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Colorado Life Insurance Final Exam – 95 Official-Style Questions with Answers 2025, Exams of Nursing

Western Colorado University(WCU)Nursing

Master the Colorado Life Insurance licensing exam with this complete guide featuring 95 multiple-choice questions and accurate answers. Covers policy types, annuities, state regulations, taxation, riders, and underwriting—ideal for pre-licensing and final exam preparation. colorado insurance exam, life insurance questions, state licensure prep, insurance final test, life insurance practice, insurance producer exam, insurance regulation quiz, annuities exam review, insurance prep printable, colorado life license

Typology: Exams

2024/2025

Available from 07/16/2025

LectStephen
LectStephen 🇺🇸

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Colorado Life Insurance Final Exam
Containing 95 Questions and Answers
A+ Score Guide
1. What approach calculates the amount of money a family needs immediately upon
the death of the insured to pay for their expenses and basic necessi- ties?
Answer> Needs
2. A decreasing term life policy would be the most appropriate for
Answer> A 41 year old lawyer who wants a policy to pay his mortgage if he dies
(decreasing term life generally is used as mortgage insurance)
3. A producer or business entity shall report to the Commissioner any admin-
istrative action taken against the producer within
Answer> 30 days
4. Richard is thinking about transferring some of the ownership rights of his
policy to his brother Randy. What term is used for this type of transfer?
Answer> Assignment
5. Jeff has limited financial resources, but finds himself in a position where he
needs a good deal of protection. A would probably best suit his
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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

Containing 95 Questions and Answers

A+ Score Guide

  1. What approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessi- ties? Answer> Needs
    1. A decreasing term life policy would be the most appropriate for Answer> A 41 year old lawyer who wants a policy to pay his mortgage if he dies (decreasing term life generally is used as mortgage insurance)
    2. A producer or business entity shall report to the Commissioner any admin- istrative action taken against the producer within Answer> 30 days
    3. Richard is thinking about transferring some of the ownership rights of his policy to his brother Randy. What term is used for this type of transfer? Answer> Assignment
    4. Jeff has limited financial resources, but finds himself in a position where he needs a good deal of protection. A would probably best suit his

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needs at this time. Answer> Term policy

  1. On November 5, Zoe fills out an application for a life policy. On November 6, the agent accepts the premium for the policy. The policy is delivered on November 7. Which date does the Free Look period start? Answer> November 7
  2. Insurance producers must complete how many hours of continuing edu- cation each licensing period? Answer> 24 hours
  3. Jacob, James and Jonathan are triplets, and all applied for the same type of insurance coverage at the same time. For James and Jonathan the rates were the same. Jacob's rate was quite a bit higher. What is the most likely reason for this difference? Answer> Risk classification
  4. The life insurance rider that pays the face amount plus the total premiums paid into the policy is known as Answer> Return of premium
  5. What kind of company can the Commissioner file a complaint to enjoin and restrain from continuing violations of the insurance regulations of Colorado?-

Answer> Foreign or alien

  1. Does a loan on the cash value of a life insurance policy accrue interest, and if so,

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  1. If more than one beneficiary is named, who is the first in line? Answer> Primary
  2. Application Answer> In life insurance, insurable interest must be present at the time of
  3. Over-funded life insurance policies where the proceeds are subject to taxation are called Answer> MECs (Modified Endowment Contracts)
  4. After what policy year of any life insurance policy, can suicide of the policyowner not be used as defense against the payment of benefits? Answer> First
  5. In Colorado, what is the minimum number of individuals a group life policy will cover? Answer> 3 individuals
  6. Which of the following is a duty of the Commissioner? Answer> Examining appli- cations and issuing certificates of authority to insurance companies to transact insurance business
  7. Dylan is looking at buying an equity-indexed life policy; it will likely be tied to Answer> Dow Jones Industrial Average.
  8. Who has the right to change the beneficiary on a life policy?

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Answer> The policy- owner

  1. What guarantees Jason the right to question the source and validity of consumer information used to rate a policy? Answer> Fair Credit Reporting Act
  2. If an applicant states their age is 30 on an application for life insurance, when they were actually 37, what is the insurer likely to do? Answer> Pay the death benefit based on the applicant's actual age.
  3. Which of the following must happen before an HIV test is performed on an applicant? Answer> A consent form must be signed by the applicant prior to the test.
  4. Which rider on Diane's life policy will help her out when she is confined to a nursing home with a terminal illness? Answer> Accelerated benefit rider
  5. Life insurance death benefits that can be accessed tax-free when the insured is still alive are called Answer> Accelerated benefits
  6. Which of the following would NOT be considered unfair discrimination? Answer> - Discrimination abased on occupation
  7. All of the following must be listed in the notice regarding replacement, EXCEPT Answer> Statement identifying preprinted sales materials

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  1. The Beauty Shop Cosmetic Company purchases a life insurance policy on Anna, the company's leading salesperson. Which business continuation plan does this company have? Answer> Key person insurance
  2. Blake died 20 days after his group life insurance coverage was terminated. He did not apply for individual coverage. Which of the following is true? Answer> His beneficiary will receive the full death benefit.
  3. Life insurance applications require a signature from Answer> A life insurance appli- cation requires the agent, proposed insured, and the policy owner if different from the insured to sign it.
  4. The manner in which the proceeds of a life policy are handled are specified in what provision? Answer> Settlement options
  5. If a license is revoked, an insurance producer will not be eligible to apply for a new license Answer> For 2 years
  6. The rider that you would pick if you want to be able to add coverage in the future, without having to show proof of insurability Answer> Guaranteed insurability
  7. From the date of death to the date of the claim settlement, the annual rate of interest paid on death benefits is what percentage above the federal discount rate? Answer> 2%
  8. Jamie has a renewable term policy. Which of the following is not an incor- rect statement about this type of policy. Answer> Renewability is the insurer's option.

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  1. What is the biggest source of information used in underwriting? Answer> Applica- tion
  2. Which of the following factors does not influence the amount that an individual receives as monthly income under Social Security? Answer> Sex
  3. On January 3, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on January 15. On January 20, the insurer issued the policy standard, and the producer delivers it on January
  4. When is coverage effective? Answer> January 22, after the statement of good health is signed, and the initial premium is paid.
  5. What are the two most common adjustments made during a month with a universal life insurance policy? Answer> Cost of death protection deducted and current interest rate credited
  6. An insurance applicant submits an application with a premium. After un- derwriting, the insurer sends back the policy, rated, with an impairment rider. What should the producer tell the applicant at delivery? Answer> Explain the issue and collect an additional premium.
  7. Kim's policy remained in force for a certain number of days even though she forgot to pay the premium. The provision that allows this is called Answer> The grace period provision
  8. No insurance producer may make statements which misrepresent any insurance policy as being Answer> Shares of stock
  9. How are dividends treated for tax purposes? Answer> Never taxed
  10. Errors & Omissions are most likely to occur during Answer> Delivery
  11. If after a hearing, the Commissioner finds that an infraction has occurred, he must

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  1. Dylan tells the insurer to keep the dividend and apply it to his next premi- um. He is using which dividend option? Answer> Reduction of premium
  2. The Insurance Commissioner may place an insurance producer on proba- tion, suspend, revoke, or refuse to issue or renew a license, order restitution to be paid, or order a civil penalty for all the following, EXCEPT Answer> Failing to pay federal income taxes
  3. Which of the following could be used to prevent a lapse in the payment of life insurance premiums? Answer> Automatic premium loan
  4. Which of the following groups is ineligible for group life insurance? Answer> A group formed for the purpose of obtaining insurance
  5. Colorado requires producers to avoid the use of all the following words, EXCEPT Answer> Death
  6. How often can the Commissioner conduct a financial examination of a licensed insurer? Answer> As often as he deems necessary
  7. The Colorado Insurance Fraud Statute designed to accomplish all of the following, EXCEPT Answer> To lower the cost of insurance
  8. How much time must a replacing insurer that uses producers be able to produce copies of the notification regarding replacement? Answer> At least 5 years or until the next examination by the Department, whichever is later
  9. An agent offering to waive the prospective client's first life insurance premium is engaging in which of the following unfair practices? Answer> Rebating
  10. The beneficiary designation that allows the policy to be changed without the beneficiary's consent Answer> Revocable

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  1. An insurance producer includes which of the following people? Answer> A person who solicits, negotiates, effects, procures, delivers, renews, or continues policies of insurance in Colorado
  2. In a life policy, a statement of good health is needed when Answer> The application does not include the premium
  3. Which of the following is NOT an unfair claim settlement or compromise practice? Answer> Asking for the insured's signature on claim documents
  4. Becky is a 31 years old and knows she needs to start a retirement plan. She currently works in a bakery and is worried about how inflation would affect her retirement plan. Which annuity would be a good fit for her needs? Answer> Flexible premium deferred annuity
  5. An insurance application is not complete unless it has Answer> The signature of the insured (unless not an adult), and the agent.
  6. Unauthorized practice of insurance is a Answer> Class 1 Misdemeanor
  7. What type of premiums payment can employers deduct as an ordinary business expense? Answer> Group

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Answer> Tell the prospective client that a claim might be rejected later due to the omission.

  1. If James has an increasing term policy, which of the following must in- crease? Answer> The death benefit
  2. Which type of life policy would best suit someone who retires in good health with a large amount of cash, whose investment goals are conserva- tive? Answer> Single premium whole life insurance
  3. What must the insurer provide the buyer with when procuring an applica- tion for life insurance? Answer> Buyer's Guide and disclosure document