Free North Carolina Life & Health Insurance Practice Exam 2026

North Carolina life and health insurance exam sample questions and answers

6 of the 110 practice questions, one from each topic, with the answer explained.

1. 1. A small business with 15 employees wants a plan funded only by employer contributions to each worker's own IRA. Which plan fits?

   • A.Roth 401(k) plan
   • B.SEP IRA
   • C.SIMPLE IRA
   • D.403(b) plan

   Answer: B. A Simplified Employee Pension is funded solely by employer contributions to employees' IRAs. A SIMPLE IRA, for employers with 100 or fewer employees, is built around employee salary deferrals plus a required employer contribution, and a 403(b) is for nonprofits and public schools.

2. 2. Under North Carolina law, a fraternal benefit society is a nonprofit society without capital stock that has:

   • A.Stockholders who elect the board
   • B.A board named by the Commissioner
   • C.Members who exchange contracts
   • D.Lodges and representative government

   Answer: D. G.S. 58-24-1 defines a fraternal benefit society as one run solely for its members and their beneficiaries, not for profit, on a lodge system with ritualistic work and a representative form of government. Members exchanging contracts describes a reciprocal.

3. 3. An employer means to stop paying group health premiums. Under North Carolina law it must give covered employees written notice at least:

   • A.45 days before it ends
   • B.15 days before it ends
   • C.31 days before it ends
   • D.60 days before it ends

   Answer: A. G.S. 58-50-40(b) requires an insurance fiduciary to notify everyone covered at least 45 days before group health or group life coverage ends for nonpayment. Willfully failing to pay and to give that notice is a felony.

4. 4. An employee whose group health coverage would end on leaving her job elects North Carolina state continuation. It can last up to:

   • A.6 months
   • B.12 months
   • C.18 months
   • D.36 months

   Answer: C. G.S. 58-53-35(a)(1) ends state continuation 18 months after coverage would otherwise have ended. She must have been insured for the 3 months before leaving (G.S. 58-53-10) and may be charged up to 102 percent of the group rate (G.S. 58-53-30).

5. 5. A North Carolina disability income policy may not define a preexisting condition more broadly than one treated or advised within:

   • A.36 months before coverage
   • B.12 months before coverage
   • C.24 months before coverage
   • D.6 months before coverage

   Answer: C. G.S. 58-51-130(d) caps the definition at a condition for which care or advice was received or recommended in the 24 months before coverage began. If no medical history is asked, disabilities starting after 24 months cannot be denied as preexisting.

6. 6. For North Carolina viatical settlement law, a person is terminally ill when the illness is reasonably expected to cause death within:

   • A.24 months or fewer
   • B.12 months or fewer
   • C.6 months or fewer
   • D.36 months or fewer

   Answer: A. G.S. 58-58-205(9) defines terminally ill as having an illness that can reasonably be expected to result in death in 24 months or fewer. A viatical settlement pays the owner less than the expected death benefit for the policy.