NC Life Exam Questions with Verified and Updated Answers

NC Life Exam Questions with Verified and Updated Answers 10. Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? - Answer ANSWER: Decreasing Term 100. Equity indexed annuities are invested in which of the following: - Answer ANSWER: S&P 500 101. K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary? - Answer ANSWER: $20,000 death benefit 102. Which of the following is TRUE about a qualified retirement that is "top heavy"? - Answer ANSWER: More than 60% of plan assets are in key employee accounts 103. At the age of 45, an individual withdraws $50,000 from his Qualified Profit-Sharing Plan and then deposits this amount into a personal savings account. This action would result in: - Answer ANSWER: Income tax and a 10% penalty assessed upon funds withdrawn from the Qualified Plan 104. Which requirement must be met for an association to be eligible for a group life plan? - Answer ANSWER: Group was formed for a purpose other than acquiring insurance 105. B owns a Whole Life policy with a guaranteed insurability option that allows him to purchase, without evidence of insurability, stated amounts of - Answer ANSWER: additional Whole Life coverage at specified times 106. Which of these arrangements allows one to bypass insurable interest laws? - Answer ANSWER: Investor-Originated Life Insurance 107. Which type of contract liquidates an estate through recurrent payments? - Answer ANSWER: Annuity 108. Traditional individual retirement annuity (IRA) distributions must start by: - Answer ANSWER: April 1st of the year following the year the participant attains age 70 1/2 109. An employee with $25,000 group term life coverage was recently fired. This employee's group coverage may be converted to a: - Answer ANSWER: $25,000 individual whole life policy 11. Which of the following consists of an offer, acceptance, and consideration? - Answer ANSWER: Contract 110. All of the following statements are true regarding a policy's Grace period, EXCEPT: - Answer ANSWER: Past due premiums are waived 111. T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? - Answer ANSWER: Income that cannot be outlived by the owner 112. Which of these terms accurately defines an underwriter's assessment of information on a life insurance application? - Answer ANSWER: Risk classification 113. Which settlement option pays a stated amount to an annuitant, but no residual value to a beneficiary? - Answer ANSWER: Life Income 114. A long-term care rider in a life insurance policy pays a daily benefit in the event of which of the following? - Answer ANSWER: Inability of the insured to perform more than 2 Activities of Daily Living (ADL's) 115. An incomplete life insurance application submitted to an insurer will result in which of these actions? - Answer ANSWER: Application will be returned to the writing agent 116. C is a key employee at ABC Incorporated. If a Key Employee life policy is purchased on her life, which of these statements would be true? - Answer ANSWER: ABC is the policyowner, C is the insured, and ABC is the beneficiary 117. Which of these is NOT a reason for purchasing life insurance on the life of a minor? - Answer ANSWER: If both parents were to die, it would provide death benefits to the child 118. The Commissioner of Insurance is empowered to - Answer ANSWER: enforce state laws relating to insurance 119. Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is - Answer ANSWER: twisting 12. According to North Carolina's rules on disclosure, a life insurance applicant is expected to be provided with - Answer ANSWER: a Buyer's Guide and Policy Summary 120. An insured is past due on his life insurance premium, but is still within the Grace Period. What will the beneficiary receive if the insured dies during this Grace Period? - Answer ANSWER: Full face amount minus any past due premiums 121. Which statement is TRUE regarding a Variable Whole Life policy? - Answer ANSWER: A minimum guaranteed Death benefit is provided 122. Two partners own equal shares in a business worth a total of $1,000,000. If they