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
, b) whole life insurance
c) annuity
d) 401(k)
Answer: c) annuity
4. 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
5. 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
6. Which of these are NOT an example of a Nonforfeiture option?
a) extended term
, b) reduced paid-up
c) cash surrender
d) life income
Answer: D) life income
7. 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
8. 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
9. 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
objectives
d) determining the marital status of the applicant
, Answer: D) determining the marital status of the applicant
10. 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
11. 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
12. 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
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
, b) whole life insurance
c) annuity
d) 401(k)
Answer: c) annuity
4. 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
5. 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
6. Which of these are NOT an example of a Nonforfeiture option?
a) extended term
, b) reduced paid-up
c) cash surrender
d) life income
Answer: D) life income
7. 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
8. 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
9. 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
objectives
d) determining the marital status of the applicant
, Answer: D) determining the marital status of the applicant
10. 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
11. 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
12. 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
