Final Exam - North Carolina Life and Health
Questions with Detailed Verified Answers
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect EXCEPT Ans: free-look
period has expired
Additional coverage can be added to a Whole Life policy by adding a(n) Ans:
decreasing term rider
All of the following actions are considered rebating EXCEPT Ans: sharing
commissions with other licensed and appointed agents
One of the stated purposes of the Life and Health Insurance Guaranty Association is
to Ans: assist in the prevention of insurer insolvencies
Which of the following statements is CORRECT about the period in which a Term
Policy can be converted? Ans: It varies according to the contracts
Insurance agents MUST obtain a license from North Carolina's Ans: Commissioner of
Insurance
An accident policy will most likely pay a benefit for a(n) Ans: off-the-job accident
K becomes ill after traveling overseas and is unable to work for 3 months. What kind
of policy would cover her loss of income? Ans: Disability Income
K has a health policy that must be renewed by the insurer and the premiums can only
be increased if applied to the entire class of insureds. This type of policy is considered
Ans: guaranteed renewable
M's insurance company denied a reinstatement application for her lapsed health
insurance policy. The company did not notify M of this denial. How many days from
,the reinstatement application date does the insurance company have to notify M of the
denial before the policy will be automatically placed back in force? Ans: 45 days
B is a teacher who was injured in a car accident and cannot work. She is now receiving
monthly benefits as a result of this accident. Which type of policy does B have? Ans:
Disability Income
Which of the following services is NOT covered under a hospitalization expense
policy? Ans: surgeon's fees
Statements made on an insurance application that are believed to be true to the best
of the applicant's knowledge are called Ans: representations
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect EXCEPT Ans: free-look
period has expired
Rick recently died and left behind an individual IRA account in his name. His widow
was forwarded the balance of the IRA. The widow qualifies for the Ans: marital
deduction
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? Ans: 20-
pay Life
The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is Ans: cost
The Consideration clause of an insurance contract includes Ans: the schedule and
amount of premium payments
© Get it right 2025 Getaway - Stuvia US All rights reserved
, T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life
Annuity. What will this transaction provide? Ans: Income that cannot be outlived by
the owner
If an individual has an Accidental Death and Dismemberment policy and dies, an
autopsy can be performed in all these situations EXCEPT Ans: When the state
prohibits this by law
The type of annuity that can be purchased with one monetary deposit is called a(n)
Ans: Immediate annuity
Which of the following statements is CORRECT about accelerated death benefits?
Ans: Must have a terminal illness to qualify
Which rider provides coverage for a child under a parent's life insurance policy? Ans:
Child term rider
Which of the following BEST describes how pre-admission certifications are used?
Ans: Used to prevent nonessential medical costs
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable beneficiary. What action will the insurance company take if T requests a
change of beneficiary? Ans: Request of the change will be refused
If the Commissioner of insurance finds that a licensed person has used fraudulent,
coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or
financially irresponsible, the law allows the Commissioner to Ans: suspend, revoke, or
refuse to renew the agent's license
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? Ans: $50,000
© Get it right 2025 Getaway - Stuvia US All rights reserved
Questions with Detailed Verified Answers
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect EXCEPT Ans: free-look
period has expired
Additional coverage can be added to a Whole Life policy by adding a(n) Ans:
decreasing term rider
All of the following actions are considered rebating EXCEPT Ans: sharing
commissions with other licensed and appointed agents
One of the stated purposes of the Life and Health Insurance Guaranty Association is
to Ans: assist in the prevention of insurer insolvencies
Which of the following statements is CORRECT about the period in which a Term
Policy can be converted? Ans: It varies according to the contracts
Insurance agents MUST obtain a license from North Carolina's Ans: Commissioner of
Insurance
An accident policy will most likely pay a benefit for a(n) Ans: off-the-job accident
K becomes ill after traveling overseas and is unable to work for 3 months. What kind
of policy would cover her loss of income? Ans: Disability Income
K has a health policy that must be renewed by the insurer and the premiums can only
be increased if applied to the entire class of insureds. This type of policy is considered
Ans: guaranteed renewable
M's insurance company denied a reinstatement application for her lapsed health
insurance policy. The company did not notify M of this denial. How many days from
,the reinstatement application date does the insurance company have to notify M of the
denial before the policy will be automatically placed back in force? Ans: 45 days
B is a teacher who was injured in a car accident and cannot work. She is now receiving
monthly benefits as a result of this accident. Which type of policy does B have? Ans:
Disability Income
Which of the following services is NOT covered under a hospitalization expense
policy? Ans: surgeon's fees
Statements made on an insurance application that are believed to be true to the best
of the applicant's knowledge are called Ans: representations
M completes an application for life insurance but does not pay the initial premium. All
of these actions must occur before M's policy goes into effect EXCEPT Ans: free-look
period has expired
Rick recently died and left behind an individual IRA account in his name. His widow
was forwarded the balance of the IRA. The widow qualifies for the Ans: marital
deduction
J is 35-years old and looking to purchase a whole life insurance policy. Which of the
following types of policies will provide the most rapid growth of cash value? Ans: 20-
pay Life
The most important factor to consider when determining whether to convert term
insurance at the insured's attained age or the insured's original age is Ans: cost
The Consideration clause of an insurance contract includes Ans: the schedule and
amount of premium payments
© Get it right 2025 Getaway - Stuvia US All rights reserved
, T, age 70, withdraws cash from a profit-sharing plan and purchases a Straight Life
Annuity. What will this transaction provide? Ans: Income that cannot be outlived by
the owner
If an individual has an Accidental Death and Dismemberment policy and dies, an
autopsy can be performed in all these situations EXCEPT Ans: When the state
prohibits this by law
The type of annuity that can be purchased with one monetary deposit is called a(n)
Ans: Immediate annuity
Which of the following statements is CORRECT about accelerated death benefits?
Ans: Must have a terminal illness to qualify
Which rider provides coverage for a child under a parent's life insurance policy? Ans:
Child term rider
Which of the following BEST describes how pre-admission certifications are used?
Ans: Used to prevent nonessential medical costs
T is covered by an Accidental Death and Dismemberment (AD&D) policy that has an
irrevocable beneficiary. What action will the insurance company take if T requests a
change of beneficiary? Ans: Request of the change will be refused
If the Commissioner of insurance finds that a licensed person has used fraudulent,
coercive, or dishonest practices or has proved to be incompetent, untrustworthy, or
financially irresponsible, the law allows the Commissioner to Ans: suspend, revoke, or
refuse to renew the agent's license
T took out a $50,000 life insurance policy with an Accidental Death and
Dismemberment rider. Five years later, T commits suicide. How much will the insurer
pay? Ans: $50,000
© Get it right 2025 Getaway - Stuvia US All rights reserved
