NC Life insurance state exam study
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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.
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
(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)
Target Premium based on projected earnings.
Option A: Universal Life has a level death benefit (term)
Face Amount is made of term insurance
, Option B: Universal Life will pay beneficiary both Face Amount PLUS Cash Value.
Variable Whole Life
(Fixed Premiums) -CORRECT ANSWER Cash Value deposited into a "Separate
Account" (Like a mutual Fund) NO guaranteed rate of return or Cash Value. It does
have a "Minimum death beneft (Face Amount) is guaranteed. Projections may be used
as long as they are not guaranteed.
Requires FINRA Series 6 or 7 license to sell!
FINRA ( Financial industry Regulatory Authority)
Variable/ Universal Whole Life
(Flexible Premium) -CORRECT ANSWER Combines best features of both Universal
and Variable whole life. Requires a FINRA series 6 or 7 securities license to sell. Clients
can self direct cash values into sub-accounts.
No guaranteed Interest Rate or Cash Value. Face Amount is term insurance (option A)
Policy may pay out mopre upon death if (option B) is selected, Face Amount plus Cash
Value
Interest Sensitive Whole Life
(Flexible Premium) -CORRECT ANSWER General just another name for UNIVERSAL
LIFE (UL)
Current Interest rate that varies year to year
Has Guaranteed "Minimum" Interest Rate
A combination of Term and Interest bearing savings account.
Equity-Indexed Life
(Fixed Premium) -CORRECT ANSWER A type of Cash Value Life insurance, where the
Minimum death benefit is Guaranteed, as well as the Minimum earning on the Cash
Value in the General Account.
Not classified as securities, Securities license is NOT required.
Cash Value accumulation is usually linked to an Index S&P 500.
Index outperforms the guaranteed interest rate, the difference is credited to the Cash
Value as per the insurance contract.
Which Whole life Insurance policies have a level or Flexible premium? -CORRECT
ANSWER >ordinary whole life
>Limited-pay whole life
>Single-premium whole life
>Variable whole life
>Equity-indexed whole life
Fixed premium? -CORRECT ANSWER Term policies have a fixed premium for the
term. Can be for a year or more depending on the policy purchased.
Which life insurance policies has a Flexible premium? -CORRECT ANSWER
>Adjustable whole life
guide||Latest Exam Upload With
Most Examinable Questions And
Well Verified Correct
Answers||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.
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
(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)
Target Premium based on projected earnings.
Option A: Universal Life has a level death benefit (term)
Face Amount is made of term insurance
, Option B: Universal Life will pay beneficiary both Face Amount PLUS Cash Value.
Variable Whole Life
(Fixed Premiums) -CORRECT ANSWER Cash Value deposited into a "Separate
Account" (Like a mutual Fund) NO guaranteed rate of return or Cash Value. It does
have a "Minimum death beneft (Face Amount) is guaranteed. Projections may be used
as long as they are not guaranteed.
Requires FINRA Series 6 or 7 license to sell!
FINRA ( Financial industry Regulatory Authority)
Variable/ Universal Whole Life
(Flexible Premium) -CORRECT ANSWER Combines best features of both Universal
and Variable whole life. Requires a FINRA series 6 or 7 securities license to sell. Clients
can self direct cash values into sub-accounts.
No guaranteed Interest Rate or Cash Value. Face Amount is term insurance (option A)
Policy may pay out mopre upon death if (option B) is selected, Face Amount plus Cash
Value
Interest Sensitive Whole Life
(Flexible Premium) -CORRECT ANSWER General just another name for UNIVERSAL
LIFE (UL)
Current Interest rate that varies year to year
Has Guaranteed "Minimum" Interest Rate
A combination of Term and Interest bearing savings account.
Equity-Indexed Life
(Fixed Premium) -CORRECT ANSWER A type of Cash Value Life insurance, where the
Minimum death benefit is Guaranteed, as well as the Minimum earning on the Cash
Value in the General Account.
Not classified as securities, Securities license is NOT required.
Cash Value accumulation is usually linked to an Index S&P 500.
Index outperforms the guaranteed interest rate, the difference is credited to the Cash
Value as per the insurance contract.
Which Whole life Insurance policies have a level or Flexible premium? -CORRECT
ANSWER >ordinary whole life
>Limited-pay whole life
>Single-premium whole life
>Variable whole life
>Equity-indexed whole life
Fixed premium? -CORRECT ANSWER Term policies have a fixed premium for the
term. Can be for a year or more depending on the policy purchased.
Which life insurance policies has a Flexible premium? -CORRECT ANSWER
>Adjustable whole life
