17 Free North Carolina Life & Health Practice Questions: Accident and Health Insurance Policy Provisions (2026)

Question 1 (Chapter 5)

An insured individual changes their occupation to a more hazardous job but fails to notify the insurance company. If they suffer an injury, how will the insurer likely respond under the 'Change of Occupation' optional provision?

• A) The insurer will deny the claim entirely due to misrepresentation.
• B) The insurer will pay the full benefit but increase future premiums.
• C) The insurer will cancel the policy retroactively to the date of the job change.
• D) The insurer will adjust the benefits to the amount the premium would have purchased at the more hazardous rate.

Question 2 (Chapter 5)

An insured individual has a policy that is 'Guaranteed Renewable.' What does this mean for the insured?

• A) The insurer cannot cancel the policy and cannot raise premiums under any circumstances.
• B) The insurer may cancel the policy if the insured develops a chronic illness.
• C) The insurer can only increase premiums based on the individual's health status.
• D) The insurer cannot cancel the policy, but can raise premiums for the entire class of insureds.

Question 3 (Chapter 5)

An insured individual is unhappy with their new health policy and decides to return it within 10 days of delivery. Which provision allows them to do this and receive a full refund?

• A) Reinstatement.
• B) Entire Contract.
• C) Consideration Clause.
• D) Free Look.

Question 4 (Chapter 5)

Which provision mandates that the policy, along with the application and any attached riders, is the final agreement between the insurer and the insured?

• A) Incontestability.
• B) Grace Period.
• C) Assignment.
• D) Entire Contract.

Question 5 (Chapter 5)

An insured individual has a policy that is 'Optional Renewable.' What is the insurer's right regarding this policy?

• A) The insurer can cancel the policy only on the premium due date.
• B) The insurer may cancel the policy at any time for any reason.
• C) The insurer cannot cancel the policy under any circumstances.
• D) The insurer can refuse to renew the policy on any premium due date or policy anniversary.

Question 6 (Chapter 5)

An applicant for a health policy intentionally omits a history of chronic heart disease on their application. Three years later, the insurer discovers the omission during a routine review of medical records. Under North Carolina law, can the insurer void the policy?

• A) Yes, because fraudulent misstatements are an exception to the time limit on certain defenses.
• B) No, because the two-year incontestable period has expired.
• C) No, because the insurer had two years to investigate the application.
• D) Yes, but only if the applicant is still currently suffering from the condition.

Question 7 (Chapter 5)

An insured dies while their policy is in force. The policy contains a 'Change of Beneficiary' provision. Who has the right to change the beneficiary?

• A) The insurance company, upon approval of the claim.
• B) The beneficiary, if they are a family member.
• C) The policyowner, only if the beneficiary is irrevocable.
• D) The insured, at any time without the beneficiary's consent.

Question 8 (Chapter 5)

An insured is injured while working in an illegal occupation. Which optional provision allows the insurer to deny the claim based on this activity?

• A) Change of Occupation
• B) Conformity with State Statute
• C) Illegal Occupation
• D) Unpaid Premium

Question 9 (Chapter 5)

A policyholder is granted a 'Waiver of Premium' rider. Under what circumstances does this rider typically trigger?

• A) When the insured becomes totally disabled for a specified period.
• B) When the insured reaches age 65.
• C) When the insured changes their occupation to a less hazardous one.
• D) When the policy has been in force for 10 years.

Question 10 (Chapter 5)

An insured's policy is 'Conditionally Renewable'. What is the condition that allows the insurer to terminate the coverage?

• A) The insurer decides they no longer want to offer that type of policy.
• B) The insurer wants to increase the premium.
• C) The insured reaches a specific age or fails to meet specific conditions stated in the policy.
• D) The insured has filed more than three claims.

Question 11 (Chapter 5)

What is the purpose of the 'Right to Examine' (Free Look) provision?

• A) To allow the insurer to examine the insured's medical records.
• B) To allow the beneficiary to examine the claim settlement.
• C) To allow the policyowner to review the policy and return it for a full refund if dissatisfied.
• D) To allow the state to examine the insurer's financial records.

Question 12 (Chapter 5)

A policyholder submits a claim for a medical procedure. The insurer discovers that the insured has another policy with a different company that covers the same loss. Which optional provision allows the insurer to prorate the benefits if the insured did not notify the insurer of the other coverage?

• A) Other Insurance in This Insurer
• B) Relation of Earnings to Insurance
• C) Insurance with Other Insurers
• D) Unpaid Premium

Question 13 (Chapter 5)

An insured individual has a policy that is 'Conditionally Renewable'. Under what circumstance can the insurer terminate the coverage?

• A) Only if the insured reaches age 65
• B) Only if specific conditions stated in the policy are met
• C) Only if the insured files too many claims
• D) At any time with 30 days' notice

Question 14 (Chapter 5)

An insured individual has a policy that is 'Noncancelable.' What does this classification guarantee regarding the policy's continuation?

• A) The insurer can increase premiums only if the entire class of insureds experiences a rate hike.
• B) The insurer cannot cancel the policy, but may increase premiums based on the individual's health changes.
• C) The insurer can cancel the policy only for nonpayment of premiums or fraud.
• D) The insurer cannot cancel the policy and cannot increase the premium for any reason until the insured reaches age 65.

Question 15 (Chapter 5)

An insured individual has a policy with an 'Unpaid Premium' provision. If a claim is filed while a premium is overdue but still within the grace period, what can the insurer do?

• A) Deny the claim
• B) Deduct the overdue premium from the claim payment
• C) Cancel the policy immediately
• D) Charge a late fee

Question 16 (Chapter 5)

A policyholder's health insurance policy includes an 'Illegal Occupation' provision. If the insured is injured while participating in a robbery, what is the insurer's liability?

• A) The insurer must pay the claim because the policy is a legal contract.
• B) The insurer is not liable for any loss sustained while the insured is committing a felony or illegal occupation.
• C) The insurer is liable only if the injury was accidental and unrelated to the illegal act.
• D) The insurer must pay the claim but can report the insured to law enforcement.

Question 17 (Chapter 5)

A policyholder's health insurance policy includes the 'Entire Contract' provision. What does this mean regarding the application?

• A) The application is only part of the contract if it is signed by a notary.
• B) The application is considered separate from the contract and cannot be used to deny a claim.
• C) The application, the policy, and any attached riders constitute the entire agreement.
• D) Only the policy document itself constitutes the entire contract.