COLORADO LIFE INSURANCE CORE EXAMS SHEET
QUESTIONS AND ANSWERS 2025/2026
✔✔Interest Income (Only) Settlement Option - ✔✔Insurer retains death benefit and
pays stated amount of interest on money, interest paid to beneficiary at regular
intervals, death benefit paid at later late
✔✔Fixed Period Settlement Option - ✔✔Pays both an amount of principal and interest
to the beneficiary over certain stated period of time, if interest is greater than
guaranteed rate the final payment will be larger
✔✔Fixed Amount Settlement Option - ✔✔Proceeds will be paid in a fixed amount over
time to beneficiary until both principal and interest have been completely paid to
beneficiary, beneficiary can increase or decrease payment amount or change
settlement plan altogether, if interest greater than guaranteed rate the length of
payment period will be extended
✔✔Life Income Settlement Option - ✔✔Similar to annuity, beneficiary guaranteed to
receive an income for the rest of their life and can be shared with another individual
- Life only - pay largest amount as long as they live, stops when they die
- Life with period certain - chooses a payment period, if they die in that period payments
continue to be made to another person until the period end
- Life with refund - total payments guaranteed to be death benefit amount, payments
continue to another person if death occurs before benefits end
- Joint-and-survivor life - 2 beneficiaries will receive payments as long as either lives, if
one dies payment to other may be reduced
✔✔Policy Loans - ✔✔Policy loan provision- access cash value without surrendering the
policy, no credit check, lower interest rate, any repayment plan, policy lapses when loan
and interest exceed cash value
✔✔Automatic Premium Loan Provision - ✔✔If insured fails to pay policy premium by
end of grace period, insurer will pay premium with policy loan until the cash value falls
below premium amount, then policy will lapse
✔✔Withdrawals/Partial Surrenders - ✔✔Cannot be repaid, reduction of cash value and
cash amount, only allowed on universal life, charges/fees apply
✔✔Policy Dividends - ✔✔Participating life policies, refund of portion of premium, not
guaranteed, not taxable
- life policies without dividends are nonparticipating
- difference between gross premium charged and actual experience of insurer
- options - CARPPO
✔✔CARPPO - ✔✔Cash
, Accumulate interest - left with insurer to earn interest
Reduced premium
Paid up additions - annual dividends used to purchase additional amount of life
insurance
Paid up insurance - applied to annual premium
One-year term insurance - may be used to buy one-year term insurance equal to
policy's cash value
✔✔Nonforfeiture Options - ✔✔Allows insured to receive all or portion of benefits or
partial refund on premiums paid if a payment is missed
- Cash surrender - policy cancelled and insured receives current cash value
- Reduced paid-up insurance - buy new single premium policy with less face value than
old policy
- Extended term insurance - buy new single premium term insurance with same face
value and old policy
✔✔Life Insurance Policy Provision - ✔✔Terms of life insurance policy, rights,
obligations, and how certain common situations will be handled
✔✔Free Look - ✔✔Period of time to return policy for any reason within 10 days of
delivery and receive all premiums paid
✔✔Insuring Clause - ✔✔Also called insuring agreement, insurer's promise to pay
benefits upon insured's death, what will be paid, amount, and to whom
✔✔Ownership Rights - ✔✔Owner can exercise all policy rights and privileges without
consent of any beneficiary
- choose and change beneficiary (if not irrevocable)
- select settlement/conversion/nonforfeiture options
- receive/borrow any cash values and/or dividends
- cancel the policy
- assign or transfer ownership of policy
- select or change premium payment mode
- receive policy proceeds upon maturity or endowment
✔✔Assignment - ✔✔Transfer of owner's rights to another individual or entity
✔✔Collateral Assignment (Temporary/Conditional) - ✔✔Does not change ownership of
policy, like a pledge for a loan
✔✔Absolute/Permanent Assignment - ✔✔Transfers all rights of ownership to another
person or entity, permanent change
✔✔Entire Contract - ✔✔Life insurance policy, a copy of the original application, and any
riders or amendments
QUESTIONS AND ANSWERS 2025/2026
✔✔Interest Income (Only) Settlement Option - ✔✔Insurer retains death benefit and
pays stated amount of interest on money, interest paid to beneficiary at regular
intervals, death benefit paid at later late
✔✔Fixed Period Settlement Option - ✔✔Pays both an amount of principal and interest
to the beneficiary over certain stated period of time, if interest is greater than
guaranteed rate the final payment will be larger
✔✔Fixed Amount Settlement Option - ✔✔Proceeds will be paid in a fixed amount over
time to beneficiary until both principal and interest have been completely paid to
beneficiary, beneficiary can increase or decrease payment amount or change
settlement plan altogether, if interest greater than guaranteed rate the length of
payment period will be extended
✔✔Life Income Settlement Option - ✔✔Similar to annuity, beneficiary guaranteed to
receive an income for the rest of their life and can be shared with another individual
- Life only - pay largest amount as long as they live, stops when they die
- Life with period certain - chooses a payment period, if they die in that period payments
continue to be made to another person until the period end
- Life with refund - total payments guaranteed to be death benefit amount, payments
continue to another person if death occurs before benefits end
- Joint-and-survivor life - 2 beneficiaries will receive payments as long as either lives, if
one dies payment to other may be reduced
✔✔Policy Loans - ✔✔Policy loan provision- access cash value without surrendering the
policy, no credit check, lower interest rate, any repayment plan, policy lapses when loan
and interest exceed cash value
✔✔Automatic Premium Loan Provision - ✔✔If insured fails to pay policy premium by
end of grace period, insurer will pay premium with policy loan until the cash value falls
below premium amount, then policy will lapse
✔✔Withdrawals/Partial Surrenders - ✔✔Cannot be repaid, reduction of cash value and
cash amount, only allowed on universal life, charges/fees apply
✔✔Policy Dividends - ✔✔Participating life policies, refund of portion of premium, not
guaranteed, not taxable
- life policies without dividends are nonparticipating
- difference between gross premium charged and actual experience of insurer
- options - CARPPO
✔✔CARPPO - ✔✔Cash
, Accumulate interest - left with insurer to earn interest
Reduced premium
Paid up additions - annual dividends used to purchase additional amount of life
insurance
Paid up insurance - applied to annual premium
One-year term insurance - may be used to buy one-year term insurance equal to
policy's cash value
✔✔Nonforfeiture Options - ✔✔Allows insured to receive all or portion of benefits or
partial refund on premiums paid if a payment is missed
- Cash surrender - policy cancelled and insured receives current cash value
- Reduced paid-up insurance - buy new single premium policy with less face value than
old policy
- Extended term insurance - buy new single premium term insurance with same face
value and old policy
✔✔Life Insurance Policy Provision - ✔✔Terms of life insurance policy, rights,
obligations, and how certain common situations will be handled
✔✔Free Look - ✔✔Period of time to return policy for any reason within 10 days of
delivery and receive all premiums paid
✔✔Insuring Clause - ✔✔Also called insuring agreement, insurer's promise to pay
benefits upon insured's death, what will be paid, amount, and to whom
✔✔Ownership Rights - ✔✔Owner can exercise all policy rights and privileges without
consent of any beneficiary
- choose and change beneficiary (if not irrevocable)
- select settlement/conversion/nonforfeiture options
- receive/borrow any cash values and/or dividends
- cancel the policy
- assign or transfer ownership of policy
- select or change premium payment mode
- receive policy proceeds upon maturity or endowment
✔✔Assignment - ✔✔Transfer of owner's rights to another individual or entity
✔✔Collateral Assignment (Temporary/Conditional) - ✔✔Does not change ownership of
policy, like a pledge for a loan
✔✔Absolute/Permanent Assignment - ✔✔Transfers all rights of ownership to another
person or entity, permanent change
✔✔Entire Contract - ✔✔Life insurance policy, a copy of the original application, and any
riders or amendments
