1|Page
NC Life Insurance Practice Exam | COMPLETE
QUESTIONS AND ANSWERS | 2025 LATEST
UPDATED | ALREADY GRADED A+
_____ of personal life insurance premiums is usually deductible
for federal income tax purposes. - . . ANSWER ✓✓ 0%
A ______ annuity pays benefits based on units rather than the
state of dollar amounts - . . ANSWER ✓✓ Variable
A 45-year-old woman won $100,000 in a scratch off lottery
ticket. She purchased an annuity that will pay her $1500 per
month beginning at age 60 which of these annuities did this
woman purchase? - . . ANSWER ✓✓ Deferred fixed annuity
A company that owns a life insurance policy on one of its key
employees may do all of the following except - . . ANSWER ✓✓
Change the policy's interest rate
A contract owner terminates an annuity before the income
payment begins then the owner will then receive - . . ANSWER
✓✓ the current contract surrender value
,2|Page
A domestic insurance company in North Carolina must - . .
ANSWER ✓✓ Be organized under North Carolina insurance laws
A French insurance company conducting business in North
Carolina would be known in North Carolina - . . ANSWER ✓✓
Alien company
A key employee policy is taken out by X on its vice president 10
years later, this employee leaves company X and begins working
for company Y. If this individual were to die and the policy is still
enforced and unchanged, where would the death proceeds be
directed? - . . ANSWER ✓✓ Company X
A level premium indicates - . . ANSWER ✓✓ the premium is fixed
for the entire duration of the contract
A life insurance application must be signed by all of these except
- . . ANSWER ✓✓ beneficiary
A life insurance contract may not be voided by the insurance
company beginning ____ years after the policy's issue date - . .
ANSWER ✓✓ 2
,3|Page
A life policy was a death benefit and cash value that can fluctuate
according to the performance of its underlying investment
portfolio is referred to as - . . ANSWER ✓✓ variable life
A long-term care rider is in a life insurance policy, pays a daily
benefit in the event of which of the following? - . . ANSWER ✓✓
inability of the insurer to perform more than two activities of
daily living (ADL's)
A non-forfeiture clause gives the policy owner - . . ANSWER ✓✓
guaranteed values even if the policy has lapsed
A noncontributory group term life is characterized by - . .
ANSWER ✓✓ the entire cost of the plan is paid for by the
employer
A policy loan is made possible by which of these life insurance
policy features? - . . ANSWER ✓✓ Cash value provision
A policy owner may generate taxable income from which of the
following dividend options - . . ANSWER ✓✓ Accumulation at
interest
A policy owner's rights are limited under which beneficiary
designation? - . . ANSWER ✓✓ irrevocable
, 4|Page
A policy that becomes a Modified Endowment Contract (MEC) - . .
ANSWER ✓✓ will lose many of its tax advantages
A potential client, age, 40, would like to purchase a whole life
policy that will accumulate cash value at a faster rate in the
earlier years of the policy. Which of these statements may by the
producer would be correct? - . . ANSWER ✓✓ 20 pay life
accumulates cash value faster than straight life
A qualified profit-sharing plan is designed to - . . ANSWER ✓✓
allow employees to participate in the profits of the company
A resident agent who moves out of the state of North Carolina
has ____ business days to notify the commissioner of insurance
of the address change - . . ANSWER ✓✓ 10 days
A retirement plan that set aside part of the companies net
income for distributions to qualified employees is called - . .
ANSWER ✓✓ Profit sharing plan
A return of premium life insurance policy is - . . ANSWER ✓✓
Whole life and Increasing term
NC Life Insurance Practice Exam | COMPLETE
QUESTIONS AND ANSWERS | 2025 LATEST
UPDATED | ALREADY GRADED A+
_____ of personal life insurance premiums is usually deductible
for federal income tax purposes. - . . ANSWER ✓✓ 0%
A ______ annuity pays benefits based on units rather than the
state of dollar amounts - . . ANSWER ✓✓ Variable
A 45-year-old woman won $100,000 in a scratch off lottery
ticket. She purchased an annuity that will pay her $1500 per
month beginning at age 60 which of these annuities did this
woman purchase? - . . ANSWER ✓✓ Deferred fixed annuity
A company that owns a life insurance policy on one of its key
employees may do all of the following except - . . ANSWER ✓✓
Change the policy's interest rate
A contract owner terminates an annuity before the income
payment begins then the owner will then receive - . . ANSWER
✓✓ the current contract surrender value
,2|Page
A domestic insurance company in North Carolina must - . .
ANSWER ✓✓ Be organized under North Carolina insurance laws
A French insurance company conducting business in North
Carolina would be known in North Carolina - . . ANSWER ✓✓
Alien company
A key employee policy is taken out by X on its vice president 10
years later, this employee leaves company X and begins working
for company Y. If this individual were to die and the policy is still
enforced and unchanged, where would the death proceeds be
directed? - . . ANSWER ✓✓ Company X
A level premium indicates - . . ANSWER ✓✓ the premium is fixed
for the entire duration of the contract
A life insurance application must be signed by all of these except
- . . ANSWER ✓✓ beneficiary
A life insurance contract may not be voided by the insurance
company beginning ____ years after the policy's issue date - . .
ANSWER ✓✓ 2
,3|Page
A life policy was a death benefit and cash value that can fluctuate
according to the performance of its underlying investment
portfolio is referred to as - . . ANSWER ✓✓ variable life
A long-term care rider is in a life insurance policy, pays a daily
benefit in the event of which of the following? - . . ANSWER ✓✓
inability of the insurer to perform more than two activities of
daily living (ADL's)
A non-forfeiture clause gives the policy owner - . . ANSWER ✓✓
guaranteed values even if the policy has lapsed
A noncontributory group term life is characterized by - . .
ANSWER ✓✓ the entire cost of the plan is paid for by the
employer
A policy loan is made possible by which of these life insurance
policy features? - . . ANSWER ✓✓ Cash value provision
A policy owner may generate taxable income from which of the
following dividend options - . . ANSWER ✓✓ Accumulation at
interest
A policy owner's rights are limited under which beneficiary
designation? - . . ANSWER ✓✓ irrevocable
, 4|Page
A policy that becomes a Modified Endowment Contract (MEC) - . .
ANSWER ✓✓ will lose many of its tax advantages
A potential client, age, 40, would like to purchase a whole life
policy that will accumulate cash value at a faster rate in the
earlier years of the policy. Which of these statements may by the
producer would be correct? - . . ANSWER ✓✓ 20 pay life
accumulates cash value faster than straight life
A qualified profit-sharing plan is designed to - . . ANSWER ✓✓
allow employees to participate in the profits of the company
A resident agent who moves out of the state of North Carolina
has ____ business days to notify the commissioner of insurance
of the address change - . . ANSWER ✓✓ 10 days
A retirement plan that set aside part of the companies net
income for distributions to qualified employees is called - . .
ANSWER ✓✓ Profit sharing plan
A return of premium life insurance policy is - . . ANSWER ✓✓
Whole life and Increasing term
