Chapter 3 Life Policies
A written agreement to provide a Life Insurance Policy holder immediate cash in exchange for the sale and transfer of a Life Insurance Policy is a
Viatical Settlement
K works for XYZ Clothing Store from September through December each year. K works 45 hours a week for this period of time. The employer's Group Policy would consider K
not eligible for the insurance because as a seasonal employee K does not meet the definition of "employee" under North Carolina law
Which of the following terms is defined as any transaction in which new life insurance or a new annuity is to be purchased and existing life insurance or annuity is to be terminated or discontinued?
replacement
The Commissioner of Insurance may suspend or revoke the license of an agent who takes any of the following actions EXCEPT
represents more than one insurance company
All of the following actions are considered rebating EXCEPT
sharing commissions with other licensed and appointed agents
Inducing or attempting to induce any insured person through misrepresentation to lapse, forfeit, or surrender insurance is
twisting
Boycott, coercion, and intimidation that result in the unreasonable restraint of trade are prohibited under the North Carolina insurance laws covering
unfair trade practices
An agent's license can be suspended or revoked by
writing primary controlled business
Companies in North Carolina may transact solicitations for insurance ONLY through
licensed agents
The Commissioner of Insurance has the authority to examine the business records of all of the following entities EXCEPT
life insurance master policyholders
The funds used by the Life and Health Insurance Guaranty Association to carry out its purpose are obtained from the
member companies
If a company accepts a renewal premium payment that would extend coverage beyond the policy's MAXIMUM age limit, the company
must continue the coverage to the end of the period of time for which the premium was accepted
K pays on a $20,000 20-Year Endowment policy for 10 years and dies from an automobile accident. How much will the insurance company pay the beneficiary?
$20,000 death benefit". If the insured dies before the endowment's maturity, the policy's face value — also known as the "death benefit" — is paid in a lump sum to any beneficiaries.
Select the appropriate response 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?
10
Minors in North Carolina age __ and up can enter into life insurance contracts and have all the rights that come with ownership.
15
A person is required to be AT LEAST how old before he or she is licensed as an agent in North Carolina?
18
In North Carolina, life insurance policies have a contestability period of
2 yrs
According to the Information and Privacy Protection Act, when access to recorded personal information is requested following an adverse underwriting decision, the insurer must make the information available within how many business days?
30
If after satisfactory proof of loss, an insurer fails or refuses to pay death proceeds, the insurer must pay interest on the proceeds after how many days?
30 days
Every insurance agent/broker MUST maintain all records, books, and documents for insurance transactions for a period of not less than
5 yrs
Lapsed individual life insurance may be reinstated at any time within
5 yrs
An agent who sells an individual life insurance policy in North Carolina MUST deliver to the policyowner
A Policy Summary and Buyer's Guide
Which of the following types of insurance is exempt from the Rules Governing Life Insurance and Annuity Replacements?
Credit Life
Which of these statements describe a Modified Endowment Contract (MEC)?
Exceeds the maximum amount of premium that can be paid into a policy and still have it recognized as a life insurance contract
What does a Face Amount Plus Cash Value Policy supposed to pay at the insured's death?
Face amount plus the policy's cash value
A vacancy that occurs during the North Carolina Commissioner of Insurance's term of office MUST be filled by the
Governor
The rules and regulations of the Life and Health Insurance Guaranty Association in North Carolina apply to
Life and Health Policies issued by companies authorized in North Carolina
An insurance company formed under the laws of Canada would be known in North Carolina as
an alien company
The Misstatement of Age provision requires that if the age of the insured is misstated, then any amount payable is
an amount consists of the premiums paid for the policy if the policy was issued for over three years
One of the stated purposes of the Life and Health Insurance Guaranty Association is to
assist in the prevention of insurer insolvencies
Unfair discrimination is described as
charging diffrent rates for persons in the same class
Insurance agents MUST obtain a license from North Carolina's
commisoner of insurance
The following acts are examples of unfair methods of competition and deceptive practices in the business of insurance EXCEPT the use of
comparisons showing that a policy has higher benefits
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
defamation
The Commissioner of Insurance may examine the records of an insurance company in order to
determine the solvency of the company
The Rules Governing Life Insurance and Annuity Replacements define replacement as
exchanging an existing policy for a new policy
The Life and Health Insurance Guaranty Association is
funded by admitted insurance companies through assessments
An agent who signs a blank contract application or policy of insurance
guilty of a misdemenor
An insurance company MUST clearly specify questions designed to obtain information solely for marketing research
in any insurance transaction
The Insurance Information and Privacy Protection Act is designed to limit or direct the information collection activities of all of the following EXCEPT
insurance regulators
The Commissioner of insurance may suspend, revoke, or refuse to renew the license of an agent who
is found guilty of misrepresentation or fraud in obtaining the license
The amount received for a life insurance policy in a viatical settlement is
less than death benifit
