NC LIFE INSURANCE STATE EXAM STUDY
GUIDELINE QUESTIONS AND CORRECT
VERIFIED ANSWERS/ ALREADY GRADED A+
Term Insurance - CORRECT ANSWER ✔✔- Used for Temporary Situations. Net
cost highest in the long run. Premiums goes up every year based on current
(attained)age.
Term Insurance - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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.
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,Renewability - CORRECT 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 - CORRECT 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 - CORRECT 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? - CORRECT 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) - CORRECT 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
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, (Fixed Premiums) - CORRECT 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 - CORRECT 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) - CORRECT 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) - CORRECT 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)
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GUIDELINE QUESTIONS AND CORRECT
VERIFIED ANSWERS/ ALREADY GRADED A+
Term Insurance - CORRECT ANSWER ✔✔- Used for Temporary Situations. Net
cost highest in the long run. Premiums goes up every year based on current
(attained)age.
Term Insurance - CORRECT 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 - CORRECT 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 - CORRECT 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 - CORRECT 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.
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,Renewability - CORRECT 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 - CORRECT 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 - CORRECT 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? - CORRECT 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) - CORRECT 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
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, (Fixed Premiums) - CORRECT 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 - CORRECT 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) - CORRECT 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) - CORRECT 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)
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