NC Life Insurance Exam (LATEST UPDATE
2026) – Comprehensive Questions with
Verified Correct Answers and Complete
Solutions (100% Accurate)
1.
What is the minimum grace period required in North Carolina?
A. 10 days
B. 20 days
C. 31 days
D. 60 days
✅ Answer: C — 31 days
Rationale:
North Carolina law requires a minimum 31-day grace period after the premium due date.
Coverage remains active during this time.
2.
During the grace period, if the insured dies, what happens?
A. No benefit paid
B. Full benefit paid with no deduction
C. Benefit paid minus overdue premium
D. Policy void
✅ Answer: C
Rationale:
NC law allows insurers to deduct unpaid premiums from the death benefit if death occurs
during the grace period.
,3.
What is the standard free-look period in North Carolina?
A. 5 days
B. 10 days
C. 20 days
D. 30 days
✅ Answer: B — 10 days
Rationale:
• Standard policies = 10 days
• Replacement policies = 30 days
4.
What is the free-look period for replacement policies in NC?
A. 10 days
B. 15 days
C. 20 days
D. 30 days
✅ Answer: D — 30 days
5.
What is the incontestability period in North Carolina?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
✅ Answer: B — 2 years
,Rationale:
After 2 years, the insurer cannot deny a claim due to misstatements (except nonpayment or
fraud).
6.
When does the incontestability period begin?
A. Application date
B. Policy issue date
C. First premium
D. Delivery date
✅ Answer: B
7.
Which is an exception to incontestability?
A. Age misstatement
B. Fraud
C. Beneficiary change
D. Policy loan
✅ Answer: B
Rationale:
Fraud can still void a policy even after 2 years.
8.
What is the suicide clause period in NC?
A. 1 year
B. 2 years
, C. 3 years
D. Lifetime
✅ Answer: B — 2 years
Rationale:
• Suicide within 2 years → refund of premiums only
• After 2 years → full benefit paid
9.
If suicide occurs within the exclusion period, the insurer pays:
A. Full death benefit
B. Nothing
C. Premiums paid
D. Half benefit
✅ Answer: C
10.
What is the reinstatement period in NC?
A. 1 year
B. 3 years
C. 5 years
D. 10 years
✅ Answer: C — 5 years
Rationale:
Policies may be reinstated within 5 years after lapse, with proof of insurability and back
premiums.
11.
2026) – Comprehensive Questions with
Verified Correct Answers and Complete
Solutions (100% Accurate)
1.
What is the minimum grace period required in North Carolina?
A. 10 days
B. 20 days
C. 31 days
D. 60 days
✅ Answer: C — 31 days
Rationale:
North Carolina law requires a minimum 31-day grace period after the premium due date.
Coverage remains active during this time.
2.
During the grace period, if the insured dies, what happens?
A. No benefit paid
B. Full benefit paid with no deduction
C. Benefit paid minus overdue premium
D. Policy void
✅ Answer: C
Rationale:
NC law allows insurers to deduct unpaid premiums from the death benefit if death occurs
during the grace period.
,3.
What is the standard free-look period in North Carolina?
A. 5 days
B. 10 days
C. 20 days
D. 30 days
✅ Answer: B — 10 days
Rationale:
• Standard policies = 10 days
• Replacement policies = 30 days
4.
What is the free-look period for replacement policies in NC?
A. 10 days
B. 15 days
C. 20 days
D. 30 days
✅ Answer: D — 30 days
5.
What is the incontestability period in North Carolina?
A. 1 year
B. 2 years
C. 3 years
D. 5 years
✅ Answer: B — 2 years
,Rationale:
After 2 years, the insurer cannot deny a claim due to misstatements (except nonpayment or
fraud).
6.
When does the incontestability period begin?
A. Application date
B. Policy issue date
C. First premium
D. Delivery date
✅ Answer: B
7.
Which is an exception to incontestability?
A. Age misstatement
B. Fraud
C. Beneficiary change
D. Policy loan
✅ Answer: B
Rationale:
Fraud can still void a policy even after 2 years.
8.
What is the suicide clause period in NC?
A. 1 year
B. 2 years
, C. 3 years
D. Lifetime
✅ Answer: B — 2 years
Rationale:
• Suicide within 2 years → refund of premiums only
• After 2 years → full benefit paid
9.
If suicide occurs within the exclusion period, the insurer pays:
A. Full death benefit
B. Nothing
C. Premiums paid
D. Half benefit
✅ Answer: C
10.
What is the reinstatement period in NC?
A. 1 year
B. 3 years
C. 5 years
D. 10 years
✅ Answer: C — 5 years
Rationale:
Policies may be reinstated within 5 years after lapse, with proof of insurability and back
premiums.
11.
