COLORADO
LIFE INSURANCE FINAL EXAM PREP
400 Questions + (with 4 Practice Exams)
Each Exam Consist of 100 Multiple choice Questions with Answers
The Ultimate Study Guide to Pass Your Exam Without Breaking a Sweat
Inside, you'll get:
• Complete Exam Coverage —all the essential
topics, laid out clearly and concisely.
• Real Practice Tests —updated to match the latest exam format and difficulty.
• Insider Tips —learn from a seasoned pro, with strategies that give you a winning edge.
,TABLE OF CONTENTS
Colorado Life Insurance Practice Test set 1………………………………03
Colorado Life Insurance Practice Test set 2………………………………33
Colorado Life Insurance Practice Test set 3………………………………67
Colorado Life Insurance Practice Test set 4………………………………102
, Colorado Life Insurance Practice Test set 1
1. A license is deemed to be used for controlled business if during any 12-
month period
a) the licensee wrote more than 10 policies on controlled business
b) the licensee's total premiums on controlled business exceeded the total
premiums on all other business
c) the licensee wrote policies totaling more than $25,000 on cnotrolled busi- ness
d) the licensee's total premiums on controlled business made up more than 25% of his
total premiums
Answer: B) the licensee's total premiums on controlled business exceeded the total
premiums on all other business
2. Which of the following consists of an offer, acceptance, and considera- tion?
a) warranty
b) estoppel
c) contract
d) representation
Answer: c) contract
3. A life policy that contains a monthly mortality charge as well as self-direct- ed
investment choices is called a(n)
a) joint life policy
b) endowment
c) variable universal life policy
d) universal life policy
,b) installment refund
c) straight life annuity
d) life annuity with period certain
Answer: c) straight life annuity
5. All of these statements about the Waiver of Premium provision are correct
EXCEPT
a) awaiting period must pass before becoming eligible for benefits
b) waiver of premium is available on both permanent and term insurance
policies
c) insured must be eligible for Social Security disability for claim to be accept-
ed
d) insured must be disabled to qualify
Answer: c) insured must be eligible for Social Security disability for claim to be
accepted
6. One becomes eligible for Social Security disability benefits after having been
disabled for
a) 3 months
b) 5 months
c) 6 months
d) 12 months
Answer: B) 5 months
7. Which of the following life insurance policies combine term insurance with a
,d) graded life
Answer: c) universal life
8. A long-term care rider in a life insurance policy pays a daily benefit in the event
of which of the following?
a) critical illness
b) terminal illness
c) inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
d) inability of the insured to maintain insurance premiums due to umemploy- ment
Answer: c) inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
9. C is trying to determine whether to convert her convertible term life policy to
whole life insurance using her original age or attained age. What factor would affect
her decision the most?
a) the cost
b) the nonforfeiture options
c) the contestable period
d) the assignment of ownership
Answer: A) the cost
10. A policyowner's rights are limited under which beneficiary designation?
a) revocable
b) tertiary
c) contingent
d) irrevocable
,b) death benefit can usually be adjusted
c) cash value may be borrowed against
d) premiums are flexible
Answer: c) cash value may be borrowed against
12. When a policyowner cash surrenders a Universal Life insurance policy in it's early
years, this may be considered a red flag for a(n)
a) Federal Fair Act Violation
b) Title 18 Fraud Violation
c) Anti-Money Laundering Violation
d) Unfair Trade Practice Violation
Answer: c) Anti-Money Laundering Violation
13. Which of these terms accurately defines an underwriter's assessment of
information on a life insurance application?
a) risk classification
b) warranty review
c) insurable interest
d) inspection report
Answer: A) risk classification
14. If an annuity application was not taken in person, an insurer must provide the
applicant a Buyer's Guide
a) at the time of application
b) within 5 days of the insurer receiving the application
c) at the time of policy issue
d) at the time of policy delivery
,a) application will be returned to the writing agent
b) application will be approved with restrictions
c) application will be pending until a MIB report is sent to the insurer
d) application will be automatically declined
Answer: A) application will be returned to the writing agent
16. An employee with $25,000 group term life coverage was recently fired. This
employee's group coverage may be converted to a
a) $125,000 individual whole life policy
b) $25,000 modified whole life policy
c) $25,000 individual term life policy
d) $25,000 individual whole life policy
Answer: D) $25,000 individual whole life policy
17. When an employee is terminated, which statement about a group term life
conversion is true?
a) employee must convert group term life coverage into an individual term life
policy
b) employee must provide evidence of insurability for conversion
c) policy proceeds will be paid if the employee dies during the conversion period
d) policy proceeds will NOT be paid if the employee dies during the conversion period
Answer: c) policy proceeds will be paid if the employee dies during the conversion
period
18. A(n) rider may be used to include coverage for children under their
parents' life insurance policy.
a) payor
,19. The automatic premium loan provision is designed to
a) avoid a policy lapse
b) allow a policyowner to take out additional coverage without evidence of
insurability
c) allow a policyowner to request a policy loan
d) provide a source of revenue to the insurance company
Answer: A) avoid a policy lapse
20. What is the purpose of the U.S.A Patriot Act?
a) detect and deter fraud
b) detect and deter alien insurance companies
c) detect and deter terrorism
d) detect and deter misrepresentation
Answer: c) detect and deter terrorism
21. The part of a life insurance policy guaranteed to be true is called a(n):
a) representation
b) exclusion
c) warranty
d) waiver
Answer: c) warranty
22. G purchased a Family Income policy at8 / age
61
40, The policy has a 20-year rider
period. If G were to die at age 50, how long would G's family receive an income?
a) 5 years
,23. The Consideration clause of an insurance contract includes:
a) the buyer's guide
b) a summary of the coverage provided
c) the named beneficiaries
d) the schedule and amount of premium payments
Answer: D) the schedule and amount of premium payments
24. Three law partners form a Cross-Purchase Buy and Sell agreement. This
agreement is funded with individual life insurance. How many total life policies are
needed for this agreement?
a) 12
b) 6
c) 3
d) 1
Answer: B) 6
25. An producer who violates a cease and desist order may, after a hearing, be fined up
to
a) $250
b) $500
c) $750
d) $1000
Answer: B) $500
26. Which provision prevents an insurer from changing the terms of the con-
, c) entire contract provision
d) assignment
Answer: c) entire contract provision
27. Which tax would an IRA participant be subjected to on distributions re- ceived
prior to age 59 1/2?
a) 10% tax penalty for early withdrawal
b) capital gains tax
c) ordinary income tax and a 10% tax penalty for early withdrawal
d) ordinary income tax
Answer: c) ordinary income tax and a 10% tax penalty for early withdrawal
28. Company XYZ offers a group Term Life insurance plan to its employees. What
does each employee covered under this plan receive?
a) master policy
b) receipt of coverage
c) individual policy
d) certificate of insurance
Answer: D) certificate of insurance
29. What action should a producer take if the initial premium is NOT submitted with
the application?
a) keep the application until premium is paid
b) forward the application to the insurer after giving the applicant a binding
10 /
receipt 61
c) forward the application to the insurer without the initial premium
d) forward the application to the insurer after giving the applicant a conditional receipt
LIFE INSURANCE FINAL EXAM PREP
400 Questions + (with 4 Practice Exams)
Each Exam Consist of 100 Multiple choice Questions with Answers
The Ultimate Study Guide to Pass Your Exam Without Breaking a Sweat
Inside, you'll get:
• Complete Exam Coverage —all the essential
topics, laid out clearly and concisely.
• Real Practice Tests —updated to match the latest exam format and difficulty.
• Insider Tips —learn from a seasoned pro, with strategies that give you a winning edge.
,TABLE OF CONTENTS
Colorado Life Insurance Practice Test set 1………………………………03
Colorado Life Insurance Practice Test set 2………………………………33
Colorado Life Insurance Practice Test set 3………………………………67
Colorado Life Insurance Practice Test set 4………………………………102
, Colorado Life Insurance Practice Test set 1
1. A license is deemed to be used for controlled business if during any 12-
month period
a) the licensee wrote more than 10 policies on controlled business
b) the licensee's total premiums on controlled business exceeded the total
premiums on all other business
c) the licensee wrote policies totaling more than $25,000 on cnotrolled busi- ness
d) the licensee's total premiums on controlled business made up more than 25% of his
total premiums
Answer: B) the licensee's total premiums on controlled business exceeded the total
premiums on all other business
2. Which of the following consists of an offer, acceptance, and considera- tion?
a) warranty
b) estoppel
c) contract
d) representation
Answer: c) contract
3. A life policy that contains a monthly mortality charge as well as self-direct- ed
investment choices is called a(n)
a) joint life policy
b) endowment
c) variable universal life policy
d) universal life policy
,b) installment refund
c) straight life annuity
d) life annuity with period certain
Answer: c) straight life annuity
5. All of these statements about the Waiver of Premium provision are correct
EXCEPT
a) awaiting period must pass before becoming eligible for benefits
b) waiver of premium is available on both permanent and term insurance
policies
c) insured must be eligible for Social Security disability for claim to be accept-
ed
d) insured must be disabled to qualify
Answer: c) insured must be eligible for Social Security disability for claim to be
accepted
6. One becomes eligible for Social Security disability benefits after having been
disabled for
a) 3 months
b) 5 months
c) 6 months
d) 12 months
Answer: B) 5 months
7. Which of the following life insurance policies combine term insurance with a
,d) graded life
Answer: c) universal life
8. A long-term care rider in a life insurance policy pays a daily benefit in the event
of which of the following?
a) critical illness
b) terminal illness
c) inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
d) inability of the insured to maintain insurance premiums due to umemploy- ment
Answer: c) inability of the insured to perform more than 2 Activities of Daily Living
(ADL's)
9. C is trying to determine whether to convert her convertible term life policy to
whole life insurance using her original age or attained age. What factor would affect
her decision the most?
a) the cost
b) the nonforfeiture options
c) the contestable period
d) the assignment of ownership
Answer: A) the cost
10. A policyowner's rights are limited under which beneficiary designation?
a) revocable
b) tertiary
c) contingent
d) irrevocable
,b) death benefit can usually be adjusted
c) cash value may be borrowed against
d) premiums are flexible
Answer: c) cash value may be borrowed against
12. When a policyowner cash surrenders a Universal Life insurance policy in it's early
years, this may be considered a red flag for a(n)
a) Federal Fair Act Violation
b) Title 18 Fraud Violation
c) Anti-Money Laundering Violation
d) Unfair Trade Practice Violation
Answer: c) Anti-Money Laundering Violation
13. Which of these terms accurately defines an underwriter's assessment of
information on a life insurance application?
a) risk classification
b) warranty review
c) insurable interest
d) inspection report
Answer: A) risk classification
14. If an annuity application was not taken in person, an insurer must provide the
applicant a Buyer's Guide
a) at the time of application
b) within 5 days of the insurer receiving the application
c) at the time of policy issue
d) at the time of policy delivery
,a) application will be returned to the writing agent
b) application will be approved with restrictions
c) application will be pending until a MIB report is sent to the insurer
d) application will be automatically declined
Answer: A) application will be returned to the writing agent
16. An employee with $25,000 group term life coverage was recently fired. This
employee's group coverage may be converted to a
a) $125,000 individual whole life policy
b) $25,000 modified whole life policy
c) $25,000 individual term life policy
d) $25,000 individual whole life policy
Answer: D) $25,000 individual whole life policy
17. When an employee is terminated, which statement about a group term life
conversion is true?
a) employee must convert group term life coverage into an individual term life
policy
b) employee must provide evidence of insurability for conversion
c) policy proceeds will be paid if the employee dies during the conversion period
d) policy proceeds will NOT be paid if the employee dies during the conversion period
Answer: c) policy proceeds will be paid if the employee dies during the conversion
period
18. A(n) rider may be used to include coverage for children under their
parents' life insurance policy.
a) payor
,19. The automatic premium loan provision is designed to
a) avoid a policy lapse
b) allow a policyowner to take out additional coverage without evidence of
insurability
c) allow a policyowner to request a policy loan
d) provide a source of revenue to the insurance company
Answer: A) avoid a policy lapse
20. What is the purpose of the U.S.A Patriot Act?
a) detect and deter fraud
b) detect and deter alien insurance companies
c) detect and deter terrorism
d) detect and deter misrepresentation
Answer: c) detect and deter terrorism
21. The part of a life insurance policy guaranteed to be true is called a(n):
a) representation
b) exclusion
c) warranty
d) waiver
Answer: c) warranty
22. G purchased a Family Income policy at8 / age
61
40, The policy has a 20-year rider
period. If G were to die at age 50, how long would G's family receive an income?
a) 5 years
,23. The Consideration clause of an insurance contract includes:
a) the buyer's guide
b) a summary of the coverage provided
c) the named beneficiaries
d) the schedule and amount of premium payments
Answer: D) the schedule and amount of premium payments
24. Three law partners form a Cross-Purchase Buy and Sell agreement. This
agreement is funded with individual life insurance. How many total life policies are
needed for this agreement?
a) 12
b) 6
c) 3
d) 1
Answer: B) 6
25. An producer who violates a cease and desist order may, after a hearing, be fined up
to
a) $250
b) $500
c) $750
d) $1000
Answer: B) $500
26. Which provision prevents an insurer from changing the terms of the con-
, c) entire contract provision
d) assignment
Answer: c) entire contract provision
27. Which tax would an IRA participant be subjected to on distributions re- ceived
prior to age 59 1/2?
a) 10% tax penalty for early withdrawal
b) capital gains tax
c) ordinary income tax and a 10% tax penalty for early withdrawal
d) ordinary income tax
Answer: c) ordinary income tax and a 10% tax penalty for early withdrawal
28. Company XYZ offers a group Term Life insurance plan to its employees. What
does each employee covered under this plan receive?
a) master policy
b) receipt of coverage
c) individual policy
d) certificate of insurance
Answer: D) certificate of insurance
29. What action should a producer take if the initial premium is NOT submitted with
the application?
a) keep the application until premium is paid
b) forward the application to the insurer after giving the applicant a binding
10 /
receipt 61
c) forward the application to the insurer without the initial premium
d) forward the application to the insurer after giving the applicant a conditional receipt
