NC Life Exam

Prior to issuance of a license as a broker, the applicant shall file with the Comissioner a bond in the sum of not less than

15k

The validity of the policy cannot be conested once it has been in force for at least how many years after its date of issue?

2 Years

If any insurance agent or broker embezzles or fraudulently converts to his own use any money received from insurance transactions, that agent is guilty of

A felony and is subject to fines based on the dollar amount in question

If any insurance agent or broker embezzles or fraudulently converts to his own use any money received from insurance transactions, that agent or broker is guilty of

A felony and is subject to fines based on the dollar amount in question

Which of the following must an insurer obtain in order to transact insurance within a given state

Certificate of Authority

Which of the following must an insurer obtain in order to transact insurance within a given state?

Certificate of Authority

An insured intentionally did not disclose a material fact on an application for insurance. This would be considered

Concealment

A policy which pays monthly income upon the death of the breadwinner for a predetermined number of years after death, plus a lump sum at death, and combines level and whole life is known as which policy?

Family maintenance

J is receiving fixed amount benefit payments from his late wifes insurance policy. He was told that if he dies before all the benefits are paid, the remaining amount will go to the contingent beneficiary. Which settlement option did J choose?

Fixed amount

If $100k of life insurance proceeds were used in a settlement option, which paid $13k per year for ten years, which of the following would be taxable annually?

$3000

In life insurance, when must the policy summary be presented?

Before accepting the initial premium deposit

Which rider, when attached to a permanent life insurance policy, provides an amount of insurance on every family member?

Family term rider

All of the following violations committed by any licensed person will be considered a Class H felony EXCEPT

signing blank contracts

The two types of assignemnts are

Absolute and collateral

When a viator sells a life insurance policy,

Absolute assignment is given to the viatical settlement company

All of the following statements regarding continuing educational requirement are true EXCEPT

Agents holding more than one license are required to complete no more than 12 credit hours per year

The general powers and duties of the Commissioner of Insurance include all of the following EXCEPT

Enact statutes to govern the insurance industry

The provision which states that both the policy and a copy of the application form the contract between the policyowner and the insurer is called

Entire Contract

When an insured makes truthful statements on the application for insurance and pays the required premium, it is know as what

Consideration

Z falls from the roof of his house while fixing it and damages his spinal column enough to render him disabled for a year. His insurance policy carries a Disability Income Benefit rider. Which of the following benefits will Z receive?

Monthly premium waiver and monthly income

When an insurance producer conducts business under any name other than the producers legal name, he or she must:

Notify the commissioner before using the assumed name

A rider attached to a life insurance policy that provides coverage on the insured's family members is called the

Other-insured rider

All of the following entities regulate variable life policies EXCEPT

The Guaranty Association

The regulation of the insurance industry primarily rests with

The State

Which of the following indicates the person upon whose life the annuity income amount is determined?

Annuitant

In a variable life insurnace policy, all of the following assets are held in the insurance company's general account EXCEPT

Cash surrender values

Under an extended term nonforfeiture option, the policy cash value is converted to

The same face amount as in the whole life policy

If the annuitant dies during the accumulation period, who will receive the annuity benefits

beneficiary

If an insured receives accelerated death benefits, what is the least amount of the original death benefit that the beneficiary would receive after the insureds death?

0%

How long is the grace period for an individual life insurance policy?

1 month

An insurance agent changes his address. How long will the agent be given to notify the Department of Insurance

10 business days

An individual has just borrowed 10k from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Decreasing term

Which of the following is true regarding a joint life annuity?

The payments stop at the first death

All of the following are true of the Survivorship life expectancy policy EXCEPT

The premium is based on the age of each insured

If a deferred annuity is surrendered prematurely, a surrender charge is imposed. How is the surrender charge determined

The surrender charge is a percentage of the cash value and decreases over time

Group life insurance is a single policy written to provide coverage to members of a group. Which of the following statements concerning group life is CORRECT

100% of participation of members is required in noncontributory plans

Within how many months must a person be expected to die from sickness in order to be classified as "terminally ill"?

24 months

How long is a free look period for replacement policies

30 days

A distribution from an employer-sponsored retirement or from an IRA is eligible for a tax-free rollover if is reinvested in an IRA within

60 days

Which of the following riders pays a beneficiary a death benefit that is double or triple the face amount if the insured's death was caused by an accident as defined in the policy?

An accidental death rider

A universal life insurance policy has two types of interest rate that are called

Guaranteed and Current

If an immediate annuity is purchased with the face amount at death or with the cash value at surrender, this would be considered a

Settlement Option

All of the following statements are TRUE regarding the use of pretext interviews to obtain information in connection with an insurance transaction EXCEPT

They are never allowed

Which of the follow is TRUE about nonforfeiture values?

They are required by state law to be included in the policy

All of the following are true regarding the guaranteed insurability rider EXCEPT

This rider is available to all insureds with no additional premium

Why should the producer personally deliver the policy when the first premium has already been paid?

To help the insured understand all aspects of the contract

A married couple purchase a life insurance policy on their newbord baby. They are concerned about what would to the policy if either one of them were unable to continue making the premium payments due to death or disability. Which policy rider should their agent reccomend?

Payor Benefit

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

Which statement below is INCORRECT regarding the type of term insurance that fits the best with the applicants needs?

Applicants who may require a larger death benefit in the future should buy convertible term insurance

A licensee decides to terminate his residency in this state. Which of the following would be an appropriate action

Delivering the license to the commissioner within 30 days

Which of the following will NOT be considered unfair discrimination by insurers?

Discriminating in benefits and coverage based on the insureds habits and lifestyle

All of the following describe the purpose of the NC regulations governing the solicitation of life insurance EXCEPT

Educate the buyer about policy protection by the Guaranty Association

When an annuity is used to provide savings for the education expenses, a Last In First Out arrnagement is used. What is the last money to go into an annuity?

Interest

Which settlement option allows the insurer to retain the face amount but pay some income based on gain on the proceeds to the beneficiary at regular intervals

Interest only

Which of the following is TRUE

It is illegal for an insurer to advertise that policies are covered by the life and health guaranty association

Which of the following statements about the reinstatement provision is TRUE

It requires the policyowner to pay all overdue premiums with interest before the policy is reinstated

If a nonresident of NC may be licensed without taking an otherwise required exam if

The insurance regulator of the state of the applicants residence certifies that the applicant has passed a similiar written exam for the license being applied for in NC

Which of the following would be an example of an insurer participating in an unfair competition practice of discrimination?

Charging the insured higher premiums based on their race.

When an insurer tries to discourage a policyholder from replacing an existing policy, this is called

Conservation effort

The provision that sets forth the basic agreement between the insurer and the insured and states the insurer's promise to pay the death benefit upon the insured's death is called the

Insuring clause

During partial withdrawal from a universal life policy, which portion will be taxed?

Interest

Your client wants to provide a retirement income for his elderly parents in case something happens to him. He wants to make sure that both beneficiaries are guaranteed an income for life. Which settlement option should this policyowner select?

Joint and Survivor

Which of the following is correct concerning the taxation of premiums in a key-person life insurance policy

Premiums are not tax deductible as a business expense.

The required privacy disclosure notice must be provided by the insurer to current policyholders at least once in any period of

12 months

What happens to the face amount of a whole life policy if the insured reaches the age of 100

The face amount is paid to the insured

According to the life insurance replacement regulations, which of the following would be an example of policy replacement?

A policy is reissued with a reduction in cash value?

Which distribution(s) from the Modified Endowment Contract would be taxable as income at the time received to the extent that the cash calue of the contract immediately before the payment exceeds the investment in the contract?

Both partial cash surrender and policy loan

In NC, for licensing purposes, an applicant is considered a resident if

The applicant is a resident of a county in another state, the border of which county is contiguous with the state line of NC

Upon dead of the insured, the primary beneficiary discovers that the insured chose the interest only settlement option. What does this mean

The beneficiary will only receive payments on the interest earned on the death benefit

Which of the following policies would have an IRS required corridor gap between the cash value and the death benefit?

Universal Life - Option A

Which of the following terms is used to describe a person, other than a viator, that enters into or effectuates a viatical settlement contract?

Viatical settlement provider