North Carolina Life Insurance
As defined in the insurance statutes of this state, what is the maximum face amount on an industrial life policy?
$1,000
An individual purchases a $100k point life policy on himself and his wife. Eight years later, he died in an automobile accident. How much will his wife receive from the policy:
$100,000
An insured decides to surrender his $100,000 Whole Life policy. The premiums paid into the policy added up to $15,000. At policy surrender, the cash surrender value was $18,000. What part of the surrender value would be income taxable?
$3,000
f $100,000 of life insurance proceeds were used in a settlement option, which paid $13,000 per year for ten years, which of the following would be taxable annually?
$3,000
Before he died, an annuitant had received $12,500 in monthly benefits from his $25,000 straight life annuity. He was also insured under a $50,000 paid-up whole-life policy that named his wife as the primary beneficiary. Considering both contracts, how much will the annuitant's spouse receive in benefits?
$50,000. The life policy would pay the face amount, but because of the settlement option selected on the annuity, payments would cease upon the annuitant's death.
If the Commissioner is scheduling a hearing for a potential violation of the Insurance Code, what is the minimum required notice?
10 Days
If the commissioner is scheduling a hearing for a potential violation of the insurance code, what is the minimum required notice?
10 days
What percentage of a company's employees must take part In a noncontributory group life plan?
100%
What percentage of a company's employees must take part in a noncontributory group life plan?
100%
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% participation of members is required in noncontributory plans.
The required privacy disclosure notice must be provided by the insurer to current policyholders at least once in any period of
12 Months
What is the number of credits required for fully insured status for social security disability benefits?
40
An Internal Revenue Code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) plan (TSA)
An internal revenue code provision that specifically provides for an individual retirement plan for public school teachers is a(n)
403(b) plan (TSA)
To attain currently insured status under social security, a worker must have earned at least how many credits during the last 13 quarters:
6 Credits
For how long is an insurance company allowed to defer policy loan requests?
6 months
Which of the following is the required number of participants in a contributory group plan?
75%
all of the following are true of key person insurance EXCEPT: A. The plan is funded by permanent insurance only B. There is no limitation on the number of key employee plans in force at any one time. C. The employer is the owner, payor and beneficiary of the policy. D. The key employee is the insured
A.
Insurance policies are not drawn up through negotiations, and an insured has little to say about its provisions. What contract characteristic does this describe?
Adhesion
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specific fixed amount is liquidated?
Annuity Certain
Which of the following is a short-term annuity that limits the amounts paid to a specific fixed period or until a specified fixed amount is liquidated?
Annuity certain
Which of the following is INCORRECT regarding a $100k 20-year level term policy?
At the end of 20 years, the policy will equal $100,000
Which of the following is NOT true regarding an annuity certain?
Benefits stop at the annuitant's death
Which of the following would describe a legal document which would dictate who can buy a deceased partner's share of a business and for what amount?
Buy-Sell Agreement
Which of the following is NOT an example of a business use of Life Insurance? A. Executive Bonuses B. Key Person C. Workers Compensation D. Buy-Sell Funding
C. Workers Compensation
A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of
Coercion
The proposed insured makes the premium payment on a new insurance policy. If the insured should die, the insurer will pay the death benefit to the beneficiary if the policy is approved. This is an example of what kind of contract?
Conditional
When both parties to a contract must perform certain duties and follow rules of conduct to make the contract enforceable, the contract is:
Conditional
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated?
Consideration
Which of the following is NOT an essential element of an insurance contract?
Counteroffer
What is another name for interest-sensitive whole life insurance?
Current assumption life
hat is another name for interest-sensitive whole life insurance?
Current assumption life
An individual has been making periodic premium payments on an annuity. The annuity income payments are scheduled to begin after 1 year since the annuity was purchased. What type of annuity is this?
D
All of the following benefits are available under social security EXCEPT: A. Old-Age and Retirement Benefits B. Disability Benefits C. Death Benefits D. Welfare Benefits
D. Welfare Benefits
n which of the following methods of changing a beneficiary does the policy owner send the contract to the home office of the insurer for approval and change?
Endorsement method
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 original policy for as long as the cash values will purchase.
ntimidating or discouraging a claimant from seeking legal advice would be a violation of which of the following?
Ethical Standards
Which of the following best describes the aleatory nature of an insurance contract?
Exchange of unequal values
Which nonforfeiture option has the highest amount of insurance protection?
Extended Term
What does "level" refer to in level-term insurance?
Face Amount
A young father would like a life insurance policy to provide coverage for all five family members at the Lowest cost. Which type of policy would he most likely buy?
Family protection policy
Under which installments option does the annuitant select the amount of each payment, and the insurer determines how long they will pay benefits?
Fixed Amount
Which of the following is not a characteristic of universal life insurance?
Fixed Premium
What type of premium do both universal life and variable universal life policies have?
Flexibile
Which is TRUE about the cash surrender nonforfeiture option?
Funds exceeding the premium paid are taxable as ordinary income.
A lucky individual won the state lottery, so the state will be sending him a check each month for the next 25 years, what type of annuity products are they likely to use to provide these benefits?
Immediate Annuity
An insurer receives a report regarding a potential insured that includes the insured's financial status, hobbies, and habits. What type of report is that?
Inspection report
What is the benefit of choosing extended term as a nonforfeiture option?
It has the highest amount of insurance protection
Which of the following best describes annually renewable term insurance?
It is a Level-term insurance
A Policy will pay the death benefit if the insured dies during the 20-year term premium-paying period, and nothing if death occurs after the 20-year period. What type of policy is this?
Level term
Which life insurance settlement option guarantees payments for a lifetime of the recipient, but also specifies a guaranteed period, during which, if the original recipient dies, the payments will continue to a designated beneficiary?
Life income with period certain
Which of the following statements is TRUE concerning whole life insurance?
Lump-sum death benefits are not taxable
Which part of an insurance application would contain information regarding the cause of death of the applicant's deceased relatives?
Medical Information
Under a straight life annuity, if the annuitant dies before the principal amount is paid out, the beneficiary will receive?
Nothing, the payments will cease
What is the definition of a unilateral contract?
One-sided: only one party makes an enforceable promise.
The dividend option in which the policy owner uses dividends to purchase a term policy, for now, year is referred to as the:
One-year term option
Which Universal Life option has a gradually increasing cash value and a level death benefit?
Option A
An individual buys a flexible premium deferred life annuity with 2o years period certain. What would his beneficiary receive if he died 5 years after beginning the annuity phase?
Payments for 15 years.
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
form of the annuity settlement options provided payments to an annuitant for the rest of the annuitant's life and ceases at the annuitant's death?
Pure Life
Which of the following best describes a pure life annuity settlement option?
Pure life provides payment for as long as the annuitant is alive.
Which nonforfeiture option provides coverage for the longest period of time?
Reduced Paid-Up
Which nonforfeiture option provides coverages for the longest period of time?
Reduced Paid-Up
A man decided to purchase a $100k annually renewable term life policy to provide additional protection until his children finish college. He discovered that his policy:
Required a premium increase each renewal
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs are suitable for large companies
Which two terms are associated directly with the way an annuity is funded?
Single Payment or Periodic payments
Which two terms are associated directly with the way an annuity is funded?
Single payment or periodic payments
Which of the following types of annuities will generally provide the highest monthly income?
Straight Life
Your client is planning to retire. She has accumulated $100,000 in a retirement annuity and now wants to select the benefit option that will pay the largest monthly amount for as long as she lives. As her agent, you should recommend
Straight Life
All of the following employees may use a 403(b) for their retirement EXCEPT:
The CEO of a private corporation
The regulation of the insurance industry primarily rests with
The State
Which of the following is NOT a consideration in a policy?
The application was given to a prospective insured
Which of the following is TRUE regarding an indeterminate premium whole-life policy?
The premium can be raised up to a guaranteed maximum rate.
In an Adjustable Life policy, all of the following can be changed by the policy owner EXCEPT:
The type of investment
Which of the following is TRUE about nonforfeiture values?
They are required by state law to be included in the policy.
Under a SIMPLE plan, which of the following is TRUE regarding taxation on both contributions and earnings?
They are tax deferred until withdrawn
applicant knowingly fails to communicate information that would help an underwriter make a sound decision regarding coverage.
This is an example of Concealment
When a licensee is accused of any act, omission, or misconduct that would subject the licensee to a license suspension or revocation, with the approval of the Commissioner, the license may be surrendered for a period of:
Time to be set by the commissioner
If only one party to an insurance contract has made a legally enforceable promise, what kind of contract is it?
Unilateral
Which of the following types of policies allows the policy owner to skip premium payments, provided that there is enough cash value in the policy to cover the premium amount?
Universal Life
Which of the following policies would have an IRS-required corridor or gap between the cash value and the death benefit?
Universal Life - Option A
In NC, a person who violated the law for false pretenses and cheats may be found guilty of a/an:
a felony
All of the following could own group life insurance EXCEPT
a group needing low-cost life insurance
For variable products, underlying assets must be kept in
a separate account
A Universal Life Insurance policy is best described as a/an
annually renewable term policy with a cash value account
The full premium was submitted with the application for life insurance, and the policy was issued two weeks later as requested. When does the policy coverage become effective?
as of the application date
The commissioner reports a violation of insurance laws and regulations to the
attorney general
A person who knowingly obtains information about an individual from an agent or the insurer under false pretenses has committed a:
class one misdemeanor
If a change needs to be made to an application for insurance, the agent may do all of the following EXCEPT:
erase the incorrect answer and record the correct answer.
What does "level" term refer to in level term insurance?
face amount
All of the following are business uses of life insurance EXCEPT:
funding against the company's general financial loss
All of the following are nonforfeiture options EXCEPT:
interest only
What is the official name of the social security program?
old age survivors disability insurance
The dividend option in which the policy owner uses dividends to purchase a term policy for one year is referred to as the:
one-year term option
An insured pays $1,200 annually for her life insurance premium. The insured applies this year's $300 worth of accumulated dividends to the next year's premium, thus reducing it to $900. What option does this describe?
reduction of premium
All of the following statements are true regarding mortgage protection insurance except
the face amount remains the same throughout the life of the policy
What kind of policy allows withdrawals or partial surrenders:
universal life
Which of the following Life Insurance policies would be considered interest sensitive?
universal life
All of the following benefits are available under social security EXCEPT
welfare benefits
The main difference between immediate and deferred annuities is:
when the income payment begins