Life Insurance NC EXAM
Questions and Answers 100%
PASS
Nathan and Sarah want to fund their IRA. Which of the following vehicles for funding is NOT
allowed?—ANSWER--Life Insurance
Which of the following statements about a modified endowment contract (MEC) is incorrect:
1. MECS offer tax free death benefits
2.mecs are a special type of life insurance under federal income tax law
3. Mecs are life insurance and have tax deffered cash accumulation
4. Mecs are not life insurance but do offer tax free death benefits—ANSWER--3. MECS are
life insurance and have tax deffered cash value accumulation
Mr. and Mrs. Burden receive annuity payments. Mr. Burden dies, but Mrs. Burden continues
to receive payments. The Burdens have a—ANSWER--Joint life and survivorship annuity
settlement option
An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance
company—ANSWER--will automatically institute the extended term option
, Which of the following is considered an income need when determining the amount a
person needs for personal life insurance?—ANSWER--Family Dependency; there are three
distinct income need periods though; family dependency, retirement, and retirement
Once a policy has lapsed, the insured usually can reinstate the policy, provided proof of
insurability is shown, if all back premiums due—ANSWER--Plus interest have been repaid
and fewer than 3 years have lapsed
One of the greatest advantages of convertible and renewable term policies is that—
ANSWER--the insured is not required to show proof of insurability in order to renew or
convert.
When the entire death benefit is paid in a lump sum to a beneficiary, it is—ANSWER--Not
taxable as income (not taxable as income as a individual or business)
if the death benefit is not a lump sum the original db is not taxable but the interst earned on
the proceeds are taxable
In group insurance, the evidence of an agreement between the insurer and the employer or
association is the—ANSWER--Contract
Which of the following classification of risks would typically have the lowest premium
payment?—ANSWER--Preferred Risks
All the following individuals are required to sign documents to complete the insurance
application EXCEPT:—ANSWER--The beneficiary
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
Questions and Answers 100%
PASS
Nathan and Sarah want to fund their IRA. Which of the following vehicles for funding is NOT
allowed?—ANSWER--Life Insurance
Which of the following statements about a modified endowment contract (MEC) is incorrect:
1. MECS offer tax free death benefits
2.mecs are a special type of life insurance under federal income tax law
3. Mecs are life insurance and have tax deffered cash accumulation
4. Mecs are not life insurance but do offer tax free death benefits—ANSWER--3. MECS are
life insurance and have tax deffered cash value accumulation
Mr. and Mrs. Burden receive annuity payments. Mr. Burden dies, but Mrs. Burden continues
to receive payments. The Burdens have a—ANSWER--Joint life and survivorship annuity
settlement option
An insured allows a permanent policy to lapse. Unless otherwise instructed, the insurance
company—ANSWER--will automatically institute the extended term option
, Which of the following is considered an income need when determining the amount a
person needs for personal life insurance?—ANSWER--Family Dependency; there are three
distinct income need periods though; family dependency, retirement, and retirement
Once a policy has lapsed, the insured usually can reinstate the policy, provided proof of
insurability is shown, if all back premiums due—ANSWER--Plus interest have been repaid
and fewer than 3 years have lapsed
One of the greatest advantages of convertible and renewable term policies is that—
ANSWER--the insured is not required to show proof of insurability in order to renew or
convert.
When the entire death benefit is paid in a lump sum to a beneficiary, it is—ANSWER--Not
taxable as income (not taxable as income as a individual or business)
if the death benefit is not a lump sum the original db is not taxable but the interst earned on
the proceeds are taxable
In group insurance, the evidence of an agreement between the insurer and the employer or
association is the—ANSWER--Contract
Which of the following classification of risks would typically have the lowest premium
payment?—ANSWER--Preferred Risks
All the following individuals are required to sign documents to complete the insurance
application EXCEPT:—ANSWER--The beneficiary
© 2026 Copyright. All Rights Reserved. This document is
protected by copyright law, Copyrighted By Brittie Donald
