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NC Life Agent Comprehensive Final
Examination with verified solutions
Which type of life policy contains a monthly mortality charge as well as self- directed investment choices? - correct answer ✔ Variable Universal Life If X wants to buy $50,000 worth of permanent protection on his/her spouse and $25,000 worth of 10-year Term coverage on X under the same policy, the applicant should purchase - correct answer ✔ A Whole Life Policy with Other Insured Rider When an existing life insurance policy is terminated so that a new life insurance policy can be purchased, this transaction is referred to as - correct answer ✔ Replacement The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who - correct answer ✔ is found guilty of misrepresentation or fraud in obtaining the license 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? - correct answer ✔ Universal Life What benefit does the Payor clause on a Juvenile Life policy provide? - correct answer ✔ Premiums are waived if payor becomes disabled
ABC Insurance Company fails to pay death proceeds after satisfactory proof of loss was submitted. ABC must then begin paying interest on the death proceeds after ____ days of receiving proof of loss. - correct answer ✔ 30 An IRA owner can start making withdrawals and NOT be subjected to a tax penalty beginning at what age? - correct answer ✔ 59 1/ Which of these types of life insurance allows the policyowner to have level premiums and to also choose from a selection of investment options? - correct answer ✔ Variable Life If a life insurance company becomes insolvent, the fund that guarantees policyowners payment of death benefits is known as the: - correct answer ✔ Life and Health Insurance Guaranty Association L, aged 50, and L's spouse, 48, have one natural child and one adopted child. They purchase a Family Policy that covers L's spouse to age 65. A death benefit will NOT be paid in which of the following circumstances? - correct answer ✔ L's spouse dies at 66 Which type of life insurance beneficiary requires his/her consent when a change of beneficiary is attempted by the policyowner? - correct answer ✔ Irrevocable Beneficiary Which provision allows the policyowner to change a term life policy to a permanent one without providing proof of good health? - correct answer ✔ Conversion
Which of the following actions is NOT possible with a Universal Life policy? - correct answer ✔ Premiums may be applied as credit against income tax S is covered by a whole life policy. Which insurance product can cover his children? - correct answer ✔ Child term rider G purchased a $50,000 single premium, Straight Life Annuity 2 years ago. G has been receiving monthly payments from the annuity. When G dies, the insurer - correct answer ✔ Does not have to make any further payments The type of annuity that can be purchased with one monetary deposit is called a(n): - correct answer ✔ immediate annuity Which life insurance rider typically appears on a Juvenile life insurance policy? - correct answer ✔ Payor benefit rider P purchases a $50,000 whole life insurance policy in 2005. One of the questions on the application asks if P engages in scuba diving, to which P answers "No". The policy is then issued with no scuba exclusions. In 2010, P takes up scuba diving and dies in a scuba-related accident in 2011. What will the insurer pay to P's beneficiary? - correct answer ✔ $50,000 minus any outstanding policy loans Which of these is NOT relevant when determining the amount of personal life insurance needed? - correct answer ✔ Local unemployment rate The PRIMARY purpose of the life insurance replacement regulation is to protect the - correct answer ✔ interests of policyowners
The purpose of the Insurance Guaranty Fund is to: - correct answer ✔ ensure that claims filed against insolvent insurance companies will be paid An individual working part-time has an annual income of $25,000. If this individual has an IRA, what is the maximum deductible IRA contribution allowable? - correct answer ✔ $25, The purpose of the Rules Governing Life Insurance and Annuity Replacements is to - correct answer ✔ reduce the opportunity for misrepresentation and incomplete disclosure A policyowner would like to change the beneficiary on a Life insurance policy and make the change permanent. Which type of designation would fulfill this need? - correct answer ✔ Revocable Which requirement must be met for an association to be eligible for a group life plan? - correct answer ✔ Group was formed for the purpose of acquiring insurance What type of life insurance incorporates flexible premiums and an adjustable death benefit? - correct answer ✔ Universal Life N is covered by a Term Life policy and does not make the required premium payment which was due August 1. N dies September 15. What action will the insurer take? - correct answer ✔ Claim will be denied
A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies? - correct answer ✔ proceeds will go to the contingent beneficiary According to Florida's rules on disclosure, a life insurance applicant is expected to be provided with - correct answer ✔ a Buyer's Guide and Policy Summary Which of these is considered a statement that is assured to be true in every respect? - correct answer ✔ Warranty M purchases a $70,000 Life Insurance Policy with premium payments of $550 a year for the first 5 years. At the beginning of the sixth year, the premium will increase to $800 per year but will remain level thereafter. The face amount will remain at $70,000 throughout the life of the policy. The type of policy that M has purchased is - correct answer ✔ Modified Premium Life If a blank insurance contract application is signed by an agent, the agent - correct answer ✔ is guilty of misdemeanor An agent who suggests that an insured surrender a life insurance policy in order to purchase a new policy would be subject to which of the following? - correct answer ✔ Replacement Provision An individual life insurance policy issued in North Carolina MUST have a grace period for premium payment of how many days? - correct answer ✔ 31
A ___ includes any corporation, association, partnership, society, order, individual or aggregation of individuals engaging or attempting to engage in the insurance business. - correct answer ✔ Company when an existing life insurance policy is being terminated so that a new life insurance policy can be purchased, this transaction is referred to as - correct answer ✔ Replacement Traditional individual retirement annuity (IRA) distributions must start by - correct answer ✔ April 1st of the year following the year the participant attains age 70 1/ Post-tax dollar contributions are found in - correct answer ✔ Roth IRA investments When does a Guaranteed Insurability Rider allow the insured to buy additional coverage? - correct answer ✔ at future dates specified in the contract with no evidence of insurability required All of these statements about the Waiver of Premium provision are correct EXCEPT: - correct answer ✔ Insured must be eligible for Social Security disability for claim to be accepted In North Carolina, tontine policies are: - correct answer ✔ Prohibited An immediate annuity consists of a - correct answer ✔ single premium
Which of these characteristics is consistent with a Straight Life policy? - correct answer ✔ Premiums are payable for as long as there is insurance coverage in force Whose life is covered on a life insurance policy that contains a payor benefit clause? - correct answer ✔ Child What is being delivered during a policy delivery? - correct answer ✔ Insurance contract to the proposed insured Under the North Carolina insurance code, an insurance company must pay death benefits for suicide if the policy has been in force for a minimum of - correct answer ✔ 2 years An insurance company formed under the laws of Canada would be known in North Carolina as? - correct answer ✔ an alien company S is a life insurance policyowner and enters into a written agreement to receive immediate cash in exchange for the sale and transfer of her life insurance policy. This agreement is referred to as a(n) - correct answer ✔ Viatical Settlement An individual life insurance policy issued in North Carolina MUST have a grace period for premium payment of how many days? - correct answer ✔ 31 Which of the following statements about noncontributory employee group life insurance is FALSE - correct answer ✔ a minimum number of employees is required to participate
Term insurance has which of the following characteristics? - correct answer ✔ expires at the end of the policy period Which of the following factors affects the amount of monthly disability benefits payable under Social Security? - correct answer ✔ the amount of the benefits available from other sources Which type of life policy contains a monthly mortality charge as well as self- directed investment choices? - correct answer ✔ Variable Universal Life Minors in North Carolina age __ and up can enter into life insurance contracts and have all the rights that come with ownership. - correct answer ✔ 15 What percent of personal life insurance premiums is usually deductible for federal income tax purposes? - correct answer ✔ 0% The part of a life insurance policy guaranteed to be true is called a(n) - correct answer ✔ Warranty
