2025 Colorado Life Insurance Exam
Questions with Verified Answers 2025
The term insurance transaction includes: - CORRECT ANSWER -
1) Solicitation; 2) Negotiation; 3) Sales; 4) Advertising
Adverse Selection (insurance def) - CORRECT ANSWER -
Insuring the risks that are more prone to losses than the average risk
Agent/Producer - CORRECT ANSWER -
a legal representative of an insurance company; the classification of producer usually includes agents a
nd brokers; agents are the agents of the insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Beneficiary - CORRECT ANSWER -A person who receives the benefits of an insurance policy
Death Benefit - CORRECT ANSWER -
the amount paid upon the death of the insured in a life insurance policy
insurance policy - CORRECT ANSWER -
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the
insured or the beneficiary for loss caused by specific events
Insured - CORRECT ANSWER -
person covered by the insurance policy; may or may not be the policy owner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance policy
lapse - CORRECT ANSWER -policy termination due to nonpayment of premium
Policyowner - CORRECT ANSWER -the person entitled to exercise the rights and privileges in the policy
, Agent Authority - CORRECT ANSWER -express, implied, apparent
Express Authority - CORRECT ANSWER -authority declared in clear, direct, and definite terms
Implied Authority - CORRECT ANSWER -
Authority that is not expressed or written into the contract, but which the agent is assumed to have in
order to transact the business of insurance for the principal.
Apparent Authority - CORRECT ANSWER -
The appearance or the assumption of authority based on the actions, words, or deeds of the principal o
r because of circumstances the principal created.
Elements of a Legal Contract - CORRECT ANSWER -
Agreement (offer and acceptance), consideration, competent parties, and legal purpose
Aleatory Contract - CORRECT ANSWER -The exchange of value is unequal.
adhesion contract - CORRECT ANSWER -A take-it-or-leave-
it offer made by a party who holds most of the power in a bargaining session
Unilateral Contract - CORRECT ANSWER -promise in exchange for an act - a one-sided promise
Conditional Contract - CORRECT ANSWER -
a contract that becomes enforceable only on the happening or termination of a specified condition
Application Statement - Warranty - CORRECT ANSWER -A absolutely true statement
Application Statement - Representations - CORRECT ANSWER -
True to the best of the applicants knowledge
Questions with Verified Answers 2025
The term insurance transaction includes: - CORRECT ANSWER -
1) Solicitation; 2) Negotiation; 3) Sales; 4) Advertising
Adverse Selection (insurance def) - CORRECT ANSWER -
Insuring the risks that are more prone to losses than the average risk
Agent/Producer - CORRECT ANSWER -
a legal representative of an insurance company; the classification of producer usually includes agents a
nd brokers; agents are the agents of the insurer
Applicant or proposed insured - CORRECT ANSWER -a person applying for insurance
Beneficiary - CORRECT ANSWER -A person who receives the benefits of an insurance policy
Death Benefit - CORRECT ANSWER -
the amount paid upon the death of the insured in a life insurance policy
insurance policy - CORRECT ANSWER -
a contract between a policyowner (and/or insured) and an insurance company which agrees to pay the
insured or the beneficiary for loss caused by specific events
Insured - CORRECT ANSWER -
person covered by the insurance policy; may or may not be the policy owner
Insurer (principal) - CORRECT ANSWER -the company who issues an insurance policy
lapse - CORRECT ANSWER -policy termination due to nonpayment of premium
Policyowner - CORRECT ANSWER -the person entitled to exercise the rights and privileges in the policy
, Agent Authority - CORRECT ANSWER -express, implied, apparent
Express Authority - CORRECT ANSWER -authority declared in clear, direct, and definite terms
Implied Authority - CORRECT ANSWER -
Authority that is not expressed or written into the contract, but which the agent is assumed to have in
order to transact the business of insurance for the principal.
Apparent Authority - CORRECT ANSWER -
The appearance or the assumption of authority based on the actions, words, or deeds of the principal o
r because of circumstances the principal created.
Elements of a Legal Contract - CORRECT ANSWER -
Agreement (offer and acceptance), consideration, competent parties, and legal purpose
Aleatory Contract - CORRECT ANSWER -The exchange of value is unequal.
adhesion contract - CORRECT ANSWER -A take-it-or-leave-
it offer made by a party who holds most of the power in a bargaining session
Unilateral Contract - CORRECT ANSWER -promise in exchange for an act - a one-sided promise
Conditional Contract - CORRECT ANSWER -
a contract that becomes enforceable only on the happening or termination of a specified condition
Application Statement - Warranty - CORRECT ANSWER -A absolutely true statement
Application Statement - Representations - CORRECT ANSWER -
True to the best of the applicants knowledge
