Colorado Life Insurance Exam Questions with Correct Answers

ColoradoLifeInsurance Exam Questions with v v v v v




Correct Answers 2025 v v v




ContinuousPremiumWhole Life - CORRECT ANSWER - v v v v v v v




Premiums are the same each year for the durationofthe policy, if policyowner continues to make payme nts
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they will receive cash value of policy.
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- Also called straight life or ordinary life
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- endows at age 100 v v v




Limited-PaymentWholeLife- CORRECTANSWER- v v v v v v




Allow for a lifetime of premiums to be paid ina shorter period of time
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- 10pay or 20 pay -Zpremiums payable in 10-20 level annual installments
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- life paid up at age 65 - level annual installments from dateof purchase to age 65
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- cashvalueaccumulatesfaster thancontinuouspremiumpolicy
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- endows at age 100 v v v




Single Premium Whole Life- CORRECT ANSWER -
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One paymentmade at time of purchase, covers allfuture costsof maintaining policy, create immediate ca sh
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value
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UniversalLife (UL) - CORRECT ANSWER - v v v v v v




Premiums are flexible, not fixed, and accumulate as interest inthe policy's cashvalue
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- only policyowner canchange death benefits
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- costof insuranceand feeswithdrawn monthly
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- option 1 - level death benefit, cash value rises quicker
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- option 2 - increasing death benefit plus cash account
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VariableLifeInsurance- CORRECT ANSWER- v v v v v v




Separateaccount insteadof guaranteed cashvalue,so thereis the insuranceandan investment account
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- to sell, one must have lifeinsurance and securitieslicenses
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- death benefit can increase, guaranteed benefit
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,VariableUniversalLife- CORRECTANSWER-Universallifewitha separateinvestmentaccount
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- death benefit will be paid as long as there is sufficient cash value to pay the costs of insurance
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- no guaranteeddeathbenefit
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Interest-Sensitive Whole Life - CORRECT ANSWER - v v v v v v




Cashvalue canincreasebeyond the stated guarantee if economic conditionsZwarrant
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- fixedlevel death benefit
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- interest rate can fluctuate with economy v v v v v




- cash value anddeath benefit can increase/grow
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Equity-Indexed Universal Life - CORRECT ANSWER - v v v v v v




Permanent lifeinsurance that allowspolicyholdersto tie accumulationvaluesto stock market,currentint erest
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on cash account
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LevelTermPolicy- CORRECTANSWER-
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Deathbenefit is level and equals the face amount throughout the termofcoverage, premium isZalso level
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Decreasing Term Policy - CORRECT ANSWER - v v v v v v




Deathbenefit declines over coverage perioduntil it reaches zero at endofterm, premium is level
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ReturnofPremium TermPolicy - CORRECTANSWER -
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Return all or part of premium paid for policy if insured is still alive at end of term, premium is higher and depends
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on percentage of premium returned (100%, 50%)
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Renewability - CORRECT ANSWER - v v v v




Term policy guaranteed to renew/extend with the same policy periodat endof the term, no new applicat ion
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required, premium changes with each renewal based on age
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Convertability- CORRECT ANSWER- v v v v




Term policy canbe converted to apermanent typeofpolicy, no new applicationrequired, must be conver ted
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before the term expires
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Premium for converted policy basedon one of two things:
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- attained age -Zinsured'sage at time of conversion v v v v v v v

, - original age - insured's age at time original policy was written
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Annuities - CORRECT ANSWER - v v v v




Upside downlife insurance,tax deferredsavingsforretirement, protectspeoplefromliving too long
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ImmediateAnnuities(SPIA)-ZCORRECTANSWER-Single lump- v v v v v v




sum premium, payments to insured canstart one month after orlatest delayof1 year, only interest part of
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payment is subject to tax
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Deferred Annuities (SPDA) -ZCORRECT ANSWER -v v v v v




Owner chooses amount and frequency of premium payments (flexible), accumulated funds canbe withdr awn
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at any time but may have surrender charge
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Fixed Annuities - CORRECTANSWER-
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Guaranteed against loss, supported by general account with assets,earninterest during accumulation pe riod,
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level payment during annuity period
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Variable Annuities- CORRECT ANSWER- v v v v v




Supported by investments, not guaranteed against loss, separate account with investment risks, value ex
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pressed in accumulation units (like shares), annuity units can fluctuate with investments which can adjust the
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payments to the insured, regulated as insurance and securities (dual regulation)
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Equity-Indexed Annuities (EIA) - CORRECT ANSWER - v v v v v v




Fixed, interest linkedtoequity index,guaranteesminimum interestrate(normally1- 3%),
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guarantees backed by insurer's general account
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Joint Life Policy - CORRECTANSWER -
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Covers two or more lives with death benefit beingZpaidwhen first insured dies, helps other spouse/insure d
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maintain a certain lifestyle
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SurvivorshipPolicy- CORRECT ANSWER - v v v v v




Covers two individualsand will pay death benefit when last insured dies, canhelp pay for estate settleme nts
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and other expenses after death
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