Free Life Insurance Basics Practice Questions
North Carolina Life exam — 143 practice questions.
Subtopics: Purpose, Human life value, Needs approach, Parties, Field underwriting, Risk classification, Premium factors, Consideration, Soliciting agent, Employer insurable interest, Partner insurable interest, Charity insurable interest, Minors as owners, Group life eligibility, Association group life, Noncontributory group life, Group life conversion, Group conversion form, Group policy termination, Death in conversion period, Group life facility of payment, Group life representations, Group life portability, Cost comparison, Cost indexes, Insurable interest, Insurable interest parties, Personal uses, Liquidity, Buy-sell funding, Key person, Term vs permanent, Participating policies, Separate account, Variable products licensing, Mortality, Interest assumption, Premium mode, Advertising, Application accuracy, Sources of underwriting, Substandard risk, Effective date, Statement of good health, Backdating, MIB, Unfair discrimination underwriting, Group vs individual, Warranties vs representations, Disclosure statement, Estate conservation, Executive compensation, Expense factor, Declined risk, Surrender comparison index, Net amount at risk, Legal reserve, CSO mortality table, Level premium funding, Cash value accumulation, Endowment maturity, Free look period, Policy replacement rules, Twisting, Churning, Rebating, Defamation, Binding receipt, Insuring clause, Consideration clause, Owner vs insured, Stranger-originated life insurance, Suitability, Sales illustration, Producer appointment, Paramedical exam, Inspection report, Nonmedical limit, Split-dollar plan, Section 162 executive bonus, Dependency period need, Social Security blackout period, Capital retention approach, Final expense need, Insurance age, Flat extra premium, Postponed risk, Agent's report, Policy summary, Material misrepresentation, Estate creation, Cash accumulation, Charitable giving, Buy-sell cross purchase, Buy-sell entity purchase, Cross purchase count, Key person beneficiary, Deferred compensation, Split dollar collateral assignment, Executive bonus taxation, Business overhead uses, Information for needs analysis, Group vs individual class, Nonparticipating policy, Fixed vs variable, Variable minimum death benefit, Gross vs net premium, Modal factors, Mortality table use, Gender and mortality, Producer delivery duties, Constructive delivery, Rated policy delivery, Conditional receipt insurability, No premium with application, Application signatures, Application corrections, Insurable interest third party, Self insurable interest, Attending physician statement, MIB adverse decisions, MIB pre-notice, HIV testing consent, Underwriting prohibited factor, Rated policy, Standard risk, Prescription database, Social Security fully insured, Currently insured, Survivor benefits children, Spouse caring for child, Blackout period end, Lump-sum death benefit, Full retirement age, Social Security disability, Social Security as offset, Producer report purpose
Read the Life Insurance Basics study guide
Sample questions & answers
1. The primary purpose of life insurance is to:
Provide funds to offset the financial loss caused by death
Life insurance is designed to create an immediate estate and replace lost income or cover obligations resulting from the insured's death.
2. The human life value approach to determining life insurance needs focuses on:
The present value of the insured's future earnings
The human life value approach estimates coverage based on the present value of income the insured would earn over the remaining working years, net of personal consumption.
3. The needs approach to life insurance planning determines the amount of coverage by:
Estimating the survivors' financial needs and resources
The needs approach analyzes the financial obligations and goals of survivors (such as final expenses, income, and education) against existing resources to set coverage amounts.
4. In a life insurance contract, the person whose life is covered is the:
Insured
The insured is the person whose life the policy covers; the owner controls the policy and the beneficiary receives the death benefit.
Practice: Life Insurance Basics
Answer choices are shuffled every time, and every question comes with an explanation.
Practice questions are study aids generated for exam preparation and are not actual exam questions. Content is provided for educational purposes and is not legal advice. Verify current statutes, rules, and exam specifications with the Insurance Department and the exam administrator before relying on it.
