider allow the insured to buy
additional coverage? - ANSWER- 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? - ANSWER-
Income that cannot be outlived by the owner
,A level premium indicates - ANSWER- 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? - ANSWER- Daughter
Which of the following statements is correct about the period in which a
Term Policy can be converted? - ANSWER- 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? - ANSWER- 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? - ANSWER- Proceed will go to the contingent
beneficiary
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? -
ANSWER- Return of Premium rider
,One of the stated purposes of the Life and Health Insurance Guaranty
Association is to - ANSWER- 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 -
ANSWER- Comparisons showing that a policy has higher benefits
Which of the following policies combines investment choices with a
form of Term coverage? - ANSWER- Variable universal life
Under a renewable term policy, - ANSWER- 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)
- ANSWER- Decreasing term rider
The rules and regulations of the Life and Health Insurance Guaranty
Association in NC apply to - ANSWER- 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? - ANSWER- 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 - ANSWER- 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
- ANSWER- Viatical Settlement
When an employee is terminated, which statement about a group term
life conversion is true? - ANSWER- 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? - ANSWER- 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? - ANSWER- 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 - ANSWER- Life and Health Insurance Guaranty Association
A policy that becomes a Modified Endowment Contract (MEC) -
ANSWER- Will lose many of its tax advantage
