COLORADO LIFE INSURANCE EXAM ACTUAL TEST PAPER QUESTIONS CORRECT ANSWERS
GRADED A PLUS
Question:
Limited-Payment Whole Life
Answer:
Allow for a lifetime of premiums to be paid in a shorter period of time 10 pay or 20 pay - premiums
payable in 10-20 level annual installments life paid up at age 65 - level annual installments from
date of purchase to age 65 cash value accumulates faster than continuous premium policy endows at
age 100
Question:
Single Premium Whole Life
Answer:
One payment made at time of purchase, covers all future costs of maintaining policy, create
immediate cash value
Question:
Universal Life (UL)
Answer:
Premiums are flexible, not fixed, and accumulate as interest in the policy's cash value only
policyowner can change death benefits cost of insurance and fees withdrawn monthly option 1 -
level death benefit, cash value rises quicker option 2 - increasing death benefit plus cash account
Question:
Variable Life Insurance
Answer:
,Separate account instead of guaranteed cash value, so there is the insurance and an investment
account to sell, one must have life insurance and securities licenses death benefit can increase,
guaranteed benefit
Question:
Variable Universal Life
Answer:
Universal life with a separate investment account death benefit will be paid as long as there is
sufficient cash value to pay the costs of insurance no guaranteed death benefit
Question:
Interest-Sensitive Whole Life
Answer:
Cash value can increase beyond the stated guarantee if economic conditions warrant fixed level
death benefit interest rate can fluctuate with economy cash value and death benefit can
increase/grow
Question:
Equity-Indexed Universal Life
Answer:
Permanent life insurance that allows policyholders to tie accumulation values to stock market,
current interest on cash account
Question:
Level Term Policy
Answer:
Death benefit is level and equals the face amount throughout the term of coverage, premium is also
level
, Question:
Decreasing Term Policy
Answer:
Death benefit declines over coverage period until it reaches zero at end of term, premium is level
Question:
Return of Premium Term Policy
Answer:
Return all or part of premium paid for policy if insured is still alive at end of term, premium is
higher and depends on percentage of premium returned (100%, 50%)
Question:
Renewability
Answer:
Term policy guaranteed to renew/extend with the same policy period at end of the term, no new
application required, premium changes with each renewal based on age
Question:
Convertability
Answer:
Term policy can be converted to a permanent type of policy, no new application required, must be
converted before the term expires Premium for converted policy based on one of two things:
attained age - insured's age at time of conversion original age - insured's age at time original policy
was written
Question:
Annuities
Answer:
GRADED A PLUS
Question:
Limited-Payment Whole Life
Answer:
Allow for a lifetime of premiums to be paid in a shorter period of time 10 pay or 20 pay - premiums
payable in 10-20 level annual installments life paid up at age 65 - level annual installments from
date of purchase to age 65 cash value accumulates faster than continuous premium policy endows at
age 100
Question:
Single Premium Whole Life
Answer:
One payment made at time of purchase, covers all future costs of maintaining policy, create
immediate cash value
Question:
Universal Life (UL)
Answer:
Premiums are flexible, not fixed, and accumulate as interest in the policy's cash value only
policyowner can change death benefits cost of insurance and fees withdrawn monthly option 1 -
level death benefit, cash value rises quicker option 2 - increasing death benefit plus cash account
Question:
Variable Life Insurance
Answer:
,Separate account instead of guaranteed cash value, so there is the insurance and an investment
account to sell, one must have life insurance and securities licenses death benefit can increase,
guaranteed benefit
Question:
Variable Universal Life
Answer:
Universal life with a separate investment account death benefit will be paid as long as there is
sufficient cash value to pay the costs of insurance no guaranteed death benefit
Question:
Interest-Sensitive Whole Life
Answer:
Cash value can increase beyond the stated guarantee if economic conditions warrant fixed level
death benefit interest rate can fluctuate with economy cash value and death benefit can
increase/grow
Question:
Equity-Indexed Universal Life
Answer:
Permanent life insurance that allows policyholders to tie accumulation values to stock market,
current interest on cash account
Question:
Level Term Policy
Answer:
Death benefit is level and equals the face amount throughout the term of coverage, premium is also
level
, Question:
Decreasing Term Policy
Answer:
Death benefit declines over coverage period until it reaches zero at end of term, premium is level
Question:
Return of Premium Term Policy
Answer:
Return all or part of premium paid for policy if insured is still alive at end of term, premium is
higher and depends on percentage of premium returned (100%, 50%)
Question:
Renewability
Answer:
Term policy guaranteed to renew/extend with the same policy period at end of the term, no new
application required, premium changes with each renewal based on age
Question:
Convertability
Answer:
Term policy can be converted to a permanent type of policy, no new application required, must be
converted before the term expires Premium for converted policy based on one of two things:
attained age - insured's age at time of conversion original age - insured's age at time original policy
was written
Question:
Annuities
Answer:
