NC LIFE INSURANCE PRACTICE EXAM QUESTIONS

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NC LIFE INSURANCE PRACTICE EXAM QUESTIONS

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: b)Universal life

As well as being a flexible premium policy, universal life is also an interest-sensitive policy. The insurer credits the cash value in the policy with a current (nonguaranteed) interest rate and backs the cash value with a contract (lower guaranteed) rate of interest.

Answer:

Which of the following Life Insurance policies would be considered interest sensitive?a)Increasing term b)Universal life c)Adjustable life d)Whole life

Question 2: d)Renewable.

There are three basic types of term coverage available, based on how the face amount (death benefit) changes during the policy term: Level, Increasing, and Decreasing. Regardless of the type of term insurance purchased, the premium is often level throughout the term of the policy.Only the amount of the death benefit may fluctuate.

Answer:

All of the following are the types of term insurance depending on how the face amount changes during the policy term EXCEPT a)Decreasing.b)Level.c)Increasing.d)Renewable.

Question 3: d) The amount to be repaid under the contract.

The initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness.

Answer:

The initial amount of credit life insurance may NOT exceed a)An amount set by statute and adjusted regularly for inflation.b)The borrower's monthly income.c)The borrower's annual income.d)The amount to be repaid under the contract.

Question 4: b)Jumping juvenile policy

While many policies provide a level death benefit, Jumping Juvenile policies provide a low face amount in the early years and then increase, usually by 5 times the amount, when the insured reaches an age specified in the policy (usually age 21).

Answer:

If a life insurance policy increases significantly in face amount (death benefit) when the insured reaches a specified age, what type of policy is this?a)Single premium policy b)Jumping juvenile policy c)Limited pay whole life policy d)Modified life insurance policy

Question 5: c)The State.

Each state regulates the business of insurance conducted within that state.

Answer:

The regulation of the insurance industry primarily rests with a)Private insurers.b)The federal government.c)The State.d)The NAIC.

Question 6: b)Annually Renewable Term.

Annually renewable term is the purest form of term insurance. The death benefit remains level, but the premium increases each year with the insured's attained age. In decreasing policies, while the face amount decreases, the premium remains constant throughout the life of the contracts. In level term and increasing term policies, the premium also remains level for the term of the policy. Therefore, in the other types of level policies, the first-year premium would not be different from any other year.

Answer:

All other factors being equal, the least expensive first-year premium payment is found in a)Level Term

b)Annually Renewable Term.c)Increasing Term.d)Decreasing Term.

Question 7: c)Death benefits

Annuities are most commonly used to fund a person's retirement, but they can technically be used to accumulate cash for any reason. Annuities can also be used to liquidate an estate.Annuities do not provide death benefits; those are provided by life insurance.

Answer:

Which of the following are NOT fundable by annuities?a)A person's retirement b)Estate liquidation c)Death benefits d)Cash accumulation for any reason

Question 8: a)10 days

All hearings will be held at a time and place designated in a written notice provided by the Commissioner. The notice must be provided at least 10 days prior to the hearing, and must also state any specific charges.

Answer:

If the Commissioner is scheduling a hearing for a potential violation of the Insurance Code, what is the minimum required notice?a)10 days b)15 days c)30 days d)45 days

Question 9: a) 15

When any company under any insurance policy requires a written proof of loss after notice of the loss has been given by the insured or beneficiary, the company must furnish a blank form within 15 days.

Answer:

Insurance companies are required to provide proof of loss forms to the claimant within how many days after receipt of notice of loss?

• 15

• 30

• 31

• 45

Question 10: a)Seek higher returns.

Equity Indexed Annuities are not securities, but they invest on a relatively aggressive basis to aim for higher returns. Like a fixed annuity the Equity Indexed Annuity has a guaranteed minimum interest rate. The current interest rate that is actually credited is often tied to a familiar index like the Standard and Poor's 500.

Answer:

Equity indexed annuities a)Seek higher returns.b)Are more risky than variable annuities.c)Are security instruments.d)Invest conservatively.Question 11: c)Both the principal and interest will be liquidated over a selected period of time.Under the fixed-period option (also called period certain), a specified period of years is selected, and equal installments are paid to the recipient. Both the principal and interest are liquidated together over the selected period of time.

Answer:

Which of the following best describes fixed-period settlement option?a)The death benefit must be paid out in a lump sum within a certain time period.b)Income is guaranteed for the life of the beneficiary c)Both the principal and interest will be liquidated over a selected period of time.d)Only the principal amount will be paid out within a specified period of time.

Question 12: d). 30 days

Within 30 days of new agent appointments, the insurer must file the names, addresses, and other information with the Commissioner.

Answer:

After an insurer appoints a new agent, the Commissioner must be notified within a). 10 days b). 15 days c). 20 days d). 30 days Question 13: d) They can convert their coverage to permanent life insurance without evidence of insurability.Family members may convert their term coverage to permanent insurance if requested within the time stated in the policy.

Answer:

When the breadwinner that is insured by a Family Policy dies, what rights are provided to other family members that are covered under the policy?