North Carolina Life Insurance License Test 2025
Preparation Test Bank With 300 Questions and Correct
Detailed Answers for Actual Exam Practice| NC Life
Insurance Exam 2025-2026 Prep Test Bank (Latest)
A licensee who ceases to maintain residency in North Carolina is required to
deliver any insurance licenses to the Commissioner by mail or in person within
how many days after terminating residency?
a)10 days
b)21 days
c)30 days
d)90 days
c)30 days
Any licensee who ceases to maintain his residency in North Carolina shall deliver
his insurance license or licenses to the Commissioner by personal delivery or by
mail within 30 days after terminating residency.
Which of the following is TRUE regarding an indeterminate premium whole life
policy?
a) The premium is lower in the first year of the policy; then it is gradually raised
every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
d) The premium can be raised up to a guaranteed maximum rate.
d) The premium can be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to
year. After the initial period (usually 2-3 years) when a lower premium is paid, the
insurer establishes a new rate which could be raised up to the guaranteed maximum
stated in the policy, kept the same or lowered, based on the company's expected
mortality, expense and investments.
pg. 1
,A person who knowingly obtains information about an individual from an agent or
the insurer under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony.
a) Class 1 misdemeanor.
A person who knowingly obtains information about an individual from an insurer
or agent under false pretenses is guilty of a Class 1 misdemeanor.
Which option for Universal life allows the beneficiary to collect both the death
benefit and cash value upon the death of the insured?
a)Corridor option
b)Variable option
c)Option A
d)Option B
d)Option B
Under Option B the death benefit includes the annual increase in cash value so that
the death benefit gradually increases each year by the amount that the cash value
increases. At any point in time, the total death benefit will always be equal to the
face amount of the policy plus the current amount of cash value.
All of the following entities regulate variable life policies EXCEPT
a)The Guaranty Association.
b)Federal government.
c)The SEC.
d)The Insurance Department.
a)The Guaranty Association.
Variable life insurance is regulated by both the state and federal government, as
well as the Insurance Department, and the SEC
pg. 2
,All of the following are included within the Insurance Commissioner's duties
EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing
insurance law is not the Insurance Commissioner's responsibility, but enforcing the
law is.
c) Writing North Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but
enforcing the law is.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
d) Coverage is allowed up to age 75.
a) The rider is usually level term insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for a
limited amount of time, typically expiring at age 65. A spouse term rider (just like
any other insured rider) is usually level term insurance.
Twin brothers are starting a new business. They know it will take several years to
build the business to the point that they can pay off the debt incurred in starting the
business. What type of insurance would be the most affordable and still provide a
death benefit should one of them die?
a)Joint Life
b)Decreasing Term
c)Whole Life
d)Ordinary Life
a)Joint Life
pg. 3
, A Joint Life policy covering two lives would be the least expensive because the
premiums are based on an average age, and it would pay a death benefit only at the
first death.
A married couple owns a permanent policy which covers both of their lives and
pays the death benefit only upon the death of the first insured. Which policy is
that?
a)Second-to-Die
b)Family Income Policy
c)Joint Life Policy
d)Survivorship Life Policy
c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death
of the first insured, the policy ends.
The policyowner 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 only when the policy has developed a cash
value.
b)The death benefit can be increased only by exchanging the existing policy for a
new one.
c)The death benefit can be increased by providing evidence of insurability.
d)The death benefit cannot be increased.
c)The death benefit can be increased by providing evidence of insurability.
The policyowner (insured) would need to prove insurability for the amount of the
increase.
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)Level term
b)Term to specified age
pg. 4
Preparation Test Bank With 300 Questions and Correct
Detailed Answers for Actual Exam Practice| NC Life
Insurance Exam 2025-2026 Prep Test Bank (Latest)
A licensee who ceases to maintain residency in North Carolina is required to
deliver any insurance licenses to the Commissioner by mail or in person within
how many days after terminating residency?
a)10 days
b)21 days
c)30 days
d)90 days
c)30 days
Any licensee who ceases to maintain his residency in North Carolina shall deliver
his insurance license or licenses to the Commissioner by personal delivery or by
mail within 30 days after terminating residency.
Which of the following is TRUE regarding an indeterminate premium whole life
policy?
a) The premium is lower in the first year of the policy; then it is gradually raised
every year.
b) The premium is level throughout the life of the policy.
c) The premium is usually higher in the first few years of the policy.
d) The premium can be raised up to a guaranteed maximum rate.
d) The premium can be raised up to a guaranteed maximum rate.
Indeterminate premium whole life policy premium rate may vary from year to
year. After the initial period (usually 2-3 years) when a lower premium is paid, the
insurer establishes a new rate which could be raised up to the guaranteed maximum
stated in the policy, kept the same or lowered, based on the company's expected
mortality, expense and investments.
pg. 1
,A person who knowingly obtains information about an individual from an agent or
the insurer under false pretenses has committed a(n)
a)Class 1 misdemeanor.
b)Trustworthy act.
c)Unfair trade practice.
d)Felony.
a) Class 1 misdemeanor.
A person who knowingly obtains information about an individual from an insurer
or agent under false pretenses is guilty of a Class 1 misdemeanor.
Which option for Universal life allows the beneficiary to collect both the death
benefit and cash value upon the death of the insured?
a)Corridor option
b)Variable option
c)Option A
d)Option B
d)Option B
Under Option B the death benefit includes the annual increase in cash value so that
the death benefit gradually increases each year by the amount that the cash value
increases. At any point in time, the total death benefit will always be equal to the
face amount of the policy plus the current amount of cash value.
All of the following entities regulate variable life policies EXCEPT
a)The Guaranty Association.
b)Federal government.
c)The SEC.
d)The Insurance Department.
a)The Guaranty Association.
Variable life insurance is regulated by both the state and federal government, as
well as the Insurance Department, and the SEC
pg. 2
,All of the following are included within the Insurance Commissioner's duties
EXCEPT
a) Conducting investigation of all domestic insurers.
b) Reviewing the insurers' annual reports.
c) Writing North Carolina insurance laws.
d) Reporting any violations of insurance laws to the Attorney General. Writing
insurance law is not the Insurance Commissioner's responsibility, but enforcing the
law is.
c) Writing North Carolina insurance laws.
Writing insurance law is not the Insurance Commissioner's responsibility, but
enforcing the law is.
Which is true about a spouse term rider?
a) The rider is usually level term insurance.
b) Coverage is allowed for an unlimited time.
c) The rider is decreasing term insurance.
d) Coverage is allowed up to age 75.
a) The rider is usually level term insurance.
The spouse term rider allows a spouse to be added for coverage. It is available for a
limited amount of time, typically expiring at age 65. A spouse term rider (just like
any other insured rider) is usually level term insurance.
Twin brothers are starting a new business. They know it will take several years to
build the business to the point that they can pay off the debt incurred in starting the
business. What type of insurance would be the most affordable and still provide a
death benefit should one of them die?
a)Joint Life
b)Decreasing Term
c)Whole Life
d)Ordinary Life
a)Joint Life
pg. 3
, A Joint Life policy covering two lives would be the least expensive because the
premiums are based on an average age, and it would pay a death benefit only at the
first death.
A married couple owns a permanent policy which covers both of their lives and
pays the death benefit only upon the death of the first insured. Which policy is
that?
a)Second-to-Die
b)Family Income Policy
c)Joint Life Policy
d)Survivorship Life Policy
c)Joint Life Policy
Joint life policies cover the lives of two insureds; rates are blended. Upon the death
of the first insured, the policy ends.
The policyowner 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 only when the policy has developed a cash
value.
b)The death benefit can be increased only by exchanging the existing policy for a
new one.
c)The death benefit can be increased by providing evidence of insurability.
d)The death benefit cannot be increased.
c)The death benefit can be increased by providing evidence of insurability.
The policyowner (insured) would need to prove insurability for the amount of the
increase.
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)Level term
b)Term to specified age
pg. 4
