COLORADO LIFE & HEALTH INSURANCE | Traditional Whole Life & Ordinary
Life
300 Multiple Choice Questions & Answers · 2026 Exam Preparation
Q1. What is the primary characteristic of traditional whole life insurance?
A) It provides coverage only for a specified term
B) It provides permanent lifetime coverage with a guaranteed death benefit
C) It only pays benefits if the insured survives to age 65
D) It provides coverage only during the insured's working years
✓ ANSWER: B — Traditional whole life insurance provides permanent coverage
for the insured's entire lifetime, as long as premiums are paid, with a guaranteed
death benefit.
Q2. Which of the following best describes 'ordinary life' insurance?
A) A policy that pays benefits only for ordinary causes of death
B) Another name for term life insurance
C) A whole life policy with level premiums payable for the insured's entire
life
D) A policy that covers only ordinary business risks
✓ ANSWER: C — Ordinary life (also called straight life) is a whole life policy
where level premiums are paid throughout the insured's lifetime.
Q3. In a traditional whole life policy, the premium structure is:
A) Increasing annually based on age
B) Level throughout the life of the policy
C) Decreasing as the cash value increases
D) Flexible and can be changed by the policyholder anytime
✓ ANSWER: B — Traditional whole life policies have level premiums that remain
constant throughout the life of the policy.
Q4. Which of the following is NOT a feature of whole life insurance?
A) Permanent protection
B) Level premiums
C) Cash value accumulation
D) Coverage that expires at a set age
✓ ANSWER: D — Whole life insurance provides permanent protection that does
not expire at a set age, as long as premiums are paid.
Q5. The cash value in a whole life policy belongs to:
A) The insurance company
, B) The insurer until the policy matures
C) The policyowner
D) The beneficiary
✓ ANSWER: C — The cash value in a whole life policy is a living benefit that
belongs to the policyowner and can be accessed during the insured's lifetime.
Q6. At what point does a whole life policy 'mature' or 'endow'?
A) When the insured turns 65
B) When the cash value equals the face amount, typically at age 100 or 121
C) After 20 years of premium payments
D) When the insured retires
✓ ANSWER: B — A whole life policy matures (endows) when the cash value
equals the face amount. Traditionally this was age 100, though many modern
policies use age 121.
Q7. What happens when a whole life policy endows?
A) The policy is cancelled
B) The premium doubles
C) The face amount is paid to the policyowner
D) The death benefit is reduced by half
✓ ANSWER: C — When a whole life policy endows, the cash value equals the
face amount and the policyowner receives the face amount, just as if the insured
had died.
Q8. Which of the following is a primary advantage of whole life insurance over
term insurance?
A) Lower initial premiums
B) Cash value accumulation
C) Higher death benefits for the same premium
D) Flexibility to choose benefit amount after purchase
✓ ANSWER: B — Whole life insurance builds cash value over time, which term
insurance does not. This cash value can be borrowed against or surrendered.
Q9. In Colorado, the minimum free-look period for a life insurance policy is:
A) 5 days
B) 10 days
C) 20 days
D) 30 days
✓ ANSWER: B — Colorado requires a minimum 10-day free-look period for life
insurance policies, during which the policyowner may return the policy for a full
refund of premiums paid.
,Q10. Which Colorado statute primarily governs life insurance policy
provisions?
A) C.R.S. Title 8
B) C.R.S. Title 10
C) C.R.S. Title 12
D) C.R.S. Title 24
✓ ANSWER: B — Colorado Revised Statutes Title 10 governs insurance in
Colorado, including life insurance policy provisions and requirements.
Q11. The 'face amount' of a whole life policy is:
A) The total premiums paid
B) The cash surrender value
C) The death benefit stated in the policy
D) The net amount at risk
✓ ANSWER: C — The face amount (also called the face value) is the death
benefit — the amount the insurer promises to pay upon the insured's death.
Q12. What is the 'net amount at risk' in a whole life policy?
A) The total premiums the insurer has at risk
B) The difference between the face amount and the cash value
C) The amount the insurer risks losing due to investment losses
D) The policyholder's equity in the policy
✓ ANSWER: B — The net amount at risk is the difference between the face
amount and the accumulated cash value. As cash value grows, the net amount at
risk decreases.
Q13. Which component of the whole life insurance premium is NOT used to
fund the death benefit?
A) The mortality charge
B) The expense loading
C) The savings/investment element
D) Both B and C
✓ ANSWER: C — The premium has three components: mortality charges,
expense loading, and a savings element. The savings element builds cash value,
not the death benefit directly.
Q14. In Colorado, who has the right to change the beneficiary of a life
insurance policy?
A) The insured only
B) The beneficiary only
C) The policyowner, unless an irrevocable beneficiary has been named
D) The insurance company
, ✓ ANSWER: C — The policyowner has the right to change the beneficiary
unless an irrevocable beneficiary has been designated, in which case the
beneficiary's consent is required.
Q15. A policyowner names a beneficiary as 'irrevocable.' This means:
A) The beneficiary can never be changed under any circumstances
B) The policyowner cannot change the beneficiary without the beneficiary's
written consent
C) The death benefit is guaranteed to be paid to that beneficiary
D) The policyowner loses all rights to the policy
✓ ANSWER: B — An irrevocable beneficiary cannot be changed or removed
without that beneficiary's written consent. However, it is possible with consent.
Q16. What is a 'contingent beneficiary' in a life insurance policy?
A) A beneficiary who will receive a contingent payment
B) A beneficiary who receives the death benefit only if the primary
beneficiary predeceases the insured
C) An alternate policyowner
D) A trust that receives policy proceeds
✓ ANSWER: B — A contingent (secondary) beneficiary receives the death
benefit only if all primary beneficiaries have predeceased the insured.
Q17. If the insured and primary beneficiary die simultaneously, and no
contingent beneficiary exists, the death benefit is paid to:
A) The state of Colorado
B) The insurer
C) The insured's estate
D) The nearest surviving relative
✓ ANSWER: C — If no beneficiary survives, the death benefit is paid to the
insured's estate and distributed according to probate laws.
Q18. The incontestability clause in a life insurance policy states the insurer:
A) Can never contest a claim for any reason
B) Cannot contest a claim for material misrepresentation after the policy
has been in force for a specified period (usually 2 years)
C) Cannot refuse to pay claims after 5 years
D) Can only contest claims within the first 6 months
✓ ANSWER: B — Colorado requires an incontestability period of no more than 2
years. After this period, the insurer generally cannot contest the policy based on
misrepresentations in the application.
Q19. Colorado's incontestability clause requirement for life insurance is:
A) 1 year
Life
300 Multiple Choice Questions & Answers · 2026 Exam Preparation
Q1. What is the primary characteristic of traditional whole life insurance?
A) It provides coverage only for a specified term
B) It provides permanent lifetime coverage with a guaranteed death benefit
C) It only pays benefits if the insured survives to age 65
D) It provides coverage only during the insured's working years
✓ ANSWER: B — Traditional whole life insurance provides permanent coverage
for the insured's entire lifetime, as long as premiums are paid, with a guaranteed
death benefit.
Q2. Which of the following best describes 'ordinary life' insurance?
A) A policy that pays benefits only for ordinary causes of death
B) Another name for term life insurance
C) A whole life policy with level premiums payable for the insured's entire
life
D) A policy that covers only ordinary business risks
✓ ANSWER: C — Ordinary life (also called straight life) is a whole life policy
where level premiums are paid throughout the insured's lifetime.
Q3. In a traditional whole life policy, the premium structure is:
A) Increasing annually based on age
B) Level throughout the life of the policy
C) Decreasing as the cash value increases
D) Flexible and can be changed by the policyholder anytime
✓ ANSWER: B — Traditional whole life policies have level premiums that remain
constant throughout the life of the policy.
Q4. Which of the following is NOT a feature of whole life insurance?
A) Permanent protection
B) Level premiums
C) Cash value accumulation
D) Coverage that expires at a set age
✓ ANSWER: D — Whole life insurance provides permanent protection that does
not expire at a set age, as long as premiums are paid.
Q5. The cash value in a whole life policy belongs to:
A) The insurance company
, B) The insurer until the policy matures
C) The policyowner
D) The beneficiary
✓ ANSWER: C — The cash value in a whole life policy is a living benefit that
belongs to the policyowner and can be accessed during the insured's lifetime.
Q6. At what point does a whole life policy 'mature' or 'endow'?
A) When the insured turns 65
B) When the cash value equals the face amount, typically at age 100 or 121
C) After 20 years of premium payments
D) When the insured retires
✓ ANSWER: B — A whole life policy matures (endows) when the cash value
equals the face amount. Traditionally this was age 100, though many modern
policies use age 121.
Q7. What happens when a whole life policy endows?
A) The policy is cancelled
B) The premium doubles
C) The face amount is paid to the policyowner
D) The death benefit is reduced by half
✓ ANSWER: C — When a whole life policy endows, the cash value equals the
face amount and the policyowner receives the face amount, just as if the insured
had died.
Q8. Which of the following is a primary advantage of whole life insurance over
term insurance?
A) Lower initial premiums
B) Cash value accumulation
C) Higher death benefits for the same premium
D) Flexibility to choose benefit amount after purchase
✓ ANSWER: B — Whole life insurance builds cash value over time, which term
insurance does not. This cash value can be borrowed against or surrendered.
Q9. In Colorado, the minimum free-look period for a life insurance policy is:
A) 5 days
B) 10 days
C) 20 days
D) 30 days
✓ ANSWER: B — Colorado requires a minimum 10-day free-look period for life
insurance policies, during which the policyowner may return the policy for a full
refund of premiums paid.
,Q10. Which Colorado statute primarily governs life insurance policy
provisions?
A) C.R.S. Title 8
B) C.R.S. Title 10
C) C.R.S. Title 12
D) C.R.S. Title 24
✓ ANSWER: B — Colorado Revised Statutes Title 10 governs insurance in
Colorado, including life insurance policy provisions and requirements.
Q11. The 'face amount' of a whole life policy is:
A) The total premiums paid
B) The cash surrender value
C) The death benefit stated in the policy
D) The net amount at risk
✓ ANSWER: C — The face amount (also called the face value) is the death
benefit — the amount the insurer promises to pay upon the insured's death.
Q12. What is the 'net amount at risk' in a whole life policy?
A) The total premiums the insurer has at risk
B) The difference between the face amount and the cash value
C) The amount the insurer risks losing due to investment losses
D) The policyholder's equity in the policy
✓ ANSWER: B — The net amount at risk is the difference between the face
amount and the accumulated cash value. As cash value grows, the net amount at
risk decreases.
Q13. Which component of the whole life insurance premium is NOT used to
fund the death benefit?
A) The mortality charge
B) The expense loading
C) The savings/investment element
D) Both B and C
✓ ANSWER: C — The premium has three components: mortality charges,
expense loading, and a savings element. The savings element builds cash value,
not the death benefit directly.
Q14. In Colorado, who has the right to change the beneficiary of a life
insurance policy?
A) The insured only
B) The beneficiary only
C) The policyowner, unless an irrevocable beneficiary has been named
D) The insurance company
, ✓ ANSWER: C — The policyowner has the right to change the beneficiary
unless an irrevocable beneficiary has been designated, in which case the
beneficiary's consent is required.
Q15. A policyowner names a beneficiary as 'irrevocable.' This means:
A) The beneficiary can never be changed under any circumstances
B) The policyowner cannot change the beneficiary without the beneficiary's
written consent
C) The death benefit is guaranteed to be paid to that beneficiary
D) The policyowner loses all rights to the policy
✓ ANSWER: B — An irrevocable beneficiary cannot be changed or removed
without that beneficiary's written consent. However, it is possible with consent.
Q16. What is a 'contingent beneficiary' in a life insurance policy?
A) A beneficiary who will receive a contingent payment
B) A beneficiary who receives the death benefit only if the primary
beneficiary predeceases the insured
C) An alternate policyowner
D) A trust that receives policy proceeds
✓ ANSWER: B — A contingent (secondary) beneficiary receives the death
benefit only if all primary beneficiaries have predeceased the insured.
Q17. If the insured and primary beneficiary die simultaneously, and no
contingent beneficiary exists, the death benefit is paid to:
A) The state of Colorado
B) The insurer
C) The insured's estate
D) The nearest surviving relative
✓ ANSWER: C — If no beneficiary survives, the death benefit is paid to the
insured's estate and distributed according to probate laws.
Q18. The incontestability clause in a life insurance policy states the insurer:
A) Can never contest a claim for any reason
B) Cannot contest a claim for material misrepresentation after the policy
has been in force for a specified period (usually 2 years)
C) Cannot refuse to pay claims after 5 years
D) Can only contest claims within the first 6 months
✓ ANSWER: B — Colorado requires an incontestability period of no more than 2
years. After this period, the insurer generally cannot contest the policy based on
misrepresentations in the application.
Q19. Colorado's incontestability clause requirement for life insurance is:
A) 1 year
