Life Insurance Colorado Exam Questions AND Correct Answers
accelerated benefits - ✔✔Riders attached to life insurance
policies which allow death benefits to be used to cover
nursing or convalescent home expenses.
accidental death benefits - ✔✔A policy rider that states that
the cause of death will be analyzed to determine if it
complies with the policy description of accidental death.
accidental death insurance - ✔✔An insurance policy that
provides payment if the insured's death is the result of an
accident.
Accumulation Period - ✔✔The time before an annuitant's
retirement during which the annuitant is making payments or
investments in an annuity.
actual cash value ACV - ✔✔The required amount to pay
damages or for property loss, which is calculated based on
the property's current replacement value minus depreciation.
Adhesion - ✔✔A contract offered on a take-it-or-leave-it basis
by an insurer, in which the insured's only option is to either
accept or reject the contract. Any ambiguities in the contract
will be settled in favor of the insured.
,Adjustable Life - ✔✔Life insurance which permits changes in
the face amount, premium amount, period of protection, and
the duration of the premium payment period.
Adjuster - ✔✔A representative of an insurance company who
investigates and acts on the behalf of the company to obtain
agreements for the amount of the insurance claim.
administrator - ✔✔an individual appointed by a court as a
fiduciary to settle the financial affairs an estate of a deceased
person
Admitted (authorized) insurer - ✔✔An insurance company
authorized and licensed to transact business in a particular
state.
adverse selection - ✔✔the tendency of risks with higher
probability of loss to purchase and maintain Insurance more
often than the risk Who present lower probability
agency - ✔✔an insurance sales office or company
Agent - ✔✔an individual who is licensed to sell, negotiate, or
affect insurance contracts on behalf of the insurer
,agent appointment - ✔✔the authorization of an agent to act
for or represent an insurer
Agent's Authority - ✔✔Special powers granted to an agent by
his or her agency contract.
Aleatory Contract - ✔✔a contract in which participating
parties exchange unequal amounts. Insurance contracts are
aleatory in that the amount the insured will pay in premiums
is unequal to the amount the insurer will pay in the event of
a loss.
Alien Insurer - ✔✔An insurance company that is incorporated
outside the United States.
annual statement - ✔✔A detailed financial report that an
insurance company must submit every year to the insurance
department of state(s) in which it conducts business.
annuity - ✔✔a contract that provides income for a specified
period of years, or for life.
Apparent Authority - ✔✔The appearance or the assumption of
authority based on the actions, words, or deeds of the
principal or because of circumstances the principal created.
, applicant - ✔✔a person making application for, or offering
himself, herself or another to be insured under an insurance
contract.
application - ✔✔a document that provides information for
underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer.
assignment - ✔✔the transfer of ownership rights of a life
insurance policy from one person to another.
Attained Age - ✔✔The age of the insured at a determined
date.
attending physician statement APS - ✔✔A statement usually
obtained from the applicant's doctor.
authorized (admitted) insurer - ✔✔An insurance company
authorized and licensed to transact business in a particular
state.
Avoidance - ✔✔a method of dealing with Risk by deliberately
keeping away from it (E.G. if a person wanted to avoid the
risk of being killed in an airplane crash, he or she might
choose to never fly in a plane).
accelerated benefits - ✔✔Riders attached to life insurance
policies which allow death benefits to be used to cover
nursing or convalescent home expenses.
accidental death benefits - ✔✔A policy rider that states that
the cause of death will be analyzed to determine if it
complies with the policy description of accidental death.
accidental death insurance - ✔✔An insurance policy that
provides payment if the insured's death is the result of an
accident.
Accumulation Period - ✔✔The time before an annuitant's
retirement during which the annuitant is making payments or
investments in an annuity.
actual cash value ACV - ✔✔The required amount to pay
damages or for property loss, which is calculated based on
the property's current replacement value minus depreciation.
Adhesion - ✔✔A contract offered on a take-it-or-leave-it basis
by an insurer, in which the insured's only option is to either
accept or reject the contract. Any ambiguities in the contract
will be settled in favor of the insured.
,Adjustable Life - ✔✔Life insurance which permits changes in
the face amount, premium amount, period of protection, and
the duration of the premium payment period.
Adjuster - ✔✔A representative of an insurance company who
investigates and acts on the behalf of the company to obtain
agreements for the amount of the insurance claim.
administrator - ✔✔an individual appointed by a court as a
fiduciary to settle the financial affairs an estate of a deceased
person
Admitted (authorized) insurer - ✔✔An insurance company
authorized and licensed to transact business in a particular
state.
adverse selection - ✔✔the tendency of risks with higher
probability of loss to purchase and maintain Insurance more
often than the risk Who present lower probability
agency - ✔✔an insurance sales office or company
Agent - ✔✔an individual who is licensed to sell, negotiate, or
affect insurance contracts on behalf of the insurer
,agent appointment - ✔✔the authorization of an agent to act
for or represent an insurer
Agent's Authority - ✔✔Special powers granted to an agent by
his or her agency contract.
Aleatory Contract - ✔✔a contract in which participating
parties exchange unequal amounts. Insurance contracts are
aleatory in that the amount the insured will pay in premiums
is unequal to the amount the insurer will pay in the event of
a loss.
Alien Insurer - ✔✔An insurance company that is incorporated
outside the United States.
annual statement - ✔✔A detailed financial report that an
insurance company must submit every year to the insurance
department of state(s) in which it conducts business.
annuity - ✔✔a contract that provides income for a specified
period of years, or for life.
Apparent Authority - ✔✔The appearance or the assumption of
authority based on the actions, words, or deeds of the
principal or because of circumstances the principal created.
, applicant - ✔✔a person making application for, or offering
himself, herself or another to be insured under an insurance
contract.
application - ✔✔a document that provides information for
underwriting purposes. After the policy is issued, any
unanswered questions are considered waived by the insurer.
assignment - ✔✔the transfer of ownership rights of a life
insurance policy from one person to another.
Attained Age - ✔✔The age of the insured at a determined
date.
attending physician statement APS - ✔✔A statement usually
obtained from the applicant's doctor.
authorized (admitted) insurer - ✔✔An insurance company
authorized and licensed to transact business in a particular
state.
Avoidance - ✔✔a method of dealing with Risk by deliberately
keeping away from it (E.G. if a person wanted to avoid the
risk of being killed in an airplane crash, he or she might
choose to never fly in a plane).
