NC Life Insurance Exam Study Guide Flashcards

NC Life Insurance Agent exam preparation flashcards focusing on Nonforfeiture, Dividends, Settlement Options, and State Statutes.

Nonforfeiture Options

Options that allow a policyowner to keep value from a lapsed policy.

Extended Term Insurance

The default nonforfeiture option that provides the full face amount for a limited time (highest death benefit).

Cash Surrender

A nonforfeiture option where the policyowner takes cash and terminates the policy.

Reduced Paid-Up

A nonforfeiture option involving a smaller permanent policy with no future premiums.

Dividends

Return of excess premium from participating policies.

Reduce Premium

A dividend option that lowers future premiums.

Accumulate at Interest

A dividend option where dividends earn interest with the insurer.

Paid-Up Additions

A dividend option used to buy additional permanent insurance.

One-Year Term

A dividend option that buys temporary insurance.

Settlement Options

Methods for the distribution of insurance proceeds (includes Lump Sum, Fixed Period, Fixed Amount, and Life Income).

Fixed Period

A settlement option providing equal payments for a specified number of years.

Fixed Amount

A settlement option where the beneficiary receives a set dollar amount until funds are exhausted.

Straight Life (Settlement Option)

The highest monthly payment option that stops at death.

Waiver of Premium

A rider that waives the premium during a period of disability.

Guaranteed Insurability

A rider that allows the owner to buy more insurance without proof of insurability.

Payor Rider

A rider specifically used on juvenile policies.

Fixed Annuity

An annuity where funds are held in the insurer's general account.

Variable Annuity

An annuity where funds are held in a separate account.

Deferred Annuity

An annuity where payments start at a later date.

Immediate Annuity

An annuity where payments start immediately.

Term Insurance

Pure death protection; does not provide cash value.

Whole Life

Permanent coverage that includes cash value.

Universal Life (UL)

Permanent life insurance characterized by flexible premiums.

Variable Life

Life insurance involving separate account investments.

Modified Life

Life insurance featuring one premium increase.

Graded Life

Life insurance featuring several premium increases.

Incontestable Clause

A period of 2 years after which the insurer cannot contest the policy.

Replacement Free Look

A period of 30 days during a policy replacement.

Attorney General

The official responsible for criminal prosecution.

Insurance Commissioner

The official who enforces laws and regulations.

Twisting

Replacing a policy to the client’s detriment; harmful replacement.

Misrepresentation

Making false statements.

Last Survivor

A policy that pays out upon the last death.

Joint Life

A policy that pays out upon the first death.

Broker

An insurance professional who represents the insured.

Social Security Quarters

A total of 40 quarters are needed for Social Security eligibility.

Conservation

The act of preventing policy replacement.

Viatical Settlement

Selling an insurance policy for cash.

Morbidity

A term relating to illness.

Mortality

A term relating to death.

TSA

Tax Sheltered Annuity.

CRAPO

An acronym for Dividend Options: Cash, Reduce Premium, Accumulate at Interest, Paid-Up Additions, and One-Year Term.