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Colorado Life Insurance Final Exam – 95 Official-Style Questions with Answers, 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. An agent gives a conditional receipt to a client for an insurance policy after
collecting the initial premium. When will the policy become effective?
a) when the policy is issued
b) the date of policy delivery
c) when the conditions of the receipt are met
d) the date the sales appointment was set
Answer: c) when the conditions of the receipt are met
2. In Colorado, a life insurance applicant has days after policy delivery
for a full refund of premium if not satisfied for any reason.
a) 10
b) 15
c) 20
d) 25
Answer: B) 15
3. Which type of contract liquidates an estate through recurrent payments?
a) universal life insurance
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Download Colorado Life Insurance Final Exam – 95 Official-Style Questions with Answers 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. An agent gives a conditional receipt to a client for an insurance policy after collecting the initial premium. When will the policy become effective? a) when the policy is issued b) the date of policy delivery c) when the conditions of the receipt are met d) the date the sales appointment was set Answer: c) when the conditions of the receipt are met
  2. In Colorado, a life insurance applicant has days after policy delivery for a full refund of premium if not satisfied for any reason. a) 10 b) 15 c) 20 d) 25 Answer: B) 15
    1. Which type of contract liquidates an estate through recurrent payments? a) universal life insurance

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b) whole life insurance c) annuity d) 401(k) Answer: c) annuity

  1. 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
  2. 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
  3. Which of these are NOT an example of a Nonforfeiture option? a) extended term

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Answer: D) determining the marital status of the applicant

  1. Which of the following is required for a life insurance Lapse Notice? a) reason stated why the policy will lapse b) notice mailed to policyowner within 10 days before the effective date of lapse c) notice mailed to policyowner within 30 days before the effective date of lapse d) automatic premium loan explanation Answer: A) reason stated why the policy will lapse
  2. An architecture firm would stand to lose a lot of money in the event of the death of its project manager. Which type of policy should the firm purchase on its project manager? a) universal life insurance b) key person insurance c) graded insurance d) executive insurance Answer: B) key person insurance
  3. The purpose of the Period clause is to avoid an unintentinoal lapse of a life insurance policy. a) grace b) incontestable c) conversion d) reinstatement Answer: A) grace

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  1. 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
  2. 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
  3. 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 c) MUST make half-payments to the beneficiary d) has the option to continue making payments based on what has already

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  1. When may the Commissioner issue an emergency cease and desist order? a) if ther is suspicion of an insurance policy being replace b) if there is suspicion of an unauthorized person engaging in insurance business without being licensed c) when an insurance agency does not reach their annual sales quota d) for any reason the Commissioner sees appropriate Answer: B) if there is suspicion of an unauthorized person engaging in insurance business without being licensed
  2. Which of the following offers an insurance applicant the right to review the contract and receive a full refund? a) free-look period b) probation period c) elimination period d) refund period Answer: A) free-look period
  3. Which of these provisions require proof of insurability after a policy has lapsed? a) insuring b) conversion c) reinstatement d) consideration Answer: c) reinstatement
    1. What advantage does the renewability feature give to a term policy?

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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

  1. 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
  2. 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 least 10 years Answer: A) the replacing insurer must maintain copies of all records regarding

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ment years Answer: A) the systematic liquidation of accumulated funds

  1. A Variable Annuity has which of the following characteristics? a) underlying equity investments b) only available with Single Premium c) offers a fixed interest rate d) does not require an insurance license Answer: A) underlying equity investments
  2. Which of the following is an example of defamation? a) a pamphlet listing a competitor's financial rating b) a brochure including an untrue statement regarding a competitor's ability to pay claims c) a verbal statement of a competitor's complaint ratio d) a truthful estimate of the dividends Answer: B) a brochure including an untrue state- ment regarding a competitor's ability to pay claims
  3. 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
  4. A(n) beneficiary may be charged by the policyowner WITHOUT the consent of the beneficiary. a) revocable b) irrevocable c) tertiary d) replaceable

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Answer: A) revocable

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Answer: D) interest to the insurer is decreased while the administrative costs are increased

  1. K is shopping for a permanent life insurance policy that will offer her the MOST protection per dollar of annual premium. Which of these policies best fits her needs? a) endowment b) straight life c) 10-Year Renewable Term d) Joint life Answer: B) straight life
    1. A Term Life rider offers the insured a) additional life coverage b) cash value c) long-term care coverage d) disability protection Answer: A) additional life coverage
  2. The payments on Q's annuity are no less than $250 quarterly. Which of the following annuities does Q own? a) immediate fixed b) quarterly flexible c) flexible installment deferred d) adjustable deferred Answer: c) flexible installment deferred
  3. A company that owns a life insurance policy on one of its key employees may do all of the following EXCEPT a) borrow against cash value b) change beneficiary c) cancel policy

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d) change the policy's interest rate Answer: D) change the policy's interest rate

  1. 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
  2. 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
  3. 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
  4. All of these are considered to be a benefit under Social Security, EXCEPT for: a) survivorship

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c) disability d) retirement Answer: B) unemployment

  1. The type of annuity that must be purchased with one monetary deposit is called a(n): a) single deposit annuity b) variable annuity c) fixed annuity d) immediate annuity Answer: D) immediate annuity
  2. A producer license may be suspended or revoked if the producer is found to be engaging in a) misrepresentation b) converting a term life policy to a whole life policy c) selling with a nonresident license d) replacement Answer: A) misrepresentation
  3. T and S are named co-primary beneficiaries on a $500,000 Accidental Death and Dismemberment policy insuring their father. Their mother was named contingent beneficiary. Five years later, S dies of natural causes and the father is killed in a scuba accident shortly afterwards. How much of the death benefit will the mother receive? a) $1,000, b) $500,000 c) $250, d) $ Answer: D) $
    1. All of the following are considered a form of advertisement EXCEPT

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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

  1. 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
  2. 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
  3. 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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the applicant. Why would this be necessary? a) the applicant chose an annual premium mode

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b) the applicant is suspected of making a material misrepresentation c) the initial premium was submitted with the application d) the initial premium was NOT submitted with the application Answer: D) the initial premium was NOT submitted with the application

  1. A fiduciary responsibility is defined as a) the responsibility the producer has to the appointing insurer b) the responsibility of the insured to pay premiums in a timely fashion c) a relationship of special trust and confidence when a person is entrusted with another's funds d) the relationship between the broker and the insurer whose products are sold Answer: c) a relationship of special trust and confidence when a person is entrusted with another's funds
  2. Which of the following is CORRECT regarding a producer's fiduciary responsibility with client's funds? a) a producer may commingle personal funds with funds paid by or to a client with the client's written permission b) a producer may commingle personal funds with funds paid by or to a client with the insurer's written permission c) a producer may commingle personal funds with funds paid by or to a client with prior approval from the Department of Insurance d) a producer may never commingle personal funds with funds paid by or to a client Answer: D) a producer may never commingle personal funds with funds paid by or to a client
  3. From what point must the insurer pay interest on the proceeds of a death claim? a) date insurer is notified of the death claim b) date claim is received by insurer