COLORADO LIFE INSURANCE FINAL EXAM
QUESTIONS WITH VERIFIED ANSWERS 2026 |
Complete Review Pack | A+
• Continuous Premium Whole Life -✓✓Premiums are the same each year for the
duration of the policy, if policyowner continues to make payments they will receive cash
value of policy.
- Also called straight life or ordinary life
- endows at age 100
• Limited-Payment Whole Life -✓✓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 -✓✓One payment made at time of purchase, covers all
future costs of maintaining policy, create immediate cash value
• Universal Life (UL) -✓✓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- cost of insurance and fees withdrawn monthly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 -✓✓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 -✓✓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 -✓✓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 -✓✓Permanent life insurance that allows policyholders
to tie accumulation values to stock market, current interest on cash account
• Level Term Policy -✓✓Death benefit is level and equals the face amount throughout
the term of coverage, premium is also level
• Decreasing Term Policy -✓✓Death benefit declines over coverage period until it
reaches zero at end of term, premium is level
• Return of Premium Term Policy -✓✓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 -✓✓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 -✓✓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 -✓✓Upside down life insurance, tax deferred savings for retirement, protects
people from living too long
• Immediate Annuities (SPIA) -✓✓Single lump-sum premium, payments to insured can
start one month after or latest delay of 1 year, only interest part of payment is subject to
tax
• Deferred Annuities (SPDA) -✓✓Owner chooses amount and frequency of premium
payments (flexible), accumulated funds can be withdrawn at any time but may have
surrender charge
• Fixed Annuities -✓✓Guaranteed against loss, supported by general account with
assets, earn interest during accumulation period, level payment during annuity period
• Variable Annuities -✓✓Supported by investments, not guaranteed against loss,
separate account with investment risks, value expressed in accumulation units (like
shares), annuity units can fluctuate with investments which can adjust the payments to
the insured, regulated as insurance and securities (dual regulation)
• Equity-Indexed Annuities (EIA) -✓✓Fixed, interest linked to equity index, guarantees
minimum interest rate (normally 1-3%), guarantees backed by insurer's general account
QUESTIONS WITH VERIFIED ANSWERS 2026 |
Complete Review Pack | A+
• Continuous Premium Whole Life -✓✓Premiums are the same each year for the
duration of the policy, if policyowner continues to make payments they will receive cash
value of policy.
- Also called straight life or ordinary life
- endows at age 100
• Limited-Payment Whole Life -✓✓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 -✓✓One payment made at time of purchase, covers all
future costs of maintaining policy, create immediate cash value
• Universal Life (UL) -✓✓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 -✓✓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 -✓✓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 -✓✓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 -✓✓Permanent life insurance that allows policyholders
to tie accumulation values to stock market, current interest on cash account
• Level Term Policy -✓✓Death benefit is level and equals the face amount throughout
the term of coverage, premium is also level
• Decreasing Term Policy -✓✓Death benefit declines over coverage period until it
reaches zero at end of term, premium is level
• Return of Premium Term Policy -✓✓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 -✓✓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 -✓✓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 -✓✓Upside down life insurance, tax deferred savings for retirement, protects
people from living too long
• Immediate Annuities (SPIA) -✓✓Single lump-sum premium, payments to insured can
start one month after or latest delay of 1 year, only interest part of payment is subject to
tax
• Deferred Annuities (SPDA) -✓✓Owner chooses amount and frequency of premium
payments (flexible), accumulated funds can be withdrawn at any time but may have
surrender charge
• Fixed Annuities -✓✓Guaranteed against loss, supported by general account with
assets, earn interest during accumulation period, level payment during annuity period
• Variable Annuities -✓✓Supported by investments, not guaranteed against loss,
separate account with investment risks, value expressed in accumulation units (like
shares), annuity units can fluctuate with investments which can adjust the payments to
the insured, regulated as insurance and securities (dual regulation)
• Equity-Indexed Annuities (EIA) -✓✓Fixed, interest linked to equity index, guarantees
minimum interest rate (normally 1-3%), guarantees backed by insurer's general account
