Colorado Life Insurance Study
Guide| Practice Questions and
Answers for a Guaranteed A+ |
2025/2026 Guide
An insured has had a life insurance policy that he purchased 3
years ago when he was 40 years old. He is killed in an
automobile accident and it is discovered that he is actually 45
years old, and not 43, as stated on the application. What will
the company do?
- Correct Answer - Pay a reduced death benefit, The
incontestability clause prevents an insurer from denying a claim
due to statements in an application after the policy has been in
force for 2 years. However, it does not apply to statements
relating to age, sex and identity.
The sole beneficiary of a life insurance policy dies before the
insured. If the policyowner fails to change the beneficiary
before the insured's death, the proceeds of the policy will go to:
- Correct Answer - The insured's estate. In the absence of a
,viable beneficiary, proceeds will be paid to the estate of the
insured.
In a survivorship life policy, when does the insurer pay the
death benefit?
- Correct Answer - Upon the last death, Survivorship life pays
on the last death rather than upon the first death.
Which of the following terms means a result of calculation
based on the average number of months the insured is
projected to live due to medical history and mortality factors?
- Correct Answer - Life expectancy, Life Expectancy is an
important concept in life settlement contracts. It refers to a
calculation based on the average number of months the
insured is projected to live due to medical history and mortality
factors (an arithmetic mean).
Children's riders attached to whole life policies are usually
issued as what type of insurance?
- Correct Answer - Term, Children's term riders provide term
insurance with coverage expiring when the minor reaches a
certain age.
, What is consideration in a policy?
- Correct Answer - Consideration is something of value that is
transferred between the two parties to form a legal contract.
Which of the following is correct concerning the taxation of
premiums in a key-person life insurance policy?
- Correct Answer - Premiums are not tax deductible as a
business expense. The business cannot take a tax deduction
for the expense of the premium. However, if the key employee
dies, the benefits paid to the business are usually received tax
free.
A domestic insurer issuing variable contracts must establish
one or more:
- Correct Answer - Separate accounts. Any domestic insurer
issuing variable contracts must establish one or more separate
accounts. The insurer must maintain in each separate account
assets with a value at least equal to the reserves and other
contract liabilities connected to the account.
Guide| Practice Questions and
Answers for a Guaranteed A+ |
2025/2026 Guide
An insured has had a life insurance policy that he purchased 3
years ago when he was 40 years old. He is killed in an
automobile accident and it is discovered that he is actually 45
years old, and not 43, as stated on the application. What will
the company do?
- Correct Answer - Pay a reduced death benefit, The
incontestability clause prevents an insurer from denying a claim
due to statements in an application after the policy has been in
force for 2 years. However, it does not apply to statements
relating to age, sex and identity.
The sole beneficiary of a life insurance policy dies before the
insured. If the policyowner fails to change the beneficiary
before the insured's death, the proceeds of the policy will go to:
- Correct Answer - The insured's estate. In the absence of a
,viable beneficiary, proceeds will be paid to the estate of the
insured.
In a survivorship life policy, when does the insurer pay the
death benefit?
- Correct Answer - Upon the last death, Survivorship life pays
on the last death rather than upon the first death.
Which of the following terms means a result of calculation
based on the average number of months the insured is
projected to live due to medical history and mortality factors?
- Correct Answer - Life expectancy, Life Expectancy is an
important concept in life settlement contracts. It refers to a
calculation based on the average number of months the
insured is projected to live due to medical history and mortality
factors (an arithmetic mean).
Children's riders attached to whole life policies are usually
issued as what type of insurance?
- Correct Answer - Term, Children's term riders provide term
insurance with coverage expiring when the minor reaches a
certain age.
, What is consideration in a policy?
- Correct Answer - Consideration is something of value that is
transferred between the two parties to form a legal contract.
Which of the following is correct concerning the taxation of
premiums in a key-person life insurance policy?
- Correct Answer - Premiums are not tax deductible as a
business expense. The business cannot take a tax deduction
for the expense of the premium. However, if the key employee
dies, the benefits paid to the business are usually received tax
free.
A domestic insurer issuing variable contracts must establish
one or more:
- Correct Answer - Separate accounts. Any domestic insurer
issuing variable contracts must establish one or more separate
accounts. The insurer must maintain in each separate account
assets with a value at least equal to the reserves and other
contract liabilities connected to the account.
