NC Life Insurance Exam Study Guide with Complete Solutions Latest Updated 2024/2025 Fraternal Benefit Society - Correct Answer An organization of people who share a month ethnic, religious or vocational affiliation. They are entities they have no capital stock, have a representative form of government. They exist not for profit but solely for the benefit of their members and their beneficiaries and operate on a lodge system.Fraternal Benefit Societies - Correct Answer Agents of these societies must comply with the SAME general laws governing licensing that apply to resident and nonresident agents.Graded Premium Whole Life - Correct Answer Has premiums they start very low then increase annually for a long period and stay level for the rest of the life of the policy.Death Benefit Option 1 of a universal life policy - Correct Answer the benefit payable when the insured dies stays level and equal to the initial specified amount.Death Benefit Option 2 of a universal life policy - Correct Answer this benefit is generally increasing. This benefit equals the policy's specified amount plus the cash value.Variable Universal Life insurance - Correct Answer Combines the features of universal life insurane with the ability to allocate premiums to a seperate account. THIS MEANS the growth of the contract's cash value is based on the performance of the underlying investment.Straight Life Income - Correct Answer provides the largest monthly income payment for a given amount
- annualized funds. Also called pure life option, income payments are made for the annuitants lifetime,
- Life insurance for an endowment
- Annuity for an Annuity 1 / 3
regardless of how long that may be.In regards to the Section 1035 tax code, which exchanges is permitted on a tax-free basis? - Correct Answer 1. life insurance for life insurance
3.Endowment for an Endowment 4.Life insurance for an Annuity
Modified Endowment Contract (MEC) - Correct Answer Tax law considers a single premium life insurance policy to be what?Anthony becomes an agent for Acme Insurance Company. Acme has not filed the Notice of appointment with the commissioner. It must do so within how many days? - Correct Answer 15 Days Spendthrift Clause - Correct Answer A clause that prevents the debtors of a beneficiary from collecting the benefits before he/she receives them.Annuity death benefits - Correct Answer are not tax deductible or tax free A couple makes a combined income for $175,000 annually.Will their Individual Retirement Plan (IRA) be tax deductible? - Correct Answer No. If it is joint an dover $123,000 there is no deduction.What is the cap on an IRA tax deduction that will provide NO DEDUCTION for a single person? - Correct Answer $74000 or more.Prepaid Tuition Plans - Correct Answer College saving plan that allows for the purchase of units or credits at participating colleges and universities for future tuition. Limited to instate tuition only. NOT SUBJECT TO FEDERAL TAX. Parents are able to lock in the price of tuition at that time.risk sharing - Correct Answer Allocating ownership of a risk to another party Risk Transfer - Correct Answer A pure risk is transferred from the insured to the insurer, who typically is in a stronger financial position Which is a characteristic of industrial life Insurance? - Correct Answer Premiums are payable monthly or weekly.Industrial Life Insurance - Correct Answer These policies generally do not require a medical exam to qualify. They offer individual coverage in small face amounts usually less than $10,000. 2 / 3
Reinsurance - Correct Answer an arrangement by which the primary insurer that initially writes the insurance transfers to another insurer part or all of the potential losses associated with such insurance How long do insurers allow backdating a policy in order to receive lower rates? - Correct Answer 6 Months What are the differences between mutual insurance companies and stock insurance companies? - Correct Answer Mutual insurance companies are owned by its policy holders while stock insurance companies are owned by stockholders who may or may not be policy holders. Mutual Insurance companies sell participating policies which distributes policy dividends that are NONTAXABLE while Stock companies distribute profit in the form of taxable stock dividends.Which of the following individuals would be most likely to enter into a viatical settlement? - Correct Answer Ben, who is terminally ill and needs money to pay his medical bills Agent Smith represents Gretchen and is negotiating the viatical settlement agreement in which she will sell her life insurance policy to BBC Corporation. In this transaction, what is Agent Smith considered? - Correct Answer a viatical settlement broker Which of the following individuals represents a viator and negotiates viatical settlement contracts? - Correct Answer viatical broker about 2 percent - Correct Answer Insurers will decline applicants with very high substandard risk ratings.What percentage of applicants do insurers reject?Numeric codes that are communicated electronically - Correct Answer In what form does the MIB present its information to insurers?Insurers cannot rate or decline a life insurance risk based solely on MIB information. - Correct Answer Which one of the following best describes the restrictions an insurer must operate under when using information from the Medical Information Bureau (MIB)?
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