COLORADO LIFE INSURANCE COMPREHESIVE TEST EXAMS
QUESTIONS AND ANSWERS 2025/2026
✔✔Offer and acceptance - ✔✔- An offer is made when the applicant submits an
application for insurance to the insurance company
- The offer is accepted after it has been approved by the insurance companies
underwriters.
✔✔Consideration - ✔✔something of value each party gives to the other
✔✔Certificate of authority - ✔✔A license issued to an insurer by a department of
insurance which authorizes that company company to conduct insurance business in
that state
✔✔Reinsurance - ✔✔The acceptance by one more insurer of a portion of the risk
underwritten by another insurer who has contracted for the entire coverage
✔✔Concealment - ✔✔The failure to disclose known material fact
✔✔Misrepresentation - ✔✔A false statement made by an applicant that would influence
an insurer in determining whether or not to accept the risk
✔✔Endowment - ✔✔Cash sums build faster premiums too extreme for some
✔✔Universal Whole Life - ✔✔Combines insurance + investment Universal indicates
flexible premium
✔✔Variable Universal Life - ✔✔Combines investment+ term
✔✔Variable Whole Life - ✔✔Fixed level premium
✔✔Cash Value - ✔✔Death Benefit
✔✔Maturity Date - ✔✔The date the benefit is able to be paid for full face amount
✔✔Accelerated Death Benefits - ✔✔Must have a terminal illness to qualify
✔✔How is Accumulated interest taxed - ✔✔As ordinary income
✔✔Principal Sum - ✔✔Death benefit paid under accidental death coverage
✔✔Dividends paid from a life insurance policy are __________? - ✔✔issued by the
insurer
, ✔✔Additional coverage can be added by _______? - ✔✔Decreasing Term Rider
✔✔Surrender charges are ___ - ✔✔Deducted when the policy is discontinued
✔✔Modified Whole Life Premiums - ✔✔Start lower for the first 3-5 years
✔✔1035 Exchange - ✔✔Allows postponement of tax consequences
✔✔Treaty - ✔✔What Type of reinsurance contract involves two companies
automatically sharing their risk exposure
✔✔Fiduciary Responsibility - ✔✔Taking receipt of premiums and holding them for the
insurance company is an example of:
✔✔All of the following are parties to a life insurance contract EXCEPT:
-Insurer
-Underwriter
-Beneficiary
-Owner
-Insured - ✔✔Underwriter, Beneficiary, and Owner
✔✔Which of the following will have to meet an insurable interest requirement in order
for a policy to issue?
a. Beneficiary
b. Insured
c. Insured's dependents
d. All of the above
e. Both a and b only - ✔✔Beneficiary
✔✔Jack and his wife Lyn just purchased a home with a 15-year mortgage. Wanting to
make sure that Lyn would be able to pay off the mortgage balance in the event of Jack's
death, Jack had a "temporary" need for life insurance. What type of policy should Jack
purchase?
a. Whole Life Insurance
b. Term Life Insurance
c. Variable Life Insurance
d. A Viatical Settlement - ✔✔Term Life Insurance
✔✔Which type of life insurance is considered to be more risky based on its investment
component?
a. Level Term Life Insurance
b. Whole Life Insurance
c. Decreasing Term Life Insurance
QUESTIONS AND ANSWERS 2025/2026
✔✔Offer and acceptance - ✔✔- An offer is made when the applicant submits an
application for insurance to the insurance company
- The offer is accepted after it has been approved by the insurance companies
underwriters.
✔✔Consideration - ✔✔something of value each party gives to the other
✔✔Certificate of authority - ✔✔A license issued to an insurer by a department of
insurance which authorizes that company company to conduct insurance business in
that state
✔✔Reinsurance - ✔✔The acceptance by one more insurer of a portion of the risk
underwritten by another insurer who has contracted for the entire coverage
✔✔Concealment - ✔✔The failure to disclose known material fact
✔✔Misrepresentation - ✔✔A false statement made by an applicant that would influence
an insurer in determining whether or not to accept the risk
✔✔Endowment - ✔✔Cash sums build faster premiums too extreme for some
✔✔Universal Whole Life - ✔✔Combines insurance + investment Universal indicates
flexible premium
✔✔Variable Universal Life - ✔✔Combines investment+ term
✔✔Variable Whole Life - ✔✔Fixed level premium
✔✔Cash Value - ✔✔Death Benefit
✔✔Maturity Date - ✔✔The date the benefit is able to be paid for full face amount
✔✔Accelerated Death Benefits - ✔✔Must have a terminal illness to qualify
✔✔How is Accumulated interest taxed - ✔✔As ordinary income
✔✔Principal Sum - ✔✔Death benefit paid under accidental death coverage
✔✔Dividends paid from a life insurance policy are __________? - ✔✔issued by the
insurer
, ✔✔Additional coverage can be added by _______? - ✔✔Decreasing Term Rider
✔✔Surrender charges are ___ - ✔✔Deducted when the policy is discontinued
✔✔Modified Whole Life Premiums - ✔✔Start lower for the first 3-5 years
✔✔1035 Exchange - ✔✔Allows postponement of tax consequences
✔✔Treaty - ✔✔What Type of reinsurance contract involves two companies
automatically sharing their risk exposure
✔✔Fiduciary Responsibility - ✔✔Taking receipt of premiums and holding them for the
insurance company is an example of:
✔✔All of the following are parties to a life insurance contract EXCEPT:
-Insurer
-Underwriter
-Beneficiary
-Owner
-Insured - ✔✔Underwriter, Beneficiary, and Owner
✔✔Which of the following will have to meet an insurable interest requirement in order
for a policy to issue?
a. Beneficiary
b. Insured
c. Insured's dependents
d. All of the above
e. Both a and b only - ✔✔Beneficiary
✔✔Jack and his wife Lyn just purchased a home with a 15-year mortgage. Wanting to
make sure that Lyn would be able to pay off the mortgage balance in the event of Jack's
death, Jack had a "temporary" need for life insurance. What type of policy should Jack
purchase?
a. Whole Life Insurance
b. Term Life Insurance
c. Variable Life Insurance
d. A Viatical Settlement - ✔✔Term Life Insurance
✔✔Which type of life insurance is considered to be more risky based on its investment
component?
a. Level Term Life Insurance
b. Whole Life Insurance
c. Decreasing Term Life Insurance
