Insurance exam

A licensed agent ceases to maintain his residency in North Carolina. Therefore, he must deliver his license or licenses to the Commissioner within how many days of terminating his residency?

30 days

How many days notice must an insurer provide to an insured regarding the lapse of a policy due to outstanding loans?

30 Days

An individual purchased a $100,000 Joint Life policy on himself and his wife. Eight years later, he died in an automobile. How much will his wife receive from the policy?

$100,000

What is the maximum face amount on an industrial life policy?

1,000

How long does a North Carolina Agent have to notify the Department of Insurance in the event of a change in residence address?

10 business days

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

15

The reinstatement provision in life insurance poilcies in this state allows an owner of a lapsed policy reestablish it within how many years?

5

*Policy loan requests, except for loan requests for payment of due premiums, may be deferred for a period of up to

6 months

What is the waiting period on a Waiver of Premium rider in life insurance policies?

6 months

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

What is ther maximum loan amount a policyowner may withdrawal from a variable universal life insurance policy?

An amount not exceeding the cash value

The required privacy disclosure notice must be provided by insurer to current policyholders at least

Annually during the continuation of the policy

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

Applicants who may require a larger death benefit in the furture should buy converitable term insurance.

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

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

What type of an interest rate is guaranteed in universal life policies?

Contract interest rate

An insured and his spouse recently had a child. Which of the following riders would allow the couple to insure the child for a limited period of time at a specified amount?

Childern's term rider

A legally acceptable attempt by an existing insurer to dissuade a current policyowner from the replacement of existing life insurance is called

Conservation

When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?

Consideration

Which of the following will NOT be an appropriate use of a deferred annuity A) Accumulating funds in an IRA B)Funding a child's college education C)Creating an estate D)Accumulating retirement funds

Creating an estate

All of the following describe the purpose of the North Carolina regulations governing the soilcation of life insurance EXCEPT A) Educate the buyer about policy protection by the Guaranty Association B) Require insurers to deliver information to applicants to improve their ability to select the most appropriate kind of life insurance C) Improve the buyer's understanding of the basic features of the poilcy D) Improve the ability of the buyer to evaluate the relative costs of similar life plans

Educate the buyer about policy protection by the Guaranty Association

When the insured selects the extended term nonforfeiture option, the cash value will be used to purchase term insurance with what face amount?

Equal to the orginal policy for as long as the cash values will purchase

When a whole life policy is surrendered for its nonforfeiture value, what is the automatic option?

Extended term

An important fact about the financial status of an insurer was deliberately withheld. Which of the following terms best describes this action?

False financial statement

W owns a policy in which she is covered as the bread-winner with permanent insurance and with decreasing term insurance in the form of the rider. What type of policy is this ?

Family income policy

A father purchases a life insurance policy on his teenage daughter and adds the Payor Benefit rider. In which of the following scenarios will the rider waive the payment of premium?

If the father is disable for more than 6 months

A Return of Premium term life policy is written as what type od term coverage

Increasing

The provison that set 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

Insuring clause

All of the following statements are true regarding an Ordinary (Straight) Life policy EXCEPT:

It does not have a guaranteed death benefit

Which of the following is TRUE of level term insurance ?

It is temporary protection

If a retirement plan or annuity is "qualified", this means

Its satisfies IRS requirements for favorable tax treatment

Twin brothers are starting a new business. They know it will take several years to build the business to the point that they can pay off the debt incurred in starting the business. What type of insurance would be the most affordable and still provide a death benefit should one of them die ?

Joint Life

when comparing a Joint policy to two individual life policies of the same amount on the same insured, which condition is true?

Joint Life has a lower premium than the total of the two individual policies

Your cilent 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 guaranteed under a variable whole life insurance policy?

Minimum death benefit

Guaranteeing future dividends is considered to be an unfair or deceptive act known as

Misrepresentation

Dividends received on participating life insurance policies are

Not taxable because they are a return of unused premiums

During replacement of life insurance, a replacing insurer must do which of the following?

Obtain a list of all the insurance polices that will be replaced

Insurance contacts are unilateral in nature. What does that mean?

Only one party make a promise

Which Universal Life option has a gradually increasing cash value and a level death benefit?

Option A

Traditional IRA (Individual Retirement Account) contributions are tax deductible based on which of the following A) IRA limit B) Owner's Income C) How long the plan has been in force D) Owner's age

Owner's Income

Which divided option will increase the death benefit?

Paid-up additions

Which of the following has the right to convert the existing term covergae to permanent Insurance

Policyowner

All of the following are true of annually renewable term insurance EXCEPT

Proof of insurability must be provided at each renewal

The Guaranteed Insurability Rider allows the owner to purchase additional of life insurance without proof of insurability at all of the following EXPECT

Purchase of a new home

Which of the following actions does NOT constitute false adverstising?

Stating that dividends are nto guaranteed

Which of the following is NOT true regarding the annuitant A) The annuitant must be a natural person B) The annuitant cannot be the same person as the annuity owner C) The annuitant's life expectancy is taken into consideration for the annunity D) The annuitant receives the annuity benefits

The annuitant cannot be the same person as the annuity owner

The annuity owners dies during the accumulation period without naming a beneficiary. Annuity's cash value exceeds premiums paid. Which of the following

The cash value will be paid to the annuitant's estate

The poilcyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

The policyowner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change?

The death benefit can be increased by providing evidence of insurability

An insured decides to surrender his Whole Life insurance policy. The cash value at surrender is higher than the premiums paid into the policy, due to interest. What part of te surrender value would be income taxable ?

The difference between the premiums paid and the cash value

With Adjustable Life, the owner can change all of the following EXCEPT

The insured

An insured purchased a 10-year level term life policy that is guaranteed renewable and convertible. What happens at the end of the 10-year term?

The insured may renew the policy for another 10 years, but at a higher premium rate.

The sole beneficiary of a life insurance policy dies before the insured. If the policyowner fails to change the beneficiary before the insured's death, the proceeds of the policy will go to ?

The insured's estate

All of the following statements about indexed whole life insurance are correct EXPECT

The policy face amount remains level throughout the life of the policy

Which of the following bears the investment risk in a variable life insurance policy?

The policyowner

All of the following are true of the Survivorship Life policy EXCEPT

The premium is based on the age of each insured

All of the following identify purposes of the Insurance Information and Privacy Act EXCEPT

To establish fair and marketable advertisement procedures

Which of the following types of insurance is investment based, has a level fixed premium, and a nonguaranteed cash value?

Variable whole life

Which of the following is a key distinction between variable whole life and variable universal life products? A) Variable universal life is regulated solely through FINRA B) Variable whole life allows policy loans from the cah value C) Variable universal life has a fixed premium. D) Variable whole life has a guaranteed death benefit

Variable whole life has a guaranteed death benefit

A graded premium life insurance policy is modified form of

Whole life

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

conservation effort