NC Life Insurance Actual Exam Study
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1. On a reinstated health policy when no new application is requested, how
long after the policy's reinstatement will coverage for accidents become
effective? - ANSWER Immediately
2. T/F: Proceeds of a life insurance policy paid as a lump sum death benefit are
exempt from federal income tax. - ANSWER True
3. The type of annuity that provides a guaranteed rate of return is called a
______________ annuity. - ANSWER Fixed
4. T/F: "Partnerships" usually are made up of two or more owners who
contribute and share profits. - ANSWER True
5. A Salary Continuation Plan is set up between the employer and employees
and is funded by: - ANSWER The Employer
6. According to N.C. law, all group life policies must contain a conversion
provision which allows the covered individual _______ to convert the group
coverage to an individual plan without evidence of insurability if their
employment is terminated. - ANSWER 31 days
,7. T/F: SIMPLE plans can be structured as an IRA or a 401(k). - ANSWER
True
8. Equity indexed annuities are a form of: - ANSWER Fixed Rate Annuity
9. Assessment Mutual Insurers, Reinsurers, and Home Service Insurers are all
examples of what type of insurer? - ANSWER Private Insurers
10.T/F: The key factor behind ERISA's development was to encourage
employers to establish employee health plans allowing them to self-insure. -
ANSWER True
11.What type of life insurance refers to temporary coverage of a specific hazard
for a specific group? - ANSWER Blanket Insurance Policies
12.Which organization regulates the separate account in variable annuities? -
ANSWER The SEC
13.According to the Social Security Department, the inability to engage in any
substantial gainful work is known as: - ANSWER Disability
14.A __________ plan is a qualified plan that allows unincorporated business
owners to participate in a retirement plan as an employee. - ANSWER
Keogh
15.T/F: "Replacement" means a transaction in which a new policy is purchased
by a person who has never had insurance before. - ANSWER False
,16.Which answer best completes the following sentence? "In the insurance
business, risk can best be defined as ___________________________." -
ANSWER Uncertainty regarding financial loss
17.The face value on industrial insurance policies is usually ___________ than
most. - ANSWER smaller
18.T/F: If an insurance policy contains an incontestable clause, it means that the
insurer CANNOT contest any claim under any circumstances. - ANSWER
False
19.______________ authority is established through verbalization and occurs
when appropriate actions are taken to carry out the authority granted to
fulfill the principal's goals. - ANSWER Implied
20.The appearance of power on behalf of the insurer through the actions or use
of identifying materials by the agent, such as company advertising material,
is called _____________ authority. - ANSWER Apparent
21.____________ authority spells out in contract form the activities that the
agent has the power to perform on behalf of the insurer? - ANSWER
Express
22.Purchasers of life insurance policies are _____________, but are not
necessarily _______________. - ANSWER policy owners; policyholders
23.T/F: Since a mutual insurance company has no stockholders, it cannot be
considered a corporation. - ANSWER False
24.T/F: Proceeds of a life insurance policy paid as a lump sum death benefit are
exempt from federal income tax. - ANSWER True
, 25._____________ health plans are sometimes called "wholesale plans" and
provide health insurance coverage to members of an association or
professional society. - ANSWER Franchise
26.A life insurance policy under which the amount a policy owner pays in
during the first years exceeds the sum of net level premiums that would have
been payable to provide paid-up future benefits in seven years is called: -
ANSWER A Modified Endowment (MEC) contract.
27.The type of annuity that provides a guaranteed rate of return is called a
______________ annuity. - ANSWER Fixed
28.T/F: "Partnerships" usually are made up of two or more owners who
contribute and share profits. - ANSWER True
29.What are the two features that have the greatest effect on the amount of
additional interest that may be credited to an equity-indexed annuity? -
ANSWER The Indexing Method and the Participation Rate
30.A Salary Continuation Plan is set up between the employer and employees
and is funded by - ANSWER The Employer
31.T/F: Most adjustable life policies are more expensive than conventional term
policies or whole life policies. - ANSWER True
32.The exclusion ratio is always considered 100% in _________ annuities. -
ANSWER Variable
Questions with 100% Correct Answers
Already Graded A+ | Brand New
Version
1. On a reinstated health policy when no new application is requested, how
long after the policy's reinstatement will coverage for accidents become
effective? - ANSWER Immediately
2. T/F: Proceeds of a life insurance policy paid as a lump sum death benefit are
exempt from federal income tax. - ANSWER True
3. The type of annuity that provides a guaranteed rate of return is called a
______________ annuity. - ANSWER Fixed
4. T/F: "Partnerships" usually are made up of two or more owners who
contribute and share profits. - ANSWER True
5. A Salary Continuation Plan is set up between the employer and employees
and is funded by: - ANSWER The Employer
6. According to N.C. law, all group life policies must contain a conversion
provision which allows the covered individual _______ to convert the group
coverage to an individual plan without evidence of insurability if their
employment is terminated. - ANSWER 31 days
,7. T/F: SIMPLE plans can be structured as an IRA or a 401(k). - ANSWER
True
8. Equity indexed annuities are a form of: - ANSWER Fixed Rate Annuity
9. Assessment Mutual Insurers, Reinsurers, and Home Service Insurers are all
examples of what type of insurer? - ANSWER Private Insurers
10.T/F: The key factor behind ERISA's development was to encourage
employers to establish employee health plans allowing them to self-insure. -
ANSWER True
11.What type of life insurance refers to temporary coverage of a specific hazard
for a specific group? - ANSWER Blanket Insurance Policies
12.Which organization regulates the separate account in variable annuities? -
ANSWER The SEC
13.According to the Social Security Department, the inability to engage in any
substantial gainful work is known as: - ANSWER Disability
14.A __________ plan is a qualified plan that allows unincorporated business
owners to participate in a retirement plan as an employee. - ANSWER
Keogh
15.T/F: "Replacement" means a transaction in which a new policy is purchased
by a person who has never had insurance before. - ANSWER False
,16.Which answer best completes the following sentence? "In the insurance
business, risk can best be defined as ___________________________." -
ANSWER Uncertainty regarding financial loss
17.The face value on industrial insurance policies is usually ___________ than
most. - ANSWER smaller
18.T/F: If an insurance policy contains an incontestable clause, it means that the
insurer CANNOT contest any claim under any circumstances. - ANSWER
False
19.______________ authority is established through verbalization and occurs
when appropriate actions are taken to carry out the authority granted to
fulfill the principal's goals. - ANSWER Implied
20.The appearance of power on behalf of the insurer through the actions or use
of identifying materials by the agent, such as company advertising material,
is called _____________ authority. - ANSWER Apparent
21.____________ authority spells out in contract form the activities that the
agent has the power to perform on behalf of the insurer? - ANSWER
Express
22.Purchasers of life insurance policies are _____________, but are not
necessarily _______________. - ANSWER policy owners; policyholders
23.T/F: Since a mutual insurance company has no stockholders, it cannot be
considered a corporation. - ANSWER False
24.T/F: Proceeds of a life insurance policy paid as a lump sum death benefit are
exempt from federal income tax. - ANSWER True
, 25._____________ health plans are sometimes called "wholesale plans" and
provide health insurance coverage to members of an association or
professional society. - ANSWER Franchise
26.A life insurance policy under which the amount a policy owner pays in
during the first years exceeds the sum of net level premiums that would have
been payable to provide paid-up future benefits in seven years is called: -
ANSWER A Modified Endowment (MEC) contract.
27.The type of annuity that provides a guaranteed rate of return is called a
______________ annuity. - ANSWER Fixed
28.T/F: "Partnerships" usually are made up of two or more owners who
contribute and share profits. - ANSWER True
29.What are the two features that have the greatest effect on the amount of
additional interest that may be credited to an equity-indexed annuity? -
ANSWER The Indexing Method and the Participation Rate
30.A Salary Continuation Plan is set up between the employer and employees
and is funded by - ANSWER The Employer
31.T/F: Most adjustable life policies are more expensive than conventional term
policies or whole life policies. - ANSWER True
32.The exclusion ratio is always considered 100% in _________ annuities. -
ANSWER Variable
