Colorado Life Insurance
Final Exam Study Guide
A+ Score Guide
1. Continuous Premium Whole Life
Premiums are the same each year for the
Answer
duration of the policy, if policyowner continues to make payments they will receive cash
value of policy.
- Also called straight life or ordinary life
- endows at age 100
2. Limited-Payment Whole Life
Allow for a lifetime of premiums to be paid in a shorter period of time
Answer
- 10 pay or 20 pay - premiums payable in 10-20 level annual installments
- life paid up at age 65 - level annual installments from date of purchase to age 65
- cash value accumulates faster than continuous
premium policy
- endows at age 100
3. Single Premium Whole Life
, One payment made at time of purchase, covers all future costs of
Answer
maintaining policy, create immediate cash value
, 4. Universal Life (UL)
Premiums are flexible, not fixed, and accumulate as interest in the policy's
Answer
cash value
- only policyowner can change death benefits
- cost of insurance and fees withdrawn monthly
- option 1 - level death benefit, cash value rises quicker
- option 2 - increasing death benefit plus cash account
5. Variable Life Insurance
Separate account instead of guaranteed cash value, so there is the
Answer
insurance and an investment account
- to sell, one must have life insurance and securities licenses
- death benefit can increase, guaranteed benefit
6. Variable Universal Life
Universal life with a separate investment account
Answer
- death benefit will be paid as long as there is sufficient cash value to pay the costs of
insurance
- no guaranteed death benefit
7. Interest-Sensitive Whole Life
Cash value can increase beyond the stated guar- antee if economic
Answer
conditions warrant
- fixed level death benefit
- interest rate can fluctuate with economy
- cash value and death benefit can increase/grow
Final Exam Study Guide
A+ Score Guide
1. Continuous Premium Whole Life
Premiums are the same each year for the
Answer
duration of the policy, if policyowner continues to make payments they will receive cash
value of policy.
- Also called straight life or ordinary life
- endows at age 100
2. Limited-Payment Whole Life
Allow for a lifetime of premiums to be paid in a shorter period of time
Answer
- 10 pay or 20 pay - premiums payable in 10-20 level annual installments
- life paid up at age 65 - level annual installments from date of purchase to age 65
- cash value accumulates faster than continuous
premium policy
- endows at age 100
3. Single Premium Whole Life
, One payment made at time of purchase, covers all future costs of
Answer
maintaining policy, create immediate cash value
, 4. Universal Life (UL)
Premiums are flexible, not fixed, and accumulate as interest in the policy's
Answer
cash value
- only policyowner can change death benefits
- cost of insurance and fees withdrawn monthly
- option 1 - level death benefit, cash value rises quicker
- option 2 - increasing death benefit plus cash account
5. Variable Life Insurance
Separate account instead of guaranteed cash value, so there is the
Answer
insurance and an investment account
- to sell, one must have life insurance and securities licenses
- death benefit can increase, guaranteed benefit
6. Variable Universal Life
Universal life with a separate investment account
Answer
- death benefit will be paid as long as there is sufficient cash value to pay the costs of
insurance
- no guaranteed death benefit
7. Interest-Sensitive Whole Life
Cash value can increase beyond the stated guar- antee if economic
Answer
conditions warrant
- fixed level death benefit
- interest rate can fluctuate with economy
- cash value and death benefit can increase/grow
