life

If the commissioner orders the payment of a monetary penalty instead of suspension and revocation of license, what is the maximum penalty according to state statutes? a. $100 b. $500 c. $1,000 d. $2,500

$1,000

In NC, the commissioner serves a term of how many years? a. 1 b. 2 c. 4 d. 6

4 years

To sell variable life insurance policies an agent must receive all of the following except: a. A life Insurance license b. a SEC registration c. a FINRA registration d. A securities license

A SEC registration

If the annuitant dies during the accumulation period, who will receive the annuity benefits? a. Owner b. Insurance Company c. Estate d. Beneficiary

Beneficiary

Which component increases in the increasing term insurance? a. Death benefit b. Cash value c. Interest on the proceeds d. premium

Death benefit

An insurer or authorized representative of the insurer that terminates the appointment, employment, or contract with agent shall notify the commissioner a. within 30 days after the effective date of termination b. within 60 c. within 45 d. 30 days prior

Within 30 days after the effective date of termination

Which of the following is NOT a characteristic of universal life insurance? a. Flexible death benefit b. Cash account c. Fixed premium d. Unbundled premium

Fixed premium

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a. Waiver of premium b. Payor benefit c. Jumping juvenile d. Juvenile premium provision

Payor benefit

Which of the following would NOT cause the death benefit to increase? a. Cost of living rider b. Accidental death rider c. Payor benefit rider d. Guaranteed insurability rider

Payor benefit rider

The insured had his wife named as the beneficiary of his life insurance policy. To insure that his wife had income for life after the insured's death, he chose the life income settlement option. The amount of payments will be determined by taking into account all of the following EXCEPT: a. Face amount of the policy b. The insured's age at death c. The beneficiary's life expectancy d. Projected interest rates

The insured's age at death

An adjustable life policy owner can change which of the following policy features? a. The mortality expense b. The investment account c. The insured d. The coverage period

The coverage period

When an insured makes truthful statements on the application and pays the required premium, it is known as which of the following? a. legal purpose b. contract of adhesion c. acceptance d. consideration

Consideration

Both universal life and variable universal life have a a. decreasing premium b. increasing premium c. Flexible premium d. level fixed premium

Flexible premium

Which of the following is NOT true about a group annuity? a. It can be qualified b. It can be tax deferred c. It can be owned by individual employees d. It can be noncontributory

It can be owned by individual employees

All of the following statements are true regarding installments for a fixed period annuity settlement option EXCEPT: a. It will pay the benefit only for a designated period of time b. The payments are not guaranteed for life c. The insurer determines the amount of each payment d. It is a life contingency option

It is a life contingency option

Which of the following is an example of a limited-pay life policy? a. Life paid-up at age 65 b. Renewable term to age 70 c. Level term life d. Straight life

Life paid-up at age 65

A private investigator has been hired by an insurance company to obtain a character report on an insurance applicant. The investigator contacts the applicant and requests an interview stating that he is conducting research for a publication. The applicant permits the interview and unknowingly gives information that will be used in the underwriting decision. Which of the following does this scenario describe? a. Insurance information investigation b. Misrepresentation c. Pretext interview d. Investigate consumer report

Pretext interview

Disclosure authorization forms must include all of the following EXCEPT: a. The date of the authorization b. The format in which the information must be shared c. The name of the insurer or agent D. The nature of the information authorized to be disclosed

The format in which the information must be shared

An employee quits his job on May 15 and doesn't convert his Group Life policy to an individual policy for 2 weeks. He dies in a freak accident on June 1. Which of the following statements is correct? a. The insurer will pay nothing because the employee has terminated his group insurance and hasn't started the individual one b. The insurer will pay the full death benefit from the group policy to the beneficiary c. The insurer will pay a reduced death benefit to the beneficiary d. The insurer will pay the death benefit minus one months premium

The insurer will pay the full death benefit from the group policy to the beneficiary

When an annuity is written, whose life expectancy is taken into account? a. Annuitant b. beneficiary c. Life expectancy is not a factor when writing an annuity d. Owner

Annuitant

Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a. Concealment b. indemnity c. representation d. Warranty

Warranty

What is the term for how frequently a policy owner pays premiums? a. schedule b. grace period c. consideration d. mode

Mode

B just bought a new car, which he anticipates will be paid off 4 years from now. He also wants to buy a life insurance policy, but is financially limited until the car is paid off. Which of the following policies would be best for B? a. Modified life b. Limited term c. limited pay d. interest-sensitive whole life

Modified life

The policy owner of an adjustable life policy wants to increase the death benefit. Which of the following statements is correct regarding this change? a. The death benefit can be increased by providing evidence of insurability b. The death benefit cannot be increased c. The death benefit can be increased only when the policy has developed a cash value d. The death benefit can be increased only by exchanging the existing policy for a new one

The death benefit can be increased by providing evidence of insurability

If the insured continually uses the automatic premium loan option to pay the policy premium a. The cash value will continue to increase b. The insurer will increase the premium amount c. The policy will terminate when the cash value is reduced to nothing d. The face amount of the policy will be reduced by the automatic premium lone amount

The policy will terminate when the cash value is reduced to nothing

All of the following are true about variable products EXCEPT: A. policy owners bear the investment risk b. The premiums are invested in the insurer's general account c. The minimum death benefit is guaranteed d. The cash value is not guaranteed

The premiums are invested in the insured's general account

Circulating deceptive sales material to the public is what type of unfair trade practice? a. Defamation b. Coercion c. Misrepresentation d. False advertising

False advertising

When would a 20-pay whole life policy endow? a. At the insured's age 65 b. After 20 payments c. In 20 years d. When the insured reaches age 100

When the insured reaches age 100

Which of the following statements is true concerning whole life insurance? a. policy loans are tax deductible b. lump-sum death benefits are not taxable c. dividend interest is not taxable d. premiums are tax deductible

lump-sum death benefits are not taxable

Which of the following is called a "second to die" policy? a. survivorship life b. family income c. Juvenile life d. joint life

survivorship life

How long does a North Carolina Agent have to notify the Department of Insurance in the event of a change in residence address? a. 60 business days b. Doesn't require notification c. 10 business days d. 30 business days

10 business days

Which nonforfeiture option has the highest amount of insurance protection? a. Decreasing term b. Reduced paid-up c. Extended term d. Conversion

Conversion

Which of the following statements is true concerning the accidental death rider? a. it is also known as triple indemnity rider b. this rider is only available to insureds over age 65 c. it is only available in group insurance d. it will pay double or triple the face amount

It will pay double or triple the face amount

Which is true about a spouse term rider? a. The rider is decreasing term insurance b. coverage is allowed up to age 75 c. The rider is usually level term insurance d. Coverage is allowed for an unlimited time

The rider is usually level term insurance

Which of the following is true regarding taxation of accelerated benefits under a life insurance policy? a. There is a 10% penalty for early distribution of the death benefit b. They are tax free to terminally ill insured c. They are always taxable to chronically ill insured d. They are always taxed

They are tax free to terminally ill insured

The rider in a whole life policy that allows the owner to forgo collecting the premium if the insured is disabled is called a. waiver of premium b. guaranteed insurability c. Waiver of cost of insurance d. Payor beneift

waiver of premium

An insured receives a monthly summary for his life insurance policy. He notices that the cash value of the policy is significantly lower this month than it was las month. What type of policy does he have? a. securities b. stock c. variable d. term

variable

Which is true about the cash surrender nonforfeiture option? a. The policy remains active for some time after the policyholder opts for cash b. The policyholder receives the original cash value of the policy c. Funds exceeding the premiums paid are taxable as ordinary income d. After the cash surrender, the insured is covered for a grace period of one month

Funds exceeding the premiums paid are taxable as ordinary income

If an insurer issued a policy based on the application that had unanswered questions, which of the following will be TRUE? a. The policy will be interpreted as if the insured did not have the answer to the question b. The policy will be void c. The insurer may deny coverage later, because of the information missing on the application d. The policy will be interpreted as if the insurer waived its right to have an answer on the application

The policy will be interpreted as if the insurer waived its right to have an answer on the application

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? a. As of the application date b. As of the delivery date c. AS of the first of the month after the policy issue d. as of the policy issue date

as of the application date

which of the following is not allowed in credit life insurance? a. creditor requiring that a debtor buys insurance from a certain insurer b. creditor having a collateral assignment on the policy c. creditor requiring that the debtor has life insurance d. creditor becoming a policy beneficiary

creditor requiring that a debtor buys insurance form a certain insurer

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? a. level term policy b. family (protection) policy c. universal life policy d. family income policy

family protection policy

Under a 20-pay whole life policy, in order for the policy to pay the death benefit to the beneficiary, the premiums must be paid a. for 20 years or until death, whichever is first to occur b. until the policy owner's age 65 c. for 20 years d. until the policy owner's age 100 when the policy matures

for 20 years or until death, whichever is first to occur

Which of the following named beneficiaries would not be able to receive the death benefit directly from the insurer in the event of insured's death? a. the former wife of the deceased insured b. minor son of deceased c. a business partner of the insured d. the wife of deceased

minor son

An individual is purchasing a permanent life insurance policy with a face value of $25,000. while this is all the insurance he can afford at the time, he wants to be sure that additional coverage will be available in the future. Which of the following options should be included in the policy? a. dividend options b. guaranteed renewable options c. nonforfeiture options d. guaranteed insurability options

Guaranteed insurability options

What required provision protects against unintentional lapse of the policy? a. Assignment b. payment of premiums c. Reinstatement d. Grace period

Grace period

Prior to the issuance of a license as a broker, the applicant must file a bond with the Commissioner. Which of the following is NOT a requirement? a. If a license is terminated, the commissioner must notify the bond holder in 10 business days b. The bond must be at least $15,000 c. If the license is terminated due to misconduct, the bond is forfeited d. If the bond is terminated, 30 day notice must be given by the bond holder to the commissioner

If the license is terminated due to misconduct, the bond is forfeited

In terms of social security, what is the interval spanning between the day when the youngest child turns 16 and before the surviving spouse turns 60 called? a. Latent interval b. Accumulation period c. blackout period d. Nonpayment interval

Blackout period

Persons who either assist or provide false or misleading information regarding a claim are guilty of a a. Civil violation b. Class C criminal offense c. misdemeanor d. Class H felony

Class H felony

An individual borrowed money at the bank to send his kid to college. Instead of purchasing Credit Life insurance, he used an existing life insurance policy to secure the debt. This would be called an a. Temporary assignment b. Change of beneficiary c. Assignment of ownership d. Collateral assignment

Collateral assignment

A legally acceptable attempt by an existing insurer to dissuade a current policy owner from the replacement of existing life insurance is called a. retention b. conservation c. solicitation d. rebating

Conservation

Which of the following are NOT fundable by annuities? a. Death benefits b. Cash accumulation for any reason c. A person's retirement d. Estate liquidation

Death benefits

All of the following describe the purpose of the North Carolina regulations governing the solicitation of life insurance except: a. educate the buyer about policy protection by Guaranty Association b. Require insurers to deliver information c. Improve buyer's understanding d. Improve ability of buyer to evaluate

Educate the buyer about policy protection by Guaranty Association

An employee quits her job where she has a balance of $10,000 in her qualified plan. If she decides to do a direct transfer from her plan to a traditional IRA, how much will be transferred from one plan administrator to another and what is the tax consequence of a direct transfer? a. $8,000, tax on growth only b. $10,000, tax on growth only c. $10,000, no tax consequence d. $8,000, no tax consequence

$10,000, no tax consequence

Annually renewable term policies provide a level death benefit for a premium that a. fluctuates b. increases annually c. decreases annually d. remains level

Increases annually

Which of the following allows the insurer to relieve a minor insured from premium payments if the minor's parents have died or become disabled? a. Jumping juvenile b. Juvenile premium provision c. Waiver of premium d. Payor benefit

Payor benefit

The commissioner must examine every domestic insurer at least once every a. Year b. 2 years c. 3 years d. 5 years

5 years

Which of the following protects the insured from an unintentional policy lapse due to a nonpayment of premium? a. Extended term b. Reinstatement c. Reduce-paid up d. Automatic premium loan

Automatic premium loan

Which of the following is TRUE about credit life insurance? a. Debtor is the policy beneficiary b. Creditor is the policy owner c. Debtor is the annuitant d. Creditor is the insured

Creditor is the policy owner

The factor added to the net premium to cover the costs of the insurer in obtaining and maintaining the business is called a. Dividend accumulation b. Premium tax c. expenses d. Legal reserve

Expenses

If a beneficiary wants a guarantee that benefits paid from principal and interest would be paid for a period of 10 years before being exhausted, what settlement option should the beneficiary select? a. Life with period certain b. Fixed amount c. Interest only d. Fixed period

Fixed period

An insurer devises an intimidated strategy in order to corner a large portion of the market. Which of the following best describes this practice? a. Unfair discrimination b. Defamation c. Illegal d. A legal advertising strategy

Illegal

The policy owner of a universal life policy may skip paying the premium and the policy will not lapse as long as a. the policy owner cannot skip premiums without the policy lapsing b. The next month's premium is sufficient to cover the current premium and the skipped amount c. The policy contains sufficient cash value to cover the cost of insurance d. The previous premium payments were high enough to create an excess of premium

The policy contains sufficient cash value to cover the cost of insurance

How are contributions to a tax-sheltered annuity treated with regards to taxation? a. They are never taxed b. They are taxed as income for the employee c. They are taxed as income for the employee, but are tax free upon withdrawal d. They are not included as income for the employee, but are taxable upon distribution

They are not included as income for the employee, but are taxable upon distribution

An insured purchased a life insurance policy. The agent told him that depending upon the company's investments and expense factors, the cash values could change from those shown in the policy at issue time. The policy is a/an a. adjustable life b. interest-sensitive whole life c. credit life d. annual renewable term

interest-sensitive whole life

A policy will pay the death benefit if the insured dies during the 20 year premium-paying period, and nothing if death occurs after the 20 year period. what type of policy is this? a. ordinary life policy b. limited pay whole life c. level term d. term to a specified age

level term