Download NC Life Insurance Exam Prep Questions and Answers (Latest Update 2024) Verified Answers and more Exams Nursing in PDF only on Docsity!
(Latest Update 2024) Verified Answers
An agent who sells an individual life insurance policy in NC MUST deliver to the policyowner - Correct Answer ✅A policy summary and buyer's guide All of the following actions are considered rebating EXCEPT - Correct Answer ✅Sharing commissions with other licensed and appointed agents What benefit does the Payor Clause on a Juvenile Life Policy provide? - Correct Answer ✅Premiums are waived if payor becomes disabled An agent who signs a blank contract application or policy of insurance - Correct Answer ✅Is guilty of a misdemeanor A person is required to be AT LEAST how old before he or she is licensed as an agent in NC? - Correct Answer ✅ 18 In a life insurance policy, which feature states that the policy will not cover certain risks? - Correct Answer ✅Exclusion
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Whole Life insurance are contractually guaranteed to provide each of the following EXCEPT? - Correct Answer ✅Partial withdrawal features beyond a surrender charge period A term life insurance policy matures - Correct Answer ✅Upon the insured's death during the term of the policy Which of these provisions require proof of insurability after a policy has lapsed? - Correct Answer ✅Reinstatement How does a typical Variable Life Policy Investment account grow? - Correct Answer ✅Through mutual funds, stocks, and bonds Circulation of any oral or written statement or any pamphlet, circular, article or literature that is false or maliciously critical of or derogatory to the financial condition of an insurer is known as - Correct Answer ✅Defamation All of the following are considered characteristics describing the nature of an insurance contract EXCEPT - Correct Answer ✅Bilateral
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A provision in a life insurance policy that pays the policy owner an amount that doesn't surpass the guaranteed cash value is called the - Correct Answer ✅Policy Loan Provision 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 T, age 70, withdrawals cash from a profit-sharing plan and purchases a Straight Life Annuity. What will this transaction provide? - Correct Answer ✅Income that cannot be outlived by the owner A level premium indicates - Correct Answer ✅The premium is fixed for the entire duration of the contract K has a life insurance policy where her husband is beneficiary and her daughter is contingent beneficiary. Under the Common Disaster clause, if K and her husband are both killed in an automobile accident, where would the death proceeds be directed? - Correct Answer ✅Daughter
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Which of the following statements is correct about the period in which a Term Policy can be converted? - Correct Answer ✅It can be changed by the insured What group term life feature permits an individual to depart from the group and continue to be converted without providing evidence of insurability? - Correct Answer ✅Conversion An insured covered by life insurance has just died. What will happen if the primary beneficiary had already died before the insured and contingent beneficiary? - Correct Answer ✅Proceed will go to the contingent beneficiary S buys a $10,000 Whole Life Policy in 2003 and pays an annual premium of $100. S dies 5 years later in 2008 and the insurer pays the beneficiary $10,500. What kind of rider did S include on the policy? - Correct Answer ✅Return of Premium rider One of the stated purposes of the Life and Health Insurance Guaranty Association is to - Correct Answer ✅Assist in the prevention of insurer insolvencies
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K works for XYZ clothing store from September through December each year. K works 4 hours a week for this period of time. The employer's Group Policy would consider K - Correct Answer ✅Not eligible for the insurance because as a seasonal employee K doesn't meet the definition of "employee" under NC law A written agreement to provide a Life Insurance Policyholder immediate cash in exchange for the sale and transfer of a Life Insurance Policy is a - Correct Answer ✅Viatical Settlement When an employee is terminated, which statement about a group term life conversion is true? - Correct Answer ✅Policy proceeds will be paid if the employee dies during the conversion period 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
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What kind of life insurance policy pays a specified monthly income to a beneficiary for 30 years and then pays a lump sum benefit at the end of that 30 years? - Correct Answer ✅Family Maintenance Policy The fund that assures policyholders payment of death benefits on Life Policies, if the company is insolvent at the same time of the claim, is called the - Correct Answer ✅Life and Health Insurance Guaranty Association A policy that becomes a Modified Endowment Contract (MEC) - Correct Answer ✅Will lose many of its tax advantage Which provision allows the policy owner to change a term life policy to a permanent one without providing proof of health? - Correct Answer ✅Conversion 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 ✅Conditional receipt; Binds the insurer to coverage as of the date of the application or medical exam, provided the proposed insured is determined to be an acceptable risk.
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Which of the following terms is defined as any transaction in which new life insurance or new annuity is to be purchased and existing life insurance or annuity is to be terminated or discontinued? - Correct Answer ✅Replacement Which of the following consists of an offer, acceptance, and consideration? - Correct Answer ✅Contract If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company - Correct Answer ✅Must continue the coverage to the end of the period of time for which the premium was accepted A vacancy that occurs during the NC Commissioner of Insurance's term of office MUST be filled by the - Correct Answer ✅Governor Variable Whole Life insurance can be described as - Correct Answer ✅Both an insurance and securities product
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Which of these statements about a Guaranteed Insurability Option rider is NOT true? - Correct Answer ✅Evidence of insurability is required when the option is exercised Which type of policy is considered to be overfunded, as stated by the IRS guidelines? - Correct Answer ✅Modified Endowment Contract Which of these insurance riders allows the applicant to have excess coverage? - Correct Answer ✅Term rider Which of the following actions requires a policy owner to provide proof of insurability in an Adjustable Life Policy? - Correct Answer ✅Increase face amount 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 6th 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; Modified Whole Life policies are distinguished by premiums that are
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W is a 39-year old female who just purchased an annuity to provide income for life starting at age60. All of these would be acceptable annuity choices EXCEPT a(n) - Correct Answer ✅Immediate annuity; start providing income pay N purchases an annuity by making payments in an amount no less than $ quarterly. This describes which of the following annuities? - Correct Answer ✅Flexible Installment Deferred How would a contingent beneficiary receive the policy proceeds in an Accidental Death and Dismemberment (AD&D) policy? - Correct Answer ✅If the primary beneficiary dies before the insured Which of the following is an element of a Variable Life policy? - Correct Answer ✅A fixed, level premium Insurance agents MUST obtain a license from NC's - Correct Answer ✅Commissioner of Insurance
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Which type of life policy contains a monthly mortality charge as well as self- directed investment choices? - Correct Answer ✅Variable Universal Life Which of these is NOT a type of agent authority? - Correct Answer ✅Principal; express, implied, and apparent The annuity that represents the largest possible monthly payment to an individual annuitant is a(n) - Correct Answer ✅Straight Life Annuity; because its based on life expectancy, but it creates a risk that the annuitant may die early and forfeit much of the value of the following annuity to the insurance company. Which of these types of policies may NOT have the Automatic Premium Loan provision attached to it? - Correct Answer ✅Decreasing term An engineering firm that would suffer financially from the death of a project manager should purchase a - Correct Answer ✅Key person life policy
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A policy owner is allowed to pay premiums more than once a year under which provision? - Correct Answer ✅Mode of Premium 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 ✅Suspend, revoke, or refuse to renew the agent's license An agent that has been or 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 ✅ 10 A Whole Life insurance policy owner does not risk to continue making premiums payments. Which of the following enables the policy owner to sell the policy for more than its cash value? - Correct Answer ✅Life settlement contract
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Every insurance agent/broker MUST maintain all records, books, and documents for insurance transactions for a period of not less than - Correct Answer ✅5 years P is a 40-year woman and would like to purchase an annuity that will provide a lifetime income stream beginning at 60-years old. Which of the following did she NOT buy? - Correct Answer ✅An immediate annuity What determines the full amount of social security retirement benefits a qualified individual is entitled to receive? - Correct Answer ✅Primary Insurance Amount (PIA) K purchased a $10,000 Life Policy that will pay the face amount to her if she lives to age 65, or to her beneficiary if she dies before age 65. K purchased which of the following types of policies? - Correct Answer ✅Endowment at Age 65; cash values that grow at a rapid pace so that the policy matures or endows at a specified date before age 100. Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is - Correct Answer ✅Twisting
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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 ✅Cost of insurance Which provision is NOT a requirement in a group policy? - Correct Answer ✅Accidental An employee with $25,000 group term life coverage was recently fired. The employee's group coverage may be converted to a - Correct Answer ✅$25,000 individual whole life policy 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, Whose life is covered on a life insurance policy that contains a payor benefit clause? - Correct Answer ✅Child; A payor benefit clause is generally added to a life policy that insures the life of a juvenile. It provides continuance of insurance coverage in the event of the death or total disability of the individual responsible for the payment of premiums.
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Insurers organized under the laws of NC are called - Correct Answer ✅Domestic companies Which statement regarding 3rd party ownership of a life insurance policy is true? - Correct Answer ✅It is used extensively in estate-planning as well as business circumstances Which of the following provisions guarantees that premiums will be waived if a Juvenile Life policy owner becomes disabled? - Correct Answer ✅Payor clause When is the face amount paid under a Joint Life and Survivor policy? - Correct Answer ✅Upon death of the last insured A policy owner 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 ✅Irrevocable
