SOUTH CAROLINA INSURANCE PRACTICE EXAMS
2025/2026 QUESTIONS WITH ANSWERS RATED A+
✔✔What historical changes occurred to Section 38-65-40? - ✔✔It was formerly Section
38-65-40 in the 1976 Code, recodified as Section 38-41-60 by the 1987 Act No. 155.
✔✔What does Section 38-65-40 say about the payment of premiums for group life
insurance? - ✔✔Premiums for basic and supplemental coverage must be paid by the
policyholder from their funds or from funds contributed by the insured persons or both.
✔✔What is the significance of the term 'common group' in the context of group life
insurance policies? - ✔✔A 'common group' refers to a group formed for purposes other
than obtaining insurance, which can be covered under a group life insurance policy.
✔✔What does Section 38-65-30 allow regarding the assignment of rights? - ✔✔It allows
the insured to assign their rights and benefits under the policy to another party, treating
the assignee as the owner of the rights conferred.
✔✔What is the implication of the phrase 'precluding individual selection' in Section 38-
65-40? - ✔✔It means that the amounts of life insurance must be based on a plan that
does not allow individuals to select their coverage amounts individually.
✔✔What is the legislative history of the code sections mentioned in the notes? - ✔✔The
sections were recodified by the 1987 Act No. 155, with previous versions existing in the
1976 Code.
✔✔What is the minimum group size mentioned in Section 38-65-40 for not requiring
evidence of insurability? - ✔✔The minimum group size is twenty-five persons.
✔✔What is the purpose of the assignment of rights and benefits under group insurance
policies? - ✔✔To enable insured individuals to transfer their rights and benefits to
another party, enhancing flexibility in managing their insurance.
✔✔What does the term 'mass-marketed life insurance' refer to in Section 38-65-50? -
✔✔It refers to life insurance policies that are marketed to a large number of individuals,
often with standardized terms.
✔✔What is the significance of the 1988 Act No. 374 in relation to Section 38-65-30? -
✔✔It indicates further legislative action that may have impacted the provisions of
Section 38-65-30.
,✔✔What are the types of insurance that may be issued to persons outside a common
group according to Section 38-65-40? - ✔✔Group certificates of credit life insurance
may be issued to persons other than those in a common group.
✔✔What does Section 38-65-40 state about supplemental coverage? -
✔✔Supplemental coverage may be available to persons insured under the policy, even
if the basic coverage does not allow for individual selection.
✔✔What does the term 'trusteed groups' refer to in the context of Section 38-65-40? -
✔✔Trusteed groups refer to groups that are managed by a trustee for the purpose of
insurance coverage, where the group size is assessed on a participating unit basis.
✔✔What is the historical context of the 1976 Code Section 38-65-20? - ✔✔It was
recodified as Section 38-41-20 by the 1987 Act No. 155, indicating legislative changes
in the insurance code.
✔✔What is meant by 'mass-marketed life insurance' in this context? - ✔✔Coverage
under any group policy of life insurance offered through direct response solicitation,
excluding certain employee or union member coverage.
✔✔What types of coverage are excluded from mass-marketed life insurance? -
✔✔Coverage offered to employees or union members through their employer, members
of professional associations, or members of national associations of retired persons or
war veterans.
✔✔What is 'direct response solicitation' in the context of life insurance? - ✔✔An offer by
an insurer to individuals allowing them to apply or enroll for life insurance based on that
offer.
✔✔What are the requirements for extending life insurance coverage to residents under
a policy issued outside the state? - ✔✔The policy must provide provisions similar to
Section 38-65-210 unless deemed inappropriate by the director.
✔✔What must insurers comply with when extending life insurance under a group policy
issued outside the state? - ✔✔They must comply with state requirements related to
advertising and claims settlement practices.
✔✔What must be done with copies of policies and certificates under a group life
insurance issued outside the state? - ✔✔They must be made available on an
informational basis upon request from the director or his designee.
, ✔✔What is required for mass-marketed life insurance policies before they can be sold
to residents of the state? - ✔✔They must have the approval of the director or his
designee pursuant to Section 38-61-20.
✔✔What does Section 38-65-70 state about coverage for families of employees and
members? - ✔✔Policies may insure employees or members against loss due to the
death of their spouses and children under certain conditions.
✔✔What are the age limits for children to be covered under the insurance policies
mentioned? - ✔✔Children under the age of nineteen or full-time students under twenty-
five years of age.
✔✔Under what condition can a child older than nineteen be covered under the
insurance policy? - ✔✔If the child is incapable of self-sustaining employment due to
intellectual disability or physical handicap and is chiefly dependent on the employee for
support.
✔✔Who is responsible for paying the premium for the insurance coverage? - ✔✔The
premium must be paid by the policyholder from their funds or from funds contributed by
the insured persons, or both.
✔✔What happens to the life insurance of a family member upon the termination of an
employee's coverage? - ✔✔The spouse or child is entitled to an individual policy without
evidence of insurability if application is made and the first premium is paid within thirty-
one days after termination.
✔✔What conditions allow a spouse to obtain an individual life insurance policy after an
employee's group policy is terminated? - ✔✔The spouse is entitled to an individual
policy under Section 38-65-210(9) if the employee is also entitled, subject to the same
conditions.
✔✔What happens if a spouse dies during the period they would have been entitled to
an individual policy? - ✔✔The amount of life insurance they would have been entitled to
is payable as a claim under the group policy.
✔✔What is the maximum amount of life insurance proceeds that are free from the
claims of the insured's creditors? - ✔✔The proceeds and cash surrender value of life
insurance must not exceed fifty thousand dollars.
✔✔Under what conditions can creditors claim the cash surrender value or proceeds of a
life insurance policy? - ✔✔Creditors can claim if the policy was obtained with intent to
defraud creditors or if they possess a valid assignment of the cash surrender value.
2025/2026 QUESTIONS WITH ANSWERS RATED A+
✔✔What historical changes occurred to Section 38-65-40? - ✔✔It was formerly Section
38-65-40 in the 1976 Code, recodified as Section 38-41-60 by the 1987 Act No. 155.
✔✔What does Section 38-65-40 say about the payment of premiums for group life
insurance? - ✔✔Premiums for basic and supplemental coverage must be paid by the
policyholder from their funds or from funds contributed by the insured persons or both.
✔✔What is the significance of the term 'common group' in the context of group life
insurance policies? - ✔✔A 'common group' refers to a group formed for purposes other
than obtaining insurance, which can be covered under a group life insurance policy.
✔✔What does Section 38-65-30 allow regarding the assignment of rights? - ✔✔It allows
the insured to assign their rights and benefits under the policy to another party, treating
the assignee as the owner of the rights conferred.
✔✔What is the implication of the phrase 'precluding individual selection' in Section 38-
65-40? - ✔✔It means that the amounts of life insurance must be based on a plan that
does not allow individuals to select their coverage amounts individually.
✔✔What is the legislative history of the code sections mentioned in the notes? - ✔✔The
sections were recodified by the 1987 Act No. 155, with previous versions existing in the
1976 Code.
✔✔What is the minimum group size mentioned in Section 38-65-40 for not requiring
evidence of insurability? - ✔✔The minimum group size is twenty-five persons.
✔✔What is the purpose of the assignment of rights and benefits under group insurance
policies? - ✔✔To enable insured individuals to transfer their rights and benefits to
another party, enhancing flexibility in managing their insurance.
✔✔What does the term 'mass-marketed life insurance' refer to in Section 38-65-50? -
✔✔It refers to life insurance policies that are marketed to a large number of individuals,
often with standardized terms.
✔✔What is the significance of the 1988 Act No. 374 in relation to Section 38-65-30? -
✔✔It indicates further legislative action that may have impacted the provisions of
Section 38-65-30.
,✔✔What are the types of insurance that may be issued to persons outside a common
group according to Section 38-65-40? - ✔✔Group certificates of credit life insurance
may be issued to persons other than those in a common group.
✔✔What does Section 38-65-40 state about supplemental coverage? -
✔✔Supplemental coverage may be available to persons insured under the policy, even
if the basic coverage does not allow for individual selection.
✔✔What does the term 'trusteed groups' refer to in the context of Section 38-65-40? -
✔✔Trusteed groups refer to groups that are managed by a trustee for the purpose of
insurance coverage, where the group size is assessed on a participating unit basis.
✔✔What is the historical context of the 1976 Code Section 38-65-20? - ✔✔It was
recodified as Section 38-41-20 by the 1987 Act No. 155, indicating legislative changes
in the insurance code.
✔✔What is meant by 'mass-marketed life insurance' in this context? - ✔✔Coverage
under any group policy of life insurance offered through direct response solicitation,
excluding certain employee or union member coverage.
✔✔What types of coverage are excluded from mass-marketed life insurance? -
✔✔Coverage offered to employees or union members through their employer, members
of professional associations, or members of national associations of retired persons or
war veterans.
✔✔What is 'direct response solicitation' in the context of life insurance? - ✔✔An offer by
an insurer to individuals allowing them to apply or enroll for life insurance based on that
offer.
✔✔What are the requirements for extending life insurance coverage to residents under
a policy issued outside the state? - ✔✔The policy must provide provisions similar to
Section 38-65-210 unless deemed inappropriate by the director.
✔✔What must insurers comply with when extending life insurance under a group policy
issued outside the state? - ✔✔They must comply with state requirements related to
advertising and claims settlement practices.
✔✔What must be done with copies of policies and certificates under a group life
insurance issued outside the state? - ✔✔They must be made available on an
informational basis upon request from the director or his designee.
, ✔✔What is required for mass-marketed life insurance policies before they can be sold
to residents of the state? - ✔✔They must have the approval of the director or his
designee pursuant to Section 38-61-20.
✔✔What does Section 38-65-70 state about coverage for families of employees and
members? - ✔✔Policies may insure employees or members against loss due to the
death of their spouses and children under certain conditions.
✔✔What are the age limits for children to be covered under the insurance policies
mentioned? - ✔✔Children under the age of nineteen or full-time students under twenty-
five years of age.
✔✔Under what condition can a child older than nineteen be covered under the
insurance policy? - ✔✔If the child is incapable of self-sustaining employment due to
intellectual disability or physical handicap and is chiefly dependent on the employee for
support.
✔✔Who is responsible for paying the premium for the insurance coverage? - ✔✔The
premium must be paid by the policyholder from their funds or from funds contributed by
the insured persons, or both.
✔✔What happens to the life insurance of a family member upon the termination of an
employee's coverage? - ✔✔The spouse or child is entitled to an individual policy without
evidence of insurability if application is made and the first premium is paid within thirty-
one days after termination.
✔✔What conditions allow a spouse to obtain an individual life insurance policy after an
employee's group policy is terminated? - ✔✔The spouse is entitled to an individual
policy under Section 38-65-210(9) if the employee is also entitled, subject to the same
conditions.
✔✔What happens if a spouse dies during the period they would have been entitled to
an individual policy? - ✔✔The amount of life insurance they would have been entitled to
is payable as a claim under the group policy.
✔✔What is the maximum amount of life insurance proceeds that are free from the
claims of the insured's creditors? - ✔✔The proceeds and cash surrender value of life
insurance must not exceed fifty thousand dollars.
✔✔Under what conditions can creditors claim the cash surrender value or proceeds of a
life insurance policy? - ✔✔Creditors can claim if the policy was obtained with intent to
defraud creditors or if they possess a valid assignment of the cash surrender value.
