Colorado Life & Health Insurance 2024 Exam
Questions with Verified Answers |Latest 2024/2025
Traditional Whole Life - ✔✔ANSWER✔✔>>-Ordinary (Straight) Life
-Limited-Pay & Single-Premium Whole Life
-Adjustable Whole Life
Ordinary (Straight) Life - ✔✔ANSWER✔✔>>-Until 100 or Death, whichever comes first
-Permanent Protection
-Rates & benefits based on law of large numbers (Mortality Rate)
-Guaranteed, tax-deferred interest rate
-Premium level, company's risk goes down as cash value goes up
-Insurer keeps the cash value if death to offset risk
-Lowest net cost in long run
-Client has access to cash through cash surrender or policy loan
-Rates are per unit of protection (1,000 is 1 unit)---TEST
-Cash value is guaranteed
-Cash value will equal face amount at policy maturity
Accelerated Death Benefits - ✔✔ANSWER✔✔>>-Also known as Living Benefits Rider,
12 months or less
-Apply when insured gets a terminal illness
-Insurer will pay out a portion of death benefit
-Face amount paid to beneficiary at death is reduced by the amount paid out while living
-Money must be used to pay hospital bills
Life Insurance Policy Exclusion - ✔✔ANSWER✔✔>>-Protects insurance companies
-Aviation Exclusion, student pilot can be removed once insured has obtained certain
amount of hours
-War or Military, covered by military term insurance
-Life insurance policies have few exclusions
Producer - ✔✔ANSWER✔✔>>= Agent
Changes in the Application - ✔✔ANSWER✔✔>>Can never make changes unless the
applicants initials have changed
Consequences of Accepting an Incomplete Application - ✔✔ANSWER✔✔>>-
Constitutes a waiver, the voluntary act of giving up legal rights
-Estoppel- Inability to enforce legal rights once given up - 2 years
, Warranties and Representations on the Application - ✔✔ANSWER✔✔>>-
Representations required of applicants---TEST
-Misrepresentation of a material fact may void the policy = Concealment
-Fraud- lying, intent to deceive the company
Collecting Initial Premiums & Issuing Conditional Receipts - ✔✔ANSWER✔✔>>-
Producers gives applicant a conditional receipt
-C.O.D. Collect on delivery submittal applications
-No coverage exists since no premium has been paid
-Producer delivers policy and collects premium, now the coverage begins
-Producer also obtains a statement of good health
-Life and health producers never use binders-verbal agreement, they are not allowed
Disclosures at Point of Sale - ✔✔ANSWER✔✔>>-HIPAA
-HIV-Must have written informed consent and can only be disclosed to applicants doctor
-Credit Report -Must have written informed consent
HIPAA - ✔✔ANSWER✔✔>>-The privacy rule protects all individually identifiable health
information, Protected health information includes:
-Health data
-Name
-Address
-Social Security Number
-Birth Date
USA PATRIOT Act/Anti-Money Laundering - ✔✔ANSWER✔✔>>-2001
-Amends bank security act
-Requires every financial institution to file a currency transaction report (CTR) with the
Financial Crimes Enforcement Network (FinCEN) within the department of the treasury,
for each cash transaction that exceeds $10,000
-Requires the reporting of wire transfers in excess of $3,000
Insurable Interest - ✔✔ANSWER✔✔>>-Must exist at the time of application
-May be based on economics or kinship
Medical Information and Consumer Reports - ✔✔ANSWER✔✔>>-Verifies finances,
credit history, and character
-Verifies medical history through ordering Medical Information Bureau (MIB) report
-Insurers who are MIB members report adverse health information to them
-MIB procedures require a disclosure to the applicant of data in MIB files upon written
request of applicant
Fair Credit Reporting Act---TEST - ✔✔ANSWER✔✔>>-Federal law protecting
applicants privacy
-Applies when ordering consumer reports on applicants
Questions with Verified Answers |Latest 2024/2025
Traditional Whole Life - ✔✔ANSWER✔✔>>-Ordinary (Straight) Life
-Limited-Pay & Single-Premium Whole Life
-Adjustable Whole Life
Ordinary (Straight) Life - ✔✔ANSWER✔✔>>-Until 100 or Death, whichever comes first
-Permanent Protection
-Rates & benefits based on law of large numbers (Mortality Rate)
-Guaranteed, tax-deferred interest rate
-Premium level, company's risk goes down as cash value goes up
-Insurer keeps the cash value if death to offset risk
-Lowest net cost in long run
-Client has access to cash through cash surrender or policy loan
-Rates are per unit of protection (1,000 is 1 unit)---TEST
-Cash value is guaranteed
-Cash value will equal face amount at policy maturity
Accelerated Death Benefits - ✔✔ANSWER✔✔>>-Also known as Living Benefits Rider,
12 months or less
-Apply when insured gets a terminal illness
-Insurer will pay out a portion of death benefit
-Face amount paid to beneficiary at death is reduced by the amount paid out while living
-Money must be used to pay hospital bills
Life Insurance Policy Exclusion - ✔✔ANSWER✔✔>>-Protects insurance companies
-Aviation Exclusion, student pilot can be removed once insured has obtained certain
amount of hours
-War or Military, covered by military term insurance
-Life insurance policies have few exclusions
Producer - ✔✔ANSWER✔✔>>= Agent
Changes in the Application - ✔✔ANSWER✔✔>>Can never make changes unless the
applicants initials have changed
Consequences of Accepting an Incomplete Application - ✔✔ANSWER✔✔>>-
Constitutes a waiver, the voluntary act of giving up legal rights
-Estoppel- Inability to enforce legal rights once given up - 2 years
, Warranties and Representations on the Application - ✔✔ANSWER✔✔>>-
Representations required of applicants---TEST
-Misrepresentation of a material fact may void the policy = Concealment
-Fraud- lying, intent to deceive the company
Collecting Initial Premiums & Issuing Conditional Receipts - ✔✔ANSWER✔✔>>-
Producers gives applicant a conditional receipt
-C.O.D. Collect on delivery submittal applications
-No coverage exists since no premium has been paid
-Producer delivers policy and collects premium, now the coverage begins
-Producer also obtains a statement of good health
-Life and health producers never use binders-verbal agreement, they are not allowed
Disclosures at Point of Sale - ✔✔ANSWER✔✔>>-HIPAA
-HIV-Must have written informed consent and can only be disclosed to applicants doctor
-Credit Report -Must have written informed consent
HIPAA - ✔✔ANSWER✔✔>>-The privacy rule protects all individually identifiable health
information, Protected health information includes:
-Health data
-Name
-Address
-Social Security Number
-Birth Date
USA PATRIOT Act/Anti-Money Laundering - ✔✔ANSWER✔✔>>-2001
-Amends bank security act
-Requires every financial institution to file a currency transaction report (CTR) with the
Financial Crimes Enforcement Network (FinCEN) within the department of the treasury,
for each cash transaction that exceeds $10,000
-Requires the reporting of wire transfers in excess of $3,000
Insurable Interest - ✔✔ANSWER✔✔>>-Must exist at the time of application
-May be based on economics or kinship
Medical Information and Consumer Reports - ✔✔ANSWER✔✔>>-Verifies finances,
credit history, and character
-Verifies medical history through ordering Medical Information Bureau (MIB) report
-Insurers who are MIB members report adverse health information to them
-MIB procedures require a disclosure to the applicant of data in MIB files upon written
request of applicant
Fair Credit Reporting Act---TEST - ✔✔ANSWER✔✔>>-Federal law protecting
applicants privacy
-Applies when ordering consumer reports on applicants
