NC Life Insurance Study Test Questions
and Answers Graded A+
The Family Plan Insurance Policy usually consists of: ✔✔whole life insurance on the family
head and term insurance on other family members
A Jumping Juveni
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NC Life Insurance Study Test Questions
and Answers Graded A+
The Family Plan Insurance Policy usually consists of: ✔✔whole life insurance on the family
head and term insurance on other family members
A Jumping Juvenile Policy: ✔✔automatically increases the face amount at a given age
Excess interest credited under an index-linked method would pay interest in relation to: ✔✔an
external economic indicator
Under a straight life annuity, an income is payable by the company: ✔✔only so long as the
annuitant is alive
The premium for Interest Sensitive Whole Life is: ✔✔fixed with the policy lapsing if not paid
The purpose of the Life, Accident, and Health Guaranty Association is to: ✔✔provide
guarantees of payment to those individuals whose insurer is insolvent(bankrupt)
Maximum benefit payment from the Life, Accident, and Health Guaranty Association is:
✔✔$300,000
Payment of death proceeds must be paid within a specified number of days after receiving
satisfactory proof of loss. What is this requirement? ✔✔30 days
The grace period can be no fewer than: ✔✔31 days
The policyowner of a Universal Life Policy withdrawals $60,000 of the cash value to purchase a
car. If the cumulative premiums paid to date total $40,000, how much of the cash withdrawal is
taxable as ordinary income? ✔✔$20,000
A Universal Life policy resembles a yearly renewable term policy in that the: ✔✔cost of the
portion of the death benefit for which the company is "at risk" increases annually with the
insured's age
An annuity whose benefits start within 1 year of purchase is called: ✔✔Immediate Annuity
In an annuity contract, the annuitant generally pays in a substantial sum of money and receives a
lifetime income from the company. At any given age, 3 factors which determine how much
income a specific lump sum will pay are: ✔✔the interest earned by the company, the life
expectancy of the annuitant, and the administrative costs
When an annuity is purchased with a single premium or by installment premiums with benefits
from this contract beginning at the end of a given number of years or at an age established in the
contract, this is what type of annuity? ✔✔Deferred annuity
Life annuity benefits are paid: ✔✔as long as the annuitant lives
All of the following are characteristics of an insurable pure risk EXCEPT: ✔✔financial
insignificance
*ex are: measurable loss, less than catastrophic consequences, low probability of occurrence
When Patrick applied for insurance, the agent issued a conditional receipt with the collection of
the initial premium. During the time that the policy is being underwritten, Patrick is considered
to be: ✔✔insured only if the company issues the policy as applied for
A young client can no longer afford to pay premiums due to loss of income. Coverage is still
required, perhaps until past retirement age. An agent would recommend which of the following
procedures to best meet this client's needs? ✔✔Convert the policy through the use of the
"reduced paid-up" nonforfeiture option
The declarations page of a life insurance policy contains all of the following information: ✔✔the
amount of premium, the duration of the coverage, and who is insured
A representation is a statement: ✔✔believed to be accurate
An endowment policy would pay: ✔✔the face amount of the policy to the beneficiary should the
insured die before the maturity date AND the cash value amount to the policyowner if the
insured lives to the maturity date
A feature of term insurance that permits the insured to change the policy to another type of
policy without re-establishing insurability is known as: ✔✔convertible term life
A 36 year old man inherits $5k and wants to buy a single premium policy. Which of the
following single premium policies would buy him the most insurance for his age? ✔✔Whole life
The premium rate for a renewal term of a term policy is: ✔✔the rate of the attained age at
renewal
Which of the following statements describe a characteristic of continuous premium whole life?
✔✔premiums remain level until death or age 100
If a beneficiary has a Life Income with 10 year certain and dies after receiving payments for 1
year, how long will the payments continue? ✔✔9 years
The death benefit of a Variable Life insurance policy will: ✔✔be determined by the separate
account of securities
Every approved life insurance policy carries a prominent "insuring clause" by which the
company issuing the policy agrees to: ✔✔pay the death benefit to the beneficiary AND provide
the policyowner with the other rights and benefits of the policy
In a rear-end load Universal Life policy, how are administrative expenses recovered by the
company? ✔✔They will be deducted from the cash value if the policy is surrendered within a
specified number of years.
Which of the following statements regarding the family plan is correct? ✔✔If additional children
are born or adopted, they are automatically covered
A "bundled" product is a policy where: ✔✔expense, mortality, and interest components of the
premium are not disclosed
The NC Department of Insurance is established by statute to: ✔✔administer and execute the
insurance laws and other statutes of NC relating to insurance
Which of the following actions is considered to be a misrepresentation and is illegal? ✔✔Issuing
a statement not entirely true about the terms of a policy to be issued
If the disability for which the waiver of premium was granted is later cured and the insured
resumes active employment, they will be required to: ✔✔resume paying premiums
A client has left the country and is unavailable for an indefinite period of time. A premium is due
tomorrow. Which rider will assure the longest period of continued coverage on their 11-year old
whole life policy? ✔✔Automatic premium loan
Which method of changing beneficiary designations would require the policy to be submitted to
the insurer? ✔✔Endorsement
Which of the following statements about life insurance exclusion is correct? ✔✔If the insured
dies due to an intentionally self-inflicted injury during the first 2 policy years, the premium will
be refunded.
When the insured died, it was discovered that the insured had misrepresented their age on a life
insurance application. The insurer will: ✔✔adjust the face amount of the policy
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