Colorado Life and Health Insurance 2025 Exam Questions with Correct Answers

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Exam Questions with Correct Answers
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Dividends payable to a policy owner are... - CORRECT ANSWER -declared by the insurance company.
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Which of these describe a participating insurance policy?
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a) policy owners are entitled to receive dividends
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b) policy owners pay assessments for company losses
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c) stock companies allow policy owners to share in any company earnings
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d) policy owners are not entitled to vote for members of the board of directors - CORRECT ANSWER -
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a) policy owners are entitled to receive dividends
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At what point must a life insurance applicant be informed of their rights that fall under the Fair Credit R eporting
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Act? - CORRECT ANSWER -Upon the completion of application
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An insurance applicant must be informed of an investigation regarding his/her reputaion and character
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according to the... - CORRECT ANSWER -Fair Credit Reporting Act
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What type of reinsurance contract involves two companies automatically sharingAtheir risk exposure? -
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CORRECT ANSWER -Treaty
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What is the name of the law that requires insurers to disclose information gathering practices and wher e
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the information was obtained? - CORRECT ANSWER -Fair Credit Reporting Act
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What year was the McCarran-Ferguson Act enacted? - CORRECT ANSWER -1945
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Q purchases a $500,000 life insurance policy and pays $900 in premiums over the first six months. Q di es
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suddenly and the beneficiary is paid $500,000. ThisAexchange of unequal values reflects which insura nce
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contract feature? - CORRECT ANSWER -Aleatory
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, What is the consideration given by the insurer in the Consideration clause of a life policy? - CORRECT
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ANSWER -Promise to pay death benefit to named beneficiary
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What is a warranty? - CORRECT ANSWER -A statement guaranteed to be true
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Statements made on an insurance application that are believed to be true to the best of the applicants
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knowledge are: - CORRECT ANSWER -Representations
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If the material to risk, can representations void a policy? - CORRECT ANSWER -Yes
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What requires an offer, acceptance, and consideration? - CORRECT ANSWER -A contract
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AAlife insurance arrangement which circumvents insurable interest is called: - CORRECT ANSWER -
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Investor-Originated Life Insurance
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What are the elements of an insurance contract? - CORRECT ANSWER - Offer
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and acceptance, considerations, competent parties, legal purpose.
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What arrangement allows one to bypass insurable interest? - CORRECT ANSWER -Investor-
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Originated Life Insurance
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A contract where one party either accepts or rejects the terms of a contract written by another party is called a
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contract of... - CORRECT ANSWER -Adhesion
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In an insurance contract, the insurer is the only party who makes a legally enforceable promise. What ki nd
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of contract is this? - CORRECT ANSWER -Unilateral
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A policy of adhesion can only be modified by who? - CORRECT ANSWER -The insurance company
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Stranger Originated Life Insurance (STOLI) has been found to be in violation of which of the following co ntractual
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elements? - CORRECT ANSWER -Legal purpose (insurable interest)
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