Evergreen Insurance Prep

North Carolina Life & Health Insurance License, Practice Exams

North Carolina Life and Accident & Health/Sickness producer licensing. General insurance knowledge plus the North Carolina General Statutes (Chapter 58), authored from public-domain statutes.
Content last updated 23 June 2026

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Each module is scored separately here so you know exactly where you stand. To pass the real North Carolina exam you need 70%.

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The free sample gives you about 20 questions per module. The full bank contains every question — general insurance plus state law — with written, statute-cited explanations. $49, one time, lifetime access on up to 3 devices — every state and line we add later included.

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Frequently asked questions

How is the North Carolina producer licensing exam structured?

North Carolina licenses Life and Accident & Health/Sickness as separate Pearson VUE exams. Each is a two-part test (a general insurance section and a North Carolina law section) of 55 scored questions, runs 1 hour 15 minutes, and requires an overall score of 70% (at least 39 of 55) to pass. This bank covers the general insurance material and the North Carolina law for both lines.

What score do I need to pass?

You need 70%. Practice each module to that level and run the full exam simulation before your test date.

Are these real exam questions?

No vendor publishes the live exam. Every question here is original, written to the official content outline and grounded in public-domain sources — including the North Carolina General Statutes (Chapter 58) for the state-law questions, with the statute section cited in each explanation.

How many practice questions are included?

The full North Carolina bank contains 1214 questions (general insurance plus North Carolina law), with written, source-cited explanations. The free sample gives you about 20 questions per module.

What does access cost?

$49, one time, for lifetime access — and it includes every state and line we add later, at no extra charge. No subscription.

Can I use it on more than one device?

Yes. One purchase works on up to 3 of your devices, for example your laptop, phone and tablet, so you can practise wherever you are. Your progress is saved on each device.

Do I need to create an account?

No. The practice tests run in your browser with no signup. Your score history is saved on your own device.

Sample North Carolina Life & Health Insurance License practice questions

A selection of free questions with answers and explanations. Use the interactive modules above for timed, scored drills.

To be 'fully insured' for Social Security retirement benefits, a worker generally needs:

  1. 40 quarters (about 10 years) of covered earnings ✓
  2. 20 quarters earned within the most recent five-year period
  3. A minimum of 30 years of continuous full-time employment
  4. Only a single quarter of covered earnings at any point in life

Why: Fully insured status requires 40 quarters of coverage (roughly 10 years of work in covered employment).

A distinguishing feature of adjustable life insurance is that the owner can:

  1. Invest the cash value directly in stocks and bonds of their choosing
  2. Change the premium, face amount, or coverage period as needs change ✓
  3. Only ever convert it into a fixed single-premium immediate annuity
  4. Receive guaranteed dividends regardless of the insurer's experience

Why: Adjustable life lets the owner modify premium, face amount, and protection period, effectively shifting between term and permanent coverage.

Under the Uniform Simultaneous Death Act, if the insured and the primary beneficiary die together and the order of death is unknown, it is presumed that:

  1. The insured survived the beneficiary ✓
  2. The beneficiary survived the insured and the proceeds go through that person's estate
  3. Both parties forfeit the proceeds back to the issuing insurance company
  4. The proceeds are split equally between both estates by the probate court

Why: The Act presumes the insured outlived the beneficiary, so proceeds pass to the contingent beneficiary or the insured's estate, not the deceased beneficiary's estate.

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The grace period in a typical life insurance policy is:

  1. About 31 days, during which an overdue premium may still be paid ✓
  2. Exactly 24 hours from the date the premium first becomes due
  3. A full 12 months following any missed premium payment
  4. Only available once during the entire life of the policy

Why: The grace period (commonly 31 days) keeps coverage in force after a missed premium; a death during it pays the benefit minus the premium owed.

Under G.S. 58-63-50, the penalty applies to a person who willfully violates which of the following?

  1. Any provision of Article 63, whether or not an order was issued unless an exception clearly applies for the coverage that is in force
  2. An undefined practice subject to a court injunction
  3. A cease and desist order of the Commissioner under G.S. 58-63-32, after it has become final and while in effect ✓
  4. A policy form filing requirement

Why: G.S. 58-63-50 imposes the penalty on a person who willfully violates a cease and desist order of the Commissioner under G.S. 58-63-32 after it has become final and while the order is in effect.

Under G.S. 58-33-125, the fee for an individual insurance producer appointment is:

  1. $20.00
  2. $50.00
  3. $11.00 ✓
  4. $10.00

Why: G.S. 58-33-125(a) sets the individual insurance producer appointment fee at $11.00 (the Medicare supplement/LTC appointment is $10.00).

The permitted trade practices of G.S. 58-63-16 expressly do NOT apply to which line of insurance?

  1. Group life insurance
  2. Medicare supplement insurance
  3. Commercial property insurance
  4. Title insurance ✓

Why: G.S. 58-63-16(c) provides that the section shall not apply to title insurance.

Which nonforfeiture option uses the cash value to continue the full face amount as term insurance for as long as the cash value will buy?

  1. Reduced paid-up
  2. Cash surrender
  3. Extended term ✓
  4. Automatic premium loan

Why: Extended term keeps the full face amount as term coverage for a limited period; it is often the automatic default.

Under the North Carolina Medicare supplement free-look provision, any premium refund must be paid in what manner?

  1. Paid directly to the applicant by the insurer in a timely manner ✓
  2. Credited toward the next renewal premium
  3. Paid to the soliciting agent for delivery to the applicant
  4. Held in escrow pending Commissioner approval

Why: G.S. 58-54-30 states that any refund made under the free-examination provision shall be paid directly to the applicant by the insurer in a timely manner.

Annuity suitability standards require the producer to:

  1. Have reasonable grounds to believe the annuity fits the buyer ✓
  2. Always recommend the annuity that pays the producer the highest available commission
  3. Sell variable annuities only to applicants who are older than sixty-five years
  4. Provide a written guarantee of the annuity's future investment performance

Why: Suitability requires a reasonable basis to believe the recommendation meets the consumer's needs and financial situation.

Under N.C. Gen. Stat. § 58-51-5, a family accident and health policy taken out by an adult family member (the policyholder) may cover dependent children only up to a specified age that shall not exceed:

  1. 19 years ✓
  2. 18 years
  3. 21 years
  4. 26 years

Why: Section 58-51-5(a)(3) permits a family policy to insure children under a specified age 'which shall not exceed 19 years' along with the spouse and other dependents.

An automatic premium loan provision is designed to:

  1. Pay an overdue premium from the cash value to prevent a lapse ✓
  2. Lend the policyowner the full face amount on demand at any time
  3. Automatically increase the death benefit each policy anniversary
  4. Refund all premiums if the insured is never disabled or ill

Why: If a premium is unpaid at the end of the grace period, the APL provision automatically borrows from the cash value to keep the policy in force.

For a single-premium whole life or endowment policy under specified subdivisions, the Standard Nonforfeiture Law permits an interest rate not exceeding:

  1. Five percent (5%) per annum
  2. Six and one-half percent (6½%) per annum ✓
  3. Three percent (3%) per annum
  4. Eight percent (8%) per annum

Why: G.S. 58-58-55(i) permits a rate of interest not exceeding 6½% per annum for single premium whole life or endowment insurance policies subject to (e)(2) and (e)(3).

A 'bed reservation' benefit in a long-term care policy:

  1. Continues paying to hold the resident's bed during a hospital stay ✓
  2. Guarantees a private room in any nursing home nationwide
  3. Pays a cash bonus for each day the insured stays healthy
  4. Reserves a hospital bed in advance of any planned surgery

Why: A bed reservation benefit keeps paying the facility (for a limited number of days) to hold the insured's bed while they are temporarily hospitalized.

A plan has a $1,500 deductible, 80/20 coinsurance, and a $4,000 out-of-pocket maximum. On a $30,000 bill, the insured pays:

  1. $4,000 ✓
  2. $7,200
  3. $5,700
  4. $1,500

Why: Deductible $1,500 + 20% of $28,500 = $7,200, but the $4,000 out-of-pocket maximum caps the insured's cost at $4,000.

An individual may be licensed by the Commissioner as a foreign military sales agent to represent a life insurance company domiciled in this State, but only if the agent represents the company:

  1. In a foreign country or territory and either on a U.S. military installation or with U.S. military personnel ✓
  2. In any state where the company is admitted
  3. Exclusively to active-duty residents of North Carolina
  4. Only through a licensed resident producer countersigning each policy unless an exception clearly applies for the coverage that is in force

Why: G.S. 58-33-15 limits the overseas military (restricted) license to representing the company in a foreign country or territory and either on a U.S. military installation or with U.S. military personnel.

When must a member insurer deliver the Guaranty Association summary document to a policy owner?

  1. Within 30 days after the policy is issued under the policy's terms
  2. Before or at the time of delivery of the policy or contract ✓
  3. Only upon the policyholder's request
  4. At the first renewal

Why: G.S. 58-62-86(b) provides that the summary document must be delivered before or at the time of delivery of the policy or contract (and is also available on request).

A licensed producer dies, and his surviving spouse needs time to transfer the insurance business. The Commissioner may issue the surviving spouse a temporary license that:

  1. Authorizes representation of any authorized insurer in the State according to the insurer's rules
  2. Lasts no longer than 30 days
  3. Requires the spouse to first pass the licensing examination
  4. Authorizes representation only of insurers that had appointed the producer at the time of death ✓

Why: G.S. 58-33-66(a)(1) authorizes the temporary license, and 58-33-66(c) limits a death/disability temporary licensee to insurers that had appointed the producer at the time of death or commencement of disability.

Which beneficiary designation can the policyowner change at any time without the beneficiary's consent?

  1. Irrevocable
  2. Revocable ✓
  3. Irrevocable contingent
  4. Creditor

Why: A revocable beneficiary can be changed at the owner's discretion; an irrevocable beneficiary must consent to changes.

Making a false entry in an insurer's books with intent to deceive a lawfully appointed examiner falls under which defined practice?

  1. Defamation
  2. Misrepresentation of policy contracts
  3. False financial statements ✓
  4. Boycott, coercion and intimidation

Why: G.S. 58-63-15(5) includes making any false entry in any book, report, or statement of an insurer with intent to deceive a lawfully appointed examiner, within False Financial Statements.

A group plan's 'probationary period' (waiting period) is the time a new employee must:

  1. Wait after being hired before becoming eligible to enroll ✓
  2. Remain disabled before any disability benefit becomes payable
  3. Hold the coverage before pre-existing conditions are covered
  4. Wait after filing a claim before the insurer must pay it

Why: The probationary/waiting period is the length of employment required before a new hire becomes eligible to enroll in the group plan.

When a single life is covered by a health benefit plan along with other benefits, the absolute aggregate ceiling on the Association's liability for that one life is:

  1. $300,000
  2. $800,000
  3. $1,000,000
  4. $500,000 ✓

Why: G.S. 58-62-21(d)(6) provides that where benefits for a health benefit plan apply, the aggregate liability shall not exceed $500,000 with respect to any one life.

A producer holding a variable life and variable annuity products license may sell, solicit, or negotiate variable contracts only if the producer satisfies the Commissioner that the producer has met the FINRA requirements of:

  1. The Department of Insurance examiners
  2. The federal SEC directly
  3. The NAIC
  4. The Secretary of State of North Carolina ✓

Why: G.S. 58-33-26(e) requires the producer to satisfy the Commissioner that the producer has met the FINRA requirements of the Secretary of State of North Carolina.

Unless otherwise specially provided, hearings before the Commissioner are held in accordance with Article 3A of which chapter?

  1. Chapter 58, Article 2
  2. Chapter 150B of the General Statutes ✓
  3. Chapter 1A (Rules of Civil Procedure)
  4. Chapter 75

Why: G.S. 58-2-50 requires hearings to be held in accordance with this Article and Article 3A of Chapter 150B of the General Statutes.

Which of the following is a ground for which the Commissioner may suspend, revoke, or refuse to renew a producer license under G.S. 58-33-46?

  1. Failing to write a minimum amount of premium each year
  2. Declining to accept a company appointment
  3. Changing residence within North Carolina without notice unless an exception clearly applies for the coverage that is in force
  4. Having been convicted of a felony or a misdemeanor involving dishonesty, breach of trust, or moral turpitude ✓

Why: G.S. 58-33-46(a)(6) lists conviction of a felony or a misdemeanor involving dishonesty, a breach of trust, or moral turpitude as a ground.

The USA PATRIOT Act and related rules require insurers selling cash-value products to:

  1. Maintain an anti-money-laundering (AML) program ✓
  2. Refuse coverage to anyone who pays by cash
  3. Report every policy sold directly to the IRS
  4. Obtain FBI clearance for each new applicant

Why: Insurers offering products with cash value or investment features must have AML programs, including customer identification and suspicious-activity reporting.

When personal information is collected from a source OTHER than the applicant or public records, the notice of information practices must be provided no later than:

  1. 30 days after the policy is issued in that particular circumstance
  2. The first renewal date
  3. The time the collection of personal information is initiated ✓
  4. The time the claim is filed

Why: G.S. 58-39-25(a)(1)b. requires the notice no later than the time collection is initiated when personal information is collected from a source other than the applicant or public records.

An owner surrenders a policy with a $22,000 cash value after paying $15,000 in premiums. The taxable gain is:

  1. $7,000 ✓
  2. $22,000
  3. $15,000
  4. $0

Why: Gain over basis is taxable: $22,000 − $15,000 = $7,000 of ordinary income.

An Explanation of Benefits (EOB) sent to an insured is:

  1. A statement showing what the plan paid and what the insured owes ✓
  2. A bill the insured must pay before any care is delivered
  3. The legally binding insurance contract between the parties
  4. A government form used to enroll in a new health plan

Why: An EOB is not a bill; it itemizes the charge, the plan's allowed amount, what the plan paid, and the patient's remaining responsibility.

If a North Carolina employer replaces the group health policy with another group policy, the continuing employee is entitled to do what?

  1. Restart a new 18-month continuation period
  2. Receive a cash settlement of the remaining continuation value under the policy's terms
  3. Convert immediately to an individual policy
  4. Continue under the successor group policy for any unexpired period of continuation ✓

Why: G.S. 58-53-35(b) provides that if the employer replaces the group policy with another group policy, the employee is entitled to continue under the successor group policy for any unexpired period of continuation to which the employee is entitled.