NC Life Insurance State Actual Exam
2026 NC Life Insurance State Exam
Latest Update 2026 Questions and
Correct Answers Rated A+
Term Insurance -Answer-Used for Temporary Situations. Net cost
highest in the long run. Premiums goes up every year based on
current (attained)age.
Term Insurance -Answer-Expire's at a certain age/Time in the future.
May be renewable up to a certain age or date with out a phyical Exam.
Level Term Insurance -Answer-Term insurance can be Renewed
annually. Has a level Face Amount at renewal, Premiums goes up.
Can be purchased for a Year or as often as 5, 10, 15, to 20 years
inclements with average premium. Premiums and Face Amounts are
"Level" for a period of "Time".
Decreasing Term Insurance -Answer-It is NOT Annual Renewable
term. Face Amount goes down, while Premiums remain the same.
Decreasing Term insurance is often used as a mortage redemption.
Can be converted to Whole Life, regardless of health. Premiums stays
the same. Costs increases as Face Amount decreases, by expiration
the Face Amount is Zero.
Increasing Term Insurance -Answer-Term is added as a rider to
Whole Life policies, at an extra cost. Face Amount goes up. It Allows
beneficiary to recieve Face Amount plus Premiums or Cash Value.
,Renewability -Answer-Most Term Is renewable up to a certain age
regardless of health. That can be renewed without proof of the
insureds insurability, up to a certain specified maximum age.
Convertibilty -Answer-Most are convertible to Whole Life policies
regardless of health. Conversions are based on current "attained" age.
NOT original age. Conversion may only be to a move expensive
policy, such as Whole Life.
Term insurance -Answer-You can not convert "Term to Term" You can
convert "Term to Whole Life" You can never convert to more coverage
than you have.
" If you want more insurance, you will have to pass a physical exam
and pay premiums upon your current "attained" age.
What are the 9 types of Whole Life Insurance Policies? -Answer-
"Ordinary (Straight) Life" " Limited Pay" " Single-Premiums Whole Life"
"Adjustable Whole Life" Universal Whole Life" Variable Whole Life"
"Variable/Universal Whole Life" "Interest Sensitive Whole Life" "
Equity-indexed Life
"Ordinary (Straight) Life"
(Fixed Premiums) -Answer-Permanent protection (matures at age
100) Guaranteed Tax deferred Interest rate on Cash Value. Cash
Value builds slowly for the first 3 years. Premiums are level, since the
company risks goes down as Cash Value goes up. If you die the
insurer keeps the Cash Value to offset their risks. Insureds has access
to Cash through Cash Surrender or a policy loan. "Rates are per unit
of protection" ($1,000 is 1 unit) C/V is guaranteed to be a certain
amount per $1,000 (in the future). C/V will equal F/A at policy maturity
(age 100).
,Limited Pay and Single premium Whole Life
(Fixed Premiums) -Answer-Limited Pay can also be as LP65 or 20pay
life 30 paylife, so don't get these confussed, they are the same thing.
Premium paying period is shorter. Still matures at age 100 (Not end of
premium paying period) Client pays same amount of money over a
shorter period of time. The shorter the premium paying period, the
higher the premium. C/v builds faster than Oridary WL.
A single-premium policy will have an Immediate C/V.
Limited-pay Whole Life -Answer-A 20 paylife will be paid up in 20
years
If purchased at age 30, paid up at age 50. The premium is paid up,
your still covered till the policy matures at age 100.
A life paid up at age 65, will be paid up at age 65 (LP65)
If purchased at age 30, paid up at age 65. The premium is paid up at
age 65, your still covered until policy matures at age 100.
Adjustable Whole life
( Flexible Premium) -Answer-Is a combination of Term and Whole Life!
Still cover you until you die or age 100 (matures) Insureds can adjust
Face Amount, Premiums or Term of Protection. Sold to Clients with
Fluctuating income ( real estate brokers) Coverage may not be
increased beyond the original amount without an physical.
Universal Whole Life
(Flexible Premiums) -Answer-Guaranteed "Minimum" Interest Rate.
Current interest rate which varies year to year. Has Extreme Flexibilty
regarding premiums payments.
Insured does not have to pay annual premium ( Cash Value may be
debited to pay cost of protection) "THIS WOULD NOT BE A LOAN"
Protection portion of policy is actually term insurance ( cost increases)
Target Premium based on projected earnings.
, Option A: Universal Life has a level death benefit (term)
Face Amount is made of term insurance
Option B: Universal Life will pay beneficiary both Face Amount PLUS
Cash Value.
Variable Whole Life
(Fixed Premiums) -Answer-Cash Value deposited into a "Separate
Account" (Like a mutual Fund) NO guaranteed rate of return or Cash
Value. It does have a "Minimum death beneft (Face Amount) is
guaranteed. Projections may be used as long as they are not
guaranteed.
Requires FINRA Series 6 or 7 license to sell!
FINRA ( Financial industry Regulatory Authority)
Variable/ Universal Whole Life
(Flexible Premium) -Answer-Combines best features of both Universal
and Variable whole life. Requires a FINRA series 6 or 7 securities
license to sell. Clients can self direct cash values into sub-accounts.
No guaranteed Interest Rate or Cash Value. Face Amount is term
insurance (option A)
Policy may pay out mopre upon death if (option B) is selected, Face
Amount plus Cash Value
Interest Sensitive Whole Life
(Flexible Premium) -Answer-General just another name for
UNIVERSAL LIFE (UL)
Current Interest rate that varies year to year
Has Guaranteed "Minimum" Interest Rate
A combination of Term and Interest bearing savings account.
Equity-Indexed Life
2026 NC Life Insurance State Exam
Latest Update 2026 Questions and
Correct Answers Rated A+
Term Insurance -Answer-Used for Temporary Situations. Net cost
highest in the long run. Premiums goes up every year based on
current (attained)age.
Term Insurance -Answer-Expire's at a certain age/Time in the future.
May be renewable up to a certain age or date with out a phyical Exam.
Level Term Insurance -Answer-Term insurance can be Renewed
annually. Has a level Face Amount at renewal, Premiums goes up.
Can be purchased for a Year or as often as 5, 10, 15, to 20 years
inclements with average premium. Premiums and Face Amounts are
"Level" for a period of "Time".
Decreasing Term Insurance -Answer-It is NOT Annual Renewable
term. Face Amount goes down, while Premiums remain the same.
Decreasing Term insurance is often used as a mortage redemption.
Can be converted to Whole Life, regardless of health. Premiums stays
the same. Costs increases as Face Amount decreases, by expiration
the Face Amount is Zero.
Increasing Term Insurance -Answer-Term is added as a rider to
Whole Life policies, at an extra cost. Face Amount goes up. It Allows
beneficiary to recieve Face Amount plus Premiums or Cash Value.
,Renewability -Answer-Most Term Is renewable up to a certain age
regardless of health. That can be renewed without proof of the
insureds insurability, up to a certain specified maximum age.
Convertibilty -Answer-Most are convertible to Whole Life policies
regardless of health. Conversions are based on current "attained" age.
NOT original age. Conversion may only be to a move expensive
policy, such as Whole Life.
Term insurance -Answer-You can not convert "Term to Term" You can
convert "Term to Whole Life" You can never convert to more coverage
than you have.
" If you want more insurance, you will have to pass a physical exam
and pay premiums upon your current "attained" age.
What are the 9 types of Whole Life Insurance Policies? -Answer-
"Ordinary (Straight) Life" " Limited Pay" " Single-Premiums Whole Life"
"Adjustable Whole Life" Universal Whole Life" Variable Whole Life"
"Variable/Universal Whole Life" "Interest Sensitive Whole Life" "
Equity-indexed Life
"Ordinary (Straight) Life"
(Fixed Premiums) -Answer-Permanent protection (matures at age
100) Guaranteed Tax deferred Interest rate on Cash Value. Cash
Value builds slowly for the first 3 years. Premiums are level, since the
company risks goes down as Cash Value goes up. If you die the
insurer keeps the Cash Value to offset their risks. Insureds has access
to Cash through Cash Surrender or a policy loan. "Rates are per unit
of protection" ($1,000 is 1 unit) C/V is guaranteed to be a certain
amount per $1,000 (in the future). C/V will equal F/A at policy maturity
(age 100).
,Limited Pay and Single premium Whole Life
(Fixed Premiums) -Answer-Limited Pay can also be as LP65 or 20pay
life 30 paylife, so don't get these confussed, they are the same thing.
Premium paying period is shorter. Still matures at age 100 (Not end of
premium paying period) Client pays same amount of money over a
shorter period of time. The shorter the premium paying period, the
higher the premium. C/v builds faster than Oridary WL.
A single-premium policy will have an Immediate C/V.
Limited-pay Whole Life -Answer-A 20 paylife will be paid up in 20
years
If purchased at age 30, paid up at age 50. The premium is paid up,
your still covered till the policy matures at age 100.
A life paid up at age 65, will be paid up at age 65 (LP65)
If purchased at age 30, paid up at age 65. The premium is paid up at
age 65, your still covered until policy matures at age 100.
Adjustable Whole life
( Flexible Premium) -Answer-Is a combination of Term and Whole Life!
Still cover you until you die or age 100 (matures) Insureds can adjust
Face Amount, Premiums or Term of Protection. Sold to Clients with
Fluctuating income ( real estate brokers) Coverage may not be
increased beyond the original amount without an physical.
Universal Whole Life
(Flexible Premiums) -Answer-Guaranteed "Minimum" Interest Rate.
Current interest rate which varies year to year. Has Extreme Flexibilty
regarding premiums payments.
Insured does not have to pay annual premium ( Cash Value may be
debited to pay cost of protection) "THIS WOULD NOT BE A LOAN"
Protection portion of policy is actually term insurance ( cost increases)
Target Premium based on projected earnings.
, Option A: Universal Life has a level death benefit (term)
Face Amount is made of term insurance
Option B: Universal Life will pay beneficiary both Face Amount PLUS
Cash Value.
Variable Whole Life
(Fixed Premiums) -Answer-Cash Value deposited into a "Separate
Account" (Like a mutual Fund) NO guaranteed rate of return or Cash
Value. It does have a "Minimum death beneft (Face Amount) is
guaranteed. Projections may be used as long as they are not
guaranteed.
Requires FINRA Series 6 or 7 license to sell!
FINRA ( Financial industry Regulatory Authority)
Variable/ Universal Whole Life
(Flexible Premium) -Answer-Combines best features of both Universal
and Variable whole life. Requires a FINRA series 6 or 7 securities
license to sell. Clients can self direct cash values into sub-accounts.
No guaranteed Interest Rate or Cash Value. Face Amount is term
insurance (option A)
Policy may pay out mopre upon death if (option B) is selected, Face
Amount plus Cash Value
Interest Sensitive Whole Life
(Flexible Premium) -Answer-General just another name for
UNIVERSAL LIFE (UL)
Current Interest rate that varies year to year
Has Guaranteed "Minimum" Interest Rate
A combination of Term and Interest bearing savings account.
Equity-Indexed Life
