Download Colorado Life Insurance Final Exam – 95 Official-Style Questions with Answers 2025 and more Exams Nursing in PDF only on Docsity!
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COLORADO
LIFE INSURANCE FINAL EXAM
(with 3 set Exams)
Each Exam Consist of 95 Multiple choice Questions with
Answers
The Ultimate Study Guide to Pass Your Exam Without Breaking a
Sweat
Inside, you'll get:
- Complete Exam Coverage —all the essential topics, laid out clearly and concisely.
- Real Tests —updated to match the latest exam format and difficulty.
- Insider Tips —learn from a seasoned pro, with strategies that give you a winning edge.
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- Simplified Explanations —no jargon, no confusion—just clear, simple language.
- Be Exam-Ready —enter the exam room fully prepared and armed with the confidence to
succeed.
TABLE OF CONTENTS
Colorado Life Insurance Final Exam set 1………………………………
Colorado Life Insurance Final Exam set 2………………………………
Colorado Life Insurance Final Exam set 3……………………………… 41
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- Which type of contract liquidates an estate through recurrent payments? a) universal life insurance b) whole life insurance c) annuity d) 401(k) Answer: c) annuity
- Which is true concerning a Variable Universal Life policy? a) policyowner controls where the investment will go and selects the amount of the premium payment b) policyowner has no say where the investment will go by can choose the premium mode c) the investment vehicle for this type of policy is held in the insurer's general portfoilo d) the death benefit can vary but the policyowner has no say in the premium amount paid Answer: A) policyowner controls where the investment will go and selects the amount of the premium payment
- Which of the following words may be used in the advertisement of life insurance or annuitites? a) risk-free b) guaranteed c) investment d) savings Answer: B) guaranteed
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- Which of these are NOT an example of a Non-forfeiture option? a) extended term b) reduced paid-up c) cash surrender d) life income Answer: D) life income
- A Cost of Living rider gives the insured a) tax incentives b) monthly income c) decreasing premiums d) additional death benefits Answer: D) additional death benefits
- If an insurer is authorized to conduct business in another state and wishes to conduct business in Colorado, it must a) receive a certificate of authority from the Federal government b) receive a certificate of authority from a reciprocal state c) receive a certificate of authority from a bordering state d) receive a certificate of authority from Colorado Answer: D) receive a certificate of authority from Colorado
- When recommending the purchase or exchange of an annuity, a producer must determine the suitability of the purchase by performing all of the follow- ing EXCEPT a) have reasonable grounds for believing that the recommendation is suitable for the consumer b) make reasonable attempts to obtain suitability information c) obtain information such as financial status, tax status, and investment
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Answer: A) grace
- S has a Whole Life policy with a premium payment due soon. Which provision would keep the policy in force if S does not make the required payment and the policy has adequate cash value from which the premium payment can be made? a) automatic policy loan b) assignment c) grace period d) waiver of premium Answer: A) automatic policy loan
- P and Q are married and have three children. P is the primary beneficiary on Q's Accidental Death and Dismemberment (AD&D) policy and Q's sister R is the contingent beneficiary. P, Q, and R are involved in a car accident and Q and R are killed instantly. The Accidental Death benefits will be paid to a) R's estate b) Q's estate c) P and Q's estate d) P only Answer: D) P only
- T purchased a $100,000 single premium, Straight Life annuity 5 years ago. He has received monthly payments since the inception of the annuity. If T dies, the insurance company a) does NOT have to make any further payments b) MUST make full payments to the beneficiary
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c) MUST make half-payments to the beneficiary d) has the option to continue making payments based on what has already been paid out Answer: A) does NOT have to make any further payments
- What type of life insurance incorporates flexible premiums and an ad- justable death benefit? a) endowment policy b) modified whole life c) decreasing term d) universal life Answer: D) universal life
- To be valid, a group life insurance policy a) must be issued to a group formed solely for the purpose of obtaining insurance b) may not be issued to a group formed solely for the purpose of obtaining insurance. c) may not extend coverage to dependents d) may not subject individuals to standards of insurability Answer: B) may not be issued to a group formed solely for the purpose of obtaining insurance.
- When a life insurance underwriter is determining insurability, it is illegal to base these decisions on a) health history b) hobbies c) occupation
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- What advantage does the renewability feature give to a term policy? a) the insured may extend the coverage period at no additional cost b) the insured may apply for this with little or no underwriting c) the insured may borrow against the cash value d) the insured may extend the coverage period Answer: D) the insured may extend the coverage period
- Which of the following statements regarding the Notice Regarding Re- placement of Life Insurance if CORRECT? a) it is presented to the applicant only on request b) it must be presented to the applicant after the policy is issued c) a copy of the notice must be signed by the applicant and submitted with the application d) a copy of the notcie must be reviewed and signed by both the policy applicant and beneficiary Answer: c) a copy of the notice must be signed by the applicant and submitted with the application
- Which of the following statements is true regarding the replacement of a life insurance policy in Colorado? a) the replacing insurer must maintain copies of all records regarding the replacement for at least 5 years b) the producer must maintain copies of all records regarding the replacement for at least 5 years c) the insurer whose policy is being replaced must keep all records regarding the replacement for at least 5 years d) all parties must maintain copies of all records regarding the replacement for at
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least 10 years Answer: A) the replacing insurer must maintain copies of all records regarding the replacement for at least 5 years
- Which of the following is a duty of the Commissioner? a) writing insurance laws b) setting insurance rates c) reviewing and approving license applications d) setting sales quotas Answer: c) reviewing and approving license applications
- A verbal or written statement which misleads a policy's features, benefits, or coverage is considered a) coercion b) rebating c) defamation d) misrepresentation Answer: D) misrepresentation
- Under the suicide clause, a life insurance claim cannot be denied due to suicide after a period of from the policy's effective date. a) 1 year b) 2 years c) 3 years d) 4 years Answer: A) 1 year
- What is the basic function of an annuity? a) the systematic liquidation of accumulated funds b) the guarantee of a specific sum of money to a designated beneficiary upon the death of the insured
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c) tertiary d) replaceable Answer: A) revocable
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- Who benefits in Investor-Originated Life Insurance (IOLI) when the in- sured dies? a) beneficiary b) insured c) policyowner d) insurer Answer: c) policyowner
- S recently received a $500,000 lump sum retirement buyout from her employer. She would like to buy an annuity that will immediately furnish her with a guaranteed income for life. What type of annuity is best suited for her situation? a) 403(b) plan b) deferred premium c) single premium d) period certain Answer: c) single premium
- A Limited-Pay Life policy has: a) graded death benefits b) no cash value c) premium payments limited to a specified number of years d) premium payments that are paid to age 100 Answer: c) premium payments limited to a specified number of years
- Quarterly premium payments increase the annual cost of insurance be- cause a) insurer risk exposure is greater b) interest to the insurer is increased while administrative cost are decreased c) mortality costs are greater d) interest to the insurer is decreased while the administrative costs are increased
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d) change the policy's interest rate Answer: D) change the policy's interest rate
- P is looking to purchase a life insurance policy that will pay a stated monthly income to his beneficiaries for 20 years after he dies and a lump sum of $20,000 at the end of that 20 year period. What type of policy should P purchase? a) family benefit policy b) family maintenance policy c) family income policy d) family survivor policy Answer: B) family maintenance policy
- Which situation allows the producer to also be the beneficiary on a client's application for life insurance? a) when no insurable interest exists b) with the insurer's written authorization c) when insurable interest exists d) never Answer: c) when insurable interest exists
- In order for coverage on a non-medical insurance application to take effect the same day, the producer must collect a signed application and a) a Medical Information Report b) the initial premium c) forward it immediately to the insurer d) attending physician statement Answer: B) the initial premium
- All of these are considered to be a benefit under Social Security, EXCEPT for: a) survivorship
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b) unemployment
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a) communication or materials used within an insurer's own organization b) newspapers c) free lunch seminars d) telemarketing scripts Answer: A) communication or materials used within an insurer's own organization
- If a producer offers to refund part of a prospect's premium in exchange for the purchase of a life insurance policy, the producer is committing the illegal act of a) rebating b) defamation c) twisting d) conservation Answer: A) rebating
- Which of these is NOT considered to be a cost connected with an individ- ual's death? a) funeral expense b) tax liability c) business expenses d) probate cost Answer: c) business expenses
- Which of the following correctly explains the actions an agent should take if a customer wants to apply for an insurance policy? a) have the customer sign a blank application, then take the application back to his office to complete prior to sending it off to the insurance company b) complete the application over the phone with the customer, sign the applica- tion for the customer, then send the application off to the insurance company c) complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the
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insurance company d) have the customer fill out the application and send it to his office for him to sign, then send it off to the insurance company Answer: c) complete the application and review the information with the customer prior to obtaining the customer's signature, then send the application off to the insurance company
- A primary beneficiary has died before the insured in a life insurance policy. A contingent beneficiary is also named in the policy. Which of the following will occur when the insured dies? a) proceeds will go to the primary beneficiary's estate b) probate will decide who receives proceeds c) proceeds will go to the contingent beneficiary d) proceeds will go to the insured's estate Answer: c) proceeds will go to the contingent beneficiary
- When a minor is designated as the sole primary beneficiary, a) a guardian will be court-appointed in the event of a death claim b) a contingent beneficiary must be named c) the minor has immediate access to all proceeds upon death of the insured d) it is known as a tertiary beneficiary Answer: A) a guardian will be court-appointed in the event of a death claim
- of personal life insurance premiums is usually deductible for fed- eral income tax purposes. a) 100% b) 75% c) 50% d) 0% Answer: D) 0%
- Upon policy delivery, a signed good health statement is requested from
