NC LIFE INSURANCE Exam Questions and
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Fraternal Benefit Society
✓ An organization of people who share a month ethnic, religious or vocational affiliation.
They are entities they have no capital stock, have a representative form of government.
They exist not for profit but solely for the benefit of their members and their beneficiaries
and operate on a lodge system.
Fraternal Benefit Societies
✓ Agents of these societies must comply with the SAME general laws governing licensing
that apply to resident and nonresident agents.
Graded Premium Whole Life
✓ Has premiums they start very low then increase annually for a long period and stay level
for the rest of the life of the policy.
Death Benefit Option 1 of a universal life policy
✓ the benefit payable when the insured dies stays level and equal to the initial specified
amount.
Death Benefit Option 2 of a universal life policy
, ✓ s benefit is generally increasing. This benefit equals the policy's specified amount plus
the cash value.
Variable Universal Life insurance
✓ Combines the features of universal life insurane with the ability to allocate premiums to a
seperate account. THIS MEANS the growth of the contract's cash value is based on the
performance of the underlying investment.
Straight Life Income
✓ provides the largest monthly income payment for a given amount o annualized funds.
Also called pure life option, income payments are made for the annuitants lifetime,
regardless of how long that may be.
In regards to the Section 1035 tax code, which exchanges is permitted on a tax-free basis?
✓ 1. life insurance for life insurance
✓ 2. Life insurance for an endowment
✓ 3.Endowment for an Endowment
✓ 4.Life insurance for an Annuity
✓ 5. Annuity for an Annuity
Modified Endowment Contract (MEC)
✓ Tax law considers a single premium life insurance policy to be what?
Anthony becomes an agent for Acme Insurance Company. Acme has not filed the Notice of
appointment with the commissioner. It must do so within how many days?
,|
, ✓ 15 Days
Spendthrift Clause
✓ A clause that prevents the debtors of a beneficiary from collecting the benefits before
he/she receives them.
Annuity death benefits
✓ are not tax deductible or tax free
A couple makes a combined income for $175,000 annually.Will their Individual Retirement
Plan (IRA) be tax deductible?
✓ No. If it is joint an dover $123,000 there is no deduction.
What is the cap on an IRA tax deduction that will provide NO DEDUCTION for a single
person?
✓ $74000 or more.
Prepaid Tuition Plans
✓ College saving plan that allows for the purchase of units or credits at participating
colleges and universities for future tuition. Limited to instate tuition only. NOT SUBJECT
TO FEDERAL TAX. Parents are able to lock in the price of tuition at that time.
risk sharing
Verified Answers Pass Rate 100% Success
Guarantee A+
Fraternal Benefit Society
✓ An organization of people who share a month ethnic, religious or vocational affiliation.
They are entities they have no capital stock, have a representative form of government.
They exist not for profit but solely for the benefit of their members and their beneficiaries
and operate on a lodge system.
Fraternal Benefit Societies
✓ Agents of these societies must comply with the SAME general laws governing licensing
that apply to resident and nonresident agents.
Graded Premium Whole Life
✓ Has premiums they start very low then increase annually for a long period and stay level
for the rest of the life of the policy.
Death Benefit Option 1 of a universal life policy
✓ the benefit payable when the insured dies stays level and equal to the initial specified
amount.
Death Benefit Option 2 of a universal life policy
, ✓ s benefit is generally increasing. This benefit equals the policy's specified amount plus
the cash value.
Variable Universal Life insurance
✓ Combines the features of universal life insurane with the ability to allocate premiums to a
seperate account. THIS MEANS the growth of the contract's cash value is based on the
performance of the underlying investment.
Straight Life Income
✓ provides the largest monthly income payment for a given amount o annualized funds.
Also called pure life option, income payments are made for the annuitants lifetime,
regardless of how long that may be.
In regards to the Section 1035 tax code, which exchanges is permitted on a tax-free basis?
✓ 1. life insurance for life insurance
✓ 2. Life insurance for an endowment
✓ 3.Endowment for an Endowment
✓ 4.Life insurance for an Annuity
✓ 5. Annuity for an Annuity
Modified Endowment Contract (MEC)
✓ Tax law considers a single premium life insurance policy to be what?
Anthony becomes an agent for Acme Insurance Company. Acme has not filed the Notice of
appointment with the commissioner. It must do so within how many days?
,|
, ✓ 15 Days
Spendthrift Clause
✓ A clause that prevents the debtors of a beneficiary from collecting the benefits before
he/she receives them.
Annuity death benefits
✓ are not tax deductible or tax free
A couple makes a combined income for $175,000 annually.Will their Individual Retirement
Plan (IRA) be tax deductible?
✓ No. If it is joint an dover $123,000 there is no deduction.
What is the cap on an IRA tax deduction that will provide NO DEDUCTION for a single
person?
✓ $74000 or more.
Prepaid Tuition Plans
✓ College saving plan that allows for the purchase of units or credits at participating
colleges and universities for future tuition. Limited to instate tuition only. NOT SUBJECT
TO FEDERAL TAX. Parents are able to lock in the price of tuition at that time.
risk sharing
