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NC Life Exam Simulation: Multiple Choice Questions and Answers, Exams of Insurance law

North Carolina Central University (NCCU)Insurance law

A series of multiple choice questions and answers related to life insurance in north carolina. It covers various aspects of life insurance policies, including types of policies, premium payments, death benefits, and policy provisions. Useful for individuals studying for the nc life exam or those seeking to gain a basic understanding of life insurance concepts.

Typology: Exams

2024/2025

Available from 02/11/2025

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NC Life Exam Simulation – with verified
answers
Which |!|of |!|the |!|following |!|actions |!|require |!|a |!|policyowner |!|to |!|provide |!|proof |!|of |!|
insurability |!|in |!|an |!|Adjustable |!|Life |!|policy? |!|- |!|correct |!|answer |!|✔ANSWER: |!|
increase |!|face |!|amount
2. |!|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 |!|- |!|correct |!|answer |!|✔ANSWER: |!|suspend, |!|revoke, |!|or |!|refuse |!|
to |!|renew |!|the |!|agent's |!|license
3. |!|A |!|Whole |!|Life |!|Insurance |!|Policy |!|endows |!|when |!|the: |!|- |!|correct |!|answer |!|
✔ANSWER: |!|Cash |!|value |!|equals |!|the |!|death |!|benefit
4. |!|A |!|provision |!|in |!|a |!|life |!|insurance |!|policy |!|that |!|pays |!|the |!|policyowner |!|an |!|
amount |!|that |!|does |!|not |!|surpass |!|the |!|guaranteed |!|cash |!|value |!|is |!|called |!|the: |!|- |!|
correct |!|answer |!|✔ANSWER: |!|Policy |!|Loan |!|provision
5. |!|The |!|Life |!|and |!|Health |!|Insurance |!|Guaranty |!|Association |!|becomes |!|involved |!|in
|!|an |!|insurance |!|company's |!|affairs |!|when |!|the |!|company |!|- |!|correct |!|answer |!|
✔ANSWER: |!|becomes |!|insolvent
6. |!|If |!|a |!|contract |!|of |!|adhesion |!|contains |!|complicated |!|language, |!|to |!|whom |!|would
|!|the |!|interpretation |!|be |!|in |!|favor |!|of? |!|- |!|correct |!|answer |!|✔ANSWER: |!|Insured
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NC Life Exam Simulation – with verified

answers

Which |!|of |!|the |!|following |!|actions |!|require |!|a |!|policyowner |!|to |!|provide |!|proof |!|of |!| insurability |!|in |!|an |!|Adjustable |!|Life |!|policy? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| increase |!|face |!|amount

  1. |!|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 |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|suspend, |!|revoke, |!|or |!|refuse |!| to |!|renew |!|the |!|agent's |!|license
  2. |!|A |!|Whole |!|Life |!|Insurance |!|Policy |!|endows |!|when |!|the: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Cash |!|value |!|equals |!|the |!|death |!|benefit
  3. |!|A |!|provision |!|in |!|a |!|life |!|insurance |!|policy |!|that |!|pays |!|the |!|policyowner |!|an |!| amount |!|that |!|does |!|not |!|surpass |!|the |!|guaranteed |!|cash |!|value |!|is |!|called |!|the: |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|Policy |!|Loan |!|provision
  4. |!|The |!|Life |!|and |!|Health |!|Insurance |!|Guaranty |!|Association |!|becomes |!|involved |!|in |!|an |!|insurance |!|company's |!|affairs |!|when |!|the |!|company |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|becomes |!|insolvent
  5. |!|If |!|a |!|contract |!|of |!|adhesion |!|contains |!|complicated |!|language, |!|to |!|whom |!|would |!|the |!|interpretation |!|be |!|in |!|favor |!|of? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Insured
  1. |!|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 |!| ✔ ANSWER: |!| Adjustable |!|Life
  2. |!|Which |!|parts |!|of |!|a |!|life |!|insurance |!|policy |!|are |!|guaranteed |!|to |!|be |!|true? |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|Warranty
  3. |!|Q |!|applied |!|for |!|life |!|insurance |!|and |!|submitted |!|the |!|initial |!|premium |!|on |!| January |!|1. |!|The |!|policy |!|was |!|issued |!|February |!|1, |!|but |!|it |!|was |!|not |!|delivered |!|by |!| the |!|agent |!|until |!|February |!|7. |!|Q |!|is |!|dissatisfied |!|and |!|returns |!|the |!|policy |!|February |!|13. |!|How |!|will |!|the |!|insurer |!|handle |!|this |!|situation? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Policy |!|was |!|returned |!|within |!|the |!|free-look |!|period, |!|premium |!|will |!| be |!|fully |!|refunded
  4. |!|Which |!|of |!|these |!|types |!|of |!|policies |!|may |!|NOT |!|have |!|the |!|Automatic |!| Premium |!|Loan |!|provision |!|attached |!|to |!|it? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| Decreasing |!|Term
  5. |!|Which |!|of |!|the |!|following |!|consists |!|of |!|an |!|offer, |!|acceptance, |!|and |!| consideration? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Contract
  6. |!|According |!|to |!|North |!|Carolina's |!|rules |!|on |!|disclosure, |!|a |!|life |!|insurance |!| applicant |!|is |!|expected |!|to |!|be |!|provided |!|with |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|a |!| Buyer's |!|Guide |!|and |!|Policy |!|Summary

|!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Life |!|and |!|Health |!|Insurance |!|Guaranty |!| Association

  1. |!|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: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|the |!|cost
  2. |!|Which |!|of |!|these |!|is |!|NOT |!|considered |!|to |!|be |!|an |!|element |!|of |!|an |!|insurance |!| contract? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|negotiating
  3. |!|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? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|20-pay |!|Life
  4. |!|A |!|trustee-to-trustee |!|transfer |!|of |!|rollover |!|funds |!|in |!|a |!|qualified |!|plan |!|allows |!|a |!|participant |!|to |!|avoid: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|mandatory |!|income |!|tax |!|withholding |!|on |!|the |!|transfer |!|amount
  5. |!|A |!|policyowner |!|is |!|allowed |!|to |!|pay |!|premiums |!|more |!|than |!|once |!|a |!|year |!| under |!|which |!|provision? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Mode |!|of |!|Premium
  6. |!|Which |!|type |!|of |!|life |!|policy |!|contains |!|a |!|monthly |!|mortality |!|charge |!|as |!|well |!| as |!|self-directed |!|investment |!|choices? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Variable |!| Universal |!|Life
  7. |!|Which |!|policy |!|requires |!|an |!|agent |!|to |!|register |!|with |!|the |!|National |!| Association |!|of |!|Securities |!|Dealers |!|(NASD) |!|before |!|selling? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Variable |!|Life
  1. |!|What |!|does |!|a |!|401(k) |!|plan |!|generally |!|provide |!|its |!|participants? |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|Salary-deferral |!|contributions
  2. |!|Which |!|of |!|the |!|following |!|statements |!|regarding |!|a |!|Tax |!|Sheltered |!|Annuity |!| (TSA) |!|is |!|INCORRECT? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|The |!|income |!|from |!|the |!| TSA |!|is |!|received |!|income |!|tax-free
  3. |!|An |!|insurance |!|company |!|MUST |!|clearly |!|specify |!|questions |!|designed |!|to |!| obtain |!|information |!|solely |!|for |!|marketing |!|research |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|in |!|any |!|insurance |!|transaction
  4. |!|Proceeds |!|of |!|the |!|viatical |!|settlement |!|contract |!|could |!|be |!|subject |!|to |!|the |!| claims |!|of |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Creditors
  5. |!|M |!|had |!|an |!|annual |!|life |!|insurance |!|premium |!|payment |!|due |!|January |!|1. |!|She |!| died |!|January |!| 10 |!|without |!|making |!|the |!|premium |!|payment. |!|What |!|action |!|will |!| the |!|insurer |!|take? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Pay |!|face |!|amount |!|minus |!|the |!| past |!|due |!|premium
  6. |!|Which |!|of |!|these |!|statements |!|concerning |!|an |!|Individual |!|Straight |!|Life |!| annuity |!|is |!|accurate? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Payments |!|are |!|made |!|to |!|an |!|annuitant |!|for |!|life
  7. |!|What |!|type |!|of |!|life |!|policy |!|covers |!|two |!|people |!|and |!|pays |!|upon |!|the |!|death |!| of |!|the |!|last |!|insured? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Survivorship

|!|the |!|policy |!|for |!|more |!|than |!|its |!|cash |!|value? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Life |!| settlement |!|contract

  1. |!|When |!|a |!|misrepresentation |!|on |!|a |!|life |!|insurance |!|policy |!|application |!|is |!| discovered, |!|what |!|action |!|may |!|an |!|insurance |!|company |!|take? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Void |!|the |!|policy |!|only |!|if |!|it |!|is |!|discovered |!|during |!|the |!|Contestable |!| period |!|and |!|proven |!|to |!|be |!|material
  2. |!|S |!|is |!|close |!|to |!|retiring |!|and |!|would |!|like |!|to |!|purchase |!|a |!|policy |!|that |!|will |!|yield |!|greater |!|gains |!|than |!|bonds, |!|but |!|will |!|still |!|protect |!|the |!|principal |!|with |!|a |!| minimum |!|level |!|or |!|risk. |!|Which |!|product |!|would |!|S |!|be |!|advised |!|to |!|purchase? |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|Equity |!|index |!|insurance
  3. |!|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 |!| ✔ ANSWER: |!|Universal |!|Life
  4. |!|D |!|was |!|actively |!|serving |!|in |!|the |!|Marines |!|when |!|he |!|was |!|killed |!|in |!|an |!| automobile |!|accident |!|while |!|on |!|leave. |!|His |!|$100,000 |!|Whole |!|life |!|policy |!| contains |!|a |!|War |!|Exclusion |!|clause. |!|How |!|much |!|will |!|D's |!|beneficiary's |!|receive? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|The |!|full |!|face |!|amount
  5. |!|J |!|chooses |!|a |!|monthly |!|premium |!|payment |!|mode |!|on |!|his |!|Whole |!|Life |!| insurance |!|policy. |!|Which |!|of |!|these |!|statements |!|is |!|correct? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|The |!|gross |!|premium |!|is |!|higher |!|on |!|a |!|monthly |!|payment |!|mode |!|as |!| compared |!|to |!|being |!|paid |!|annually
  1. |!|When |!|funds |!|are |!|shifted |!|straight |!|from |!|one |!|IRA |!|to |!|another |!|IRA, |!|what |!| percentage |!|of |!|the |!|tax |!|is |!|withheld? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|None
  2. |!|Which |!|of |!|the |!|following |!|consists |!|of |!|an |!|offer, |!|acceptance, |!|and |!| consideration? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Contract
  3. |!|What |!|benefit |!|does |!|the |!|Payor |!|clause |!|on |!|a |!|Juvenile |!|Life |!|policy |!|provide? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Premiums |!|are |!|waived |!|if |!|payor |!|becomes |!| disabled
  4. |!|J |!|would |!|like |!|to |!|maintain |!|the |!|right |!|to |!|change |!|beneficiaries. |!|Which |!| beneficiary |!|designation |!|should |!|be |!|used? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| Revocable
  5. |!|Lapsed |!|individual |!|life |!|insurance |!|may |!|be |!|reinstated |!|at |!|any |!|time |!|within |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| 5 |!|years
  6. |!|What |!|is |!|considered |!|a |!|valid |!|reason |!|for |!|small |!|businesses |!|to |!|insure |!|the |!| lives |!|of |!|its |!|major |!|shareholders? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Fund |!|a |!|buy- sell |!|agreement
  7. |!|An |!|insurance |!|company |!|may |!|NOT |!|reject |!|a |!|prospective |!|insured's |!|life |!| application |!|on |!|the |!|basis |!|of |!|which |!|of |!|the |!|following |!|factors? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Gender
  8. |!|Which |!|statement |!|regarding |!|third-party |!|ownership |!|of |!|a |!|life |!|insurance |!| policy |!|is |!|true? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|It |!|is |!|used |!|extensively |!|in |!|estate- planning |!|as |!|well |!|as |!|business |!|circumstances
  1. |!|Boycott, |!|coercion, |!|and |!|intimidation |!|that |!|result |!|in |!|the |!|unreasonable |!| restraint |!|of |!|trade |!|are |!|prohibited |!|under |!|the |!|North |!|Carolina |!|insurance |!|laws |!| covering |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|unfair |!|trade |!|practices
  2. |!|What |!|type |!|of |!|group |!|insurance |!|plan |!|involves |!|employees |!|sharing |!|the |!| cost? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|contributory |!|plan
  3. |!|In |!|a |!|life |!|insurance |!|policy, |!|which |!|feature |!|states |!|that |!|the |!|policy |!|will |!|not |!| cover |!|certain |!|risks? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Exclusion
  4. |!|A |!|person |!|who |!|is |!|insured |!|within |!|a |!|group |!|contract |!|will |!|be |!|given |!|a: |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|certificate
  5. |!|N |!|is |!|a |!|40-year |!|old |!|applicant |!|who |!|would |!|like |!|to |!|retire |!|at |!|age |!|70. |!|He |!|is |!| looking |!|to |!|buy |!|a |!|life |!|insurance |!|policy |!|with |!|level |!|premiums, |!|permanent |!| protection, |!|and |!|be |!|paid-up |!|at |!|retirement. |!|Which |!|of |!|these |!|should |!|N |!| purchase? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| 30 |!|Pay |!|Life
  6. |!|What |!|kind |!|of |!|life |!|insurance |!|product |!|covers |!|children |!|under |!|their |!| parent's |!|policy? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Term |!|rider
  7. |!|Which |!|of |!|the |!|following |!|correctly |!|explains |!|the |!|actions |!|an |!|agent |!|should |!| take |!|if |!|a |!|customer |!|wants |!|to |!|apply |!|for |!|an |!|insurance |!|policy? |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|Complete |!|the |!|application |!|and |!|review |!|the |!|information |!| with |!|the |!|customer |!|prior |!|to |!|obtaining |!|the |!|customer's |!|signature, |!|then |!|send |!| the |!|application |!|off |!|to |!|the |!|insurance |!|company
  1. |!|A |!|statement |!|made |!|by |!|an |!|insured |!|in |!|an |!|insurance |!|application |!|that |!|must |!|be |!|true |!|to |!|the |!|best |!|of |!|one's |!|knowledge |!|and |!|which |!|becomes |!|a |!|part |!|of |!|the |!|contract |!|is |!|known |!|as: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|a |!|representation
  2. |!|Every |!|insurance |!|agent/broker |!|MUST |!|maintain |!|all |!|records, |!|books, |!|and |!| documents |!|for |!|insurance |!|transactions |!|for |!|a |!|period |!|of |!|not |!|less |!|than |!|- |!| correct |!|answer |!| ✔ ANSWER: |!| 5 |!|years
  3. |!|Which |!|of |!|these |!|actions |!|should |!|a |!|producer |!|take |!|when |!|submitting |!|an |!| insurance |!|application |!|to |!|an |!|insurer? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Inform |!| insurer |!|of |!|relevant |!|information |!|not |!|included |!|on |!|the |!|application
  4. |!|T |!|has |!|an |!|annuity |!|that |!|guarantees |!|an |!|income |!|payment |!|for |!|the |!|rest |!|of |!| his |!|life. |!|The |!|contract |!|also |!|guarantees |!|that |!|if |!|T |!|dies |!|before |!|receiving |!| payments |!|for |!| 20 |!|years, |!|the |!|remaining |!|payments |!|will |!|be |!|paid |!|to |!|his |!|son |!|for |!|the |!|balance |!|of |!|the |!| 20 |!|years. |!|What |!|type |!|of |!|annuity |!|is |!|this? |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|Life |!|Annuity |!|with |!|Period |!|Certain
  5. |!|Statements |!|made |!|on |!|an |!|insurance |!|application |!|that |!|are |!|believed |!|to |!|be |!| true |!|to |!|the |!|best |!|of |!|the |!|applicant's |!|knowledge |!|are |!|called: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|representations
  6. |!|A |!|temporary |!|license |!|may |!|be |!|issued |!|for |!|a |!|MAXIMUM |!|period |!|of |!|how |!| many |!|days? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| 180
  7. |!|The |!|funds |!|used |!|by |!|the |!|Life |!|and |!|Health |!|Insurance |!|Guaranty |!|Association |!| to |!|carry |!|out |!|its |!|purpose |!|are |!|obtained |!|from |!|the |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|member |!|companies
  1. |!|Under |!|a |!|Renewable |!|Term |!|policy, |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|the |!| renewal |!|premium |!|is |!|calculated |!|on |!|the |!|basis |!|of |!|the |!|insured's |!|attained |!|age
  2. |!|How |!|long |!|does |!|the |!|coverage |!|normally |!|remain |!|on |!|a |!|limited-pay |!|life |!| policy? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|age |!| 100
  3. |!|Which |!|statement |!|about |!|a |!|whole |!|life |!|policy |!|is |!|correct? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Cash |!|value |!|may |!|be |!|borrowed |!|against
  4. |!|M |!|has |!|an |!|insurance |!|policy |!|that |!|also |!|has |!|an |!|outstanding |!|policy |!|loan |!|at |!| the |!|time |!|of |!|M's |!|death. |!|The |!|insurer |!|will |!|deduct |!|the |!|outstanding |!|loan |!| balance |!|from |!|the: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|policy |!|proceeds
  5. |!|The |!|amount |!|of |!|coverage |!|on |!|a |!|group |!|credit |!|life |!|policy |!|is |!|limited |!|to: |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|the |!|insured's |!|total |!|loan |!|value
  6. |!|What |!|type |!|of |!|life |!|insurance |!|are |!|credit |!|policies |!|issued |!|as? |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|Term
  7. |!|T |!|would |!|like |!|to |!|be |!|assured |!|$10,000 |!|is |!|available |!|in |!| 10 |!|years |!|to |!|replace |!| a |!|roof |!|on |!|his |!|house. |!|What |!|kind |!|of |!|$10,000 |!|policy |!|should |!|T |!|purchase? |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|Ten-Year |!|Endowment
  8. |!|In |!|a |!|Life |!|insurance |!|contract, |!|an |!|insurance |!|company's |!|promise |!|to |!|pay |!| stated |!|benefits |!|is |!|called |!|the: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Insuring |!|clause
  1. |!|G |!|purchased |!|a |!|Family |!|Income |!|policy |!|at |!|age |!|40. |!|The |!|policy |!|has |!|a |!|20- year |!|rider |!|period. |!|If |!|G |!|were |!|to |!|die |!|at |!|age |!|50, |!|how |!|long |!|would |!|G's |!|family |!| receive |!|an |!|income? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| 10 |!|years
  2. |!|Insurance |!|policies |!|are |!|considered |!|aleatory |!|contracts |!|because |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|performance |!|is |!|conditioned |!|upon |!|a |!|future |!|occurrence
  3. |!|A |!|variable |!|insurance |!|policy: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|does |!|not |!| guarantee |!|a |!|return |!|on |!|its |!|investment |!|accounts
  4. |!|Which |!|statement |!|regarding |!|a |!|Key |!|Employee |!|Life |!|policy |!|is |!|NOT |!|true? |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|The |!|beneficiary |!|is |!|named |!|by |!|the |!|key |!|employee
  5. |!|From |!|what |!|authority |!|derives |!|the |!|requirement |!|that |!|an |!|insurance |!| application |!|contains |!|a |!|disclosure |!|stating |!|that |!|an |!|investigative |!|consumer |!| report |!|may |!|be |!|obtained |!|on |!|an |!|applicant? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Fair |!| Credit |!|Reporting |!|Act
  6. |!|The |!|Universal |!|Life |!|Policy |!|is |!|called |!|an |!|unbundled |!|Life |!|Policy |!|because |!|the |!|policyholder |!|can |!|see |!|the |!|expense |!|charges, |!|the |!|interest |!|earned, |!|and |!|the: |!|- |!| correct |!|answer |!| ✔ `ANSWER: |!|Cost |!|of |!|insurance
  7. |!|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 |!| ✔ ANSWER: |!|Claim |!|will |!|be |!| denied
  8. |!|Premature |!|IRA |!|distributions |!|are |!|assessed |!|a |!|penalty |!|tax |!|of: |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|10%

of |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|additional |!|Whole |!|Life |!|coverage |!|at |!|specified |!| times

  1. |!|Which |!|of |!|these |!|arrangements |!|allows |!|one |!|to |!|bypass |!|insurable |!|interest |!| laws? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Investor-Originated |!|Life |!|Insurance
  2. |!|Which |!|type |!|of |!|contract |!|liquidates |!|an |!|estate |!|through |!|recurrent |!| payments? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Annuity
  3. |!|Traditional |!|individual |!|retirement |!|annuity |!|(IRA) |!|distributions |!|must |!|start |!| by: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|April |!|1st |!|of |!|the |!|year |!|following |!|the |!|year |!| the |!|participant |!|attains |!|age |!| 70 |!|1/
  4. |!|An |!|employee |!|with |!|$25,000 |!|group |!|term |!|life |!|coverage |!|was |!|recently |!| fired. |!|This |!|employee's |!|group |!|coverage |!|may |!|be |!|converted |!|to |!|a: |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|$25,000 |!|individual |!|whole |!|life |!|policy
  5. |!|All |!|of |!|the |!|following |!|statements |!|are |!|true |!|regarding |!|a |!|policy's |!|Grace |!| period, |!|EXCEPT: |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Past |!|due |!|premiums |!|are |!| waived
  6. |!|T, |!|age |!|70, |!|withdraws |!|cash |!|from |!|a |!|profit-sharing |!|plan |!|and |!|purchases |!|a |!| Straight |!|Life |!|Annuity. |!|What |!|will |!|this |!|transaction |!|provide? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Income |!|that |!|cannot |!|be |!|outlived |!|by |!|the |!|owner
  7. |!|Which |!|of |!|these |!|terms |!|accurately |!|defines |!|an |!|underwriter's |!|assessment |!| of |!|information |!|on |!|a |!|life |!|insurance |!|application? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Risk |!|classification
  1. |!|Which |!|settlement |!|option |!|pays |!|a |!|stated |!|amount |!|to |!|an |!|annuitant, |!|but |!| no |!|residual |!|value |!|to |!|a |!|beneficiary? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Life |!| Income
  2. |!|A |!|long-term |!|care |!|rider |!|in |!|a |!|life |!|insurance |!|policy |!|pays |!|a |!|daily |!|benefit |!| in |!|the |!|event |!|of |!|which |!|of |!|the |!|following? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| Inability |!|of |!|the |!|insured |!|to |!|perform |!|more |!|than |!| 2 |!|Activities |!|of |!|Daily |!|Living |!| (ADL's)
  3. |!|An |!|incomplete |!|life |!|insurance |!|application |!|submitted |!|to |!|an |!|insurer |!|will |!| result |!|in |!|which |!|of |!|these |!|actions? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Application |!| will |!|be |!|returned |!|to |!|the |!|writing |!|agent
  4. |!|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? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|ABC |!|is |!|the |!|policyowner, |!|C |!|is |!|the |!|insured, |!|and |!|ABC |!|is |!|the |!|beneficiary
  5. |!|Which |!|of |!|these |!|is |!|NOT |!|a |!|reason |!|for |!|purchasing |!|life |!|insurance |!|on |!|the |!| life |!|of |!|a |!|minor? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|If |!|both |!|parents |!|were |!|to |!|die, |!| it |!|would |!|provide |!|death |!|benefits |!|to |!|the |!|child
  6. |!|The |!|Commissioner |!|of |!|Insurance |!|is |!|empowered |!|to |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|enforce |!|state |!|laws |!|relating |!|to |!|insurance
  7. |!|Inducing |!|or |!|attempting |!|to |!|induce |!|any |!|insured |!|person |!|through |!| misrepresentation |!|to |!|lapse, |!|forfeit, |!|or |!|surrender |!|insurance |!|is |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|twisting
  1. |!|The |!|type |!|of |!|annuity |!|that |!|can |!|be |!|purchased |!|with |!|one |!|monetary |!| deposit |!|is |!|called |!|a(n): |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Immediate |!|annuity
  2. |!|Which |!|of |!|these |!|statements |!|is |!|INCORRECT |!|regarding |!|the |!|federal |!|income |!|tax |!|treatment |!|of |!|life |!|insurance? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Entire |!|cash |!| surrender |!|value |!|is |!|taxable
  3. |!|Credit |!|life |!|insurance |!|is |!|typically |!|issued |!|with |!|which |!|of |!|the |!|following |!| types |!|of |!|coverage? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Decreasing |!|Term
  4. |!|An |!|agent |!|who |!|sells |!|an |!|individual |!|life |!|insurance |!|policy |!|in |!|North |!| Carolina |!|MUST |!|deliver |!|to |!|the |!|policyowner |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|A |!| Policy |!|Summary |!|and |!|Buyer's |!|Guide
  5. |!|Which |!|tax |!|would |!|an |!|IRA |!|participant |!|be |!|subjected |!|to |!|on |!|distributions |!| received |!|prior |!|to |!|age |!| 59 |!|1/2? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Ordinary |!|income |!|tax |!|and |!|a |!|10% |!|tax |!|penalty |!|for |!|early |!|withdrawal
  6. |!|Which |!|type |!|of |!|life |!|policy |!|contains |!|a |!|monthly |!|mortality |!|charge |!|as |!|well |!| as |!|self-directed |!|investment |!|choices? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Variable |!| Universal |!|Life
  7. |!|Which |!|of |!|the |!|following |!|types |!|of |!|policies |!|pays |!|a |!|benefit |!|if |!|the |!|insured |!| goes |!|blind? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|AD&D
  1. |!|When |!|is |!|the |!|face |!|amount |!|of |!|a |!|Whole |!|Life |!|policy |!|paid? |!|- |!|correct |!| answer |!| ✔ ANSWER: |!|When |!|the |!|insured |!|dies |!|or |!|at |!|the |!|policy's |!|maturity |!|date, |!|whichever |!|happens |!|first
  2. |!|An |!|agent |!|that |!|has |!|been |!|or |!|is |!|engaged |!|in |!|conduct |!|that |!|violates |!|the |!| Insurance |!|Information |!|and |!|Privacy |!|Protection |!|Act |!|shall |!|be |!|issued |!|and |!| served |!|a |!|statement |!|of |!|charges |!|and |!|notice |!|of |!|hearing |!|by |!|the |!|Commissioner |!| of |!|Insurance. |!|The |!|date |!|of |!|such |!|hearing |!|shall |!|be |!|AT |!|LEAST |!|how |!|many |!|days |!| after |!|service |!|of |!|charges? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!| 10
  3. |!|Which |!|of |!|the |!|following |!|is |!|a |!|characteristic |!|of |!|a |!|variable |!|annuity? |!|- |!| correct |!|answer |!| ✔ ANSWER: |!|Underlying |!|equity |!|investments
  4. |!|Which |!|of |!|these |!|characteristics |!|is |!|consistent |!|with |!|a |!|Straight |!|Life |!|policy? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Premiums |!|are |!|payable |!|for |!|as |!|long |!|as |!|there |!|is |!|insurance |!|coverage |!|in |!|force
  5. |!|Which |!|provision |!|is |!|NOT |!|a |!|requirement |!|in |!|a |!|group |!|life |!|policy? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Accidental
  6. |!|T |!|applies |!|for |!|a |!|life |!|insurance |!|policy |!|and |!|is |!|told |!|by |!|the |!|producer |!|that |!| the |!|insurer |!|is |!|bound |!|to |!|the |!|coverage |!|as |!|of |!|the |!|date |!|of |!|the |!|application |!|or |!| medical |!|examination, |!|whichever |!|is |!|later. |!|Assuming |!|that |!|T |!|is |!|an |!|acceptable |!| risk, |!|what |!|item |!|is |!|given |!|to |!|T? |!|- |!|correct |!|answer |!| ✔ ANSWER: |!|Conditional |!| receipt
  7. |!|In |!|order |!|for |!|coverage |!|on |!|a |!|non-medical |!|insurance |!|application |!|to |!|take |!| effect |!|the |!|same |!|day, |!|the |!|producer |!|must |!|collect |!|a |!|signed |!|application |!|and |!|- |!| correct |!|answer |!| ✔ ANSWER:the |!|initial |!|premium