COLORADO LIFE INSURANCE EXAM 2026
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ 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
◉ Single Premium Whole Life. Answer: One payment made at time
of purchase, covers all future costs of maintaining policy, create
immediate cash value
◉ 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- cost of insurance and fees withdrawn monthly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
,◉ 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
◉ 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
◉ 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
◉ Equity-Indexed Universal Life. Answer: Permanent life insurance
that allows policyholders to tie accumulation values to stock market,
current interest on cash account
, ◉ Level Term Policy. Answer: Death benefit is level and equals the
face amount throughout the term of coverage, premium is also level
◉ Decreasing Term Policy. Answer: Death benefit declines over
coverage period until it reaches zero at end of term, premium is level
◉ 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%)
◉ 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
◉ 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
◉ Annuities. Answer: Upside down life insurance, tax deferred
savings for retirement, protects people from living too long
COMPLETE QUESTIONS AND ANSWERS
GRADED A+
◉ 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
◉ Single Premium Whole Life. Answer: One payment made at time
of purchase, covers all future costs of maintaining policy, create
immediate cash value
◉ 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
,◉ 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
◉ 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
◉ 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
◉ Equity-Indexed Universal Life. Answer: Permanent life insurance
that allows policyholders to tie accumulation values to stock market,
current interest on cash account
, ◉ Level Term Policy. Answer: Death benefit is level and equals the
face amount throughout the term of coverage, premium is also level
◉ Decreasing Term Policy. Answer: Death benefit declines over
coverage period until it reaches zero at end of term, premium is level
◉ 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%)
◉ 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
◉ 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
◉ Annuities. Answer: Upside down life insurance, tax deferred
savings for retirement, protects people from living too long
