Life & Health Insurance Exam Colorado Latest
Update 2024-2025 Actual Exam from Credible
Source with 110 Questions and 100% Verified
Detailed Correct Answers Guaranteed
Accelerated Death Benefits - CORRECT ANSWER: -Also known as Living Benefits
Rider, 12 months or less
-Apply when insured gets a terminal illness
-Insurer will pay out a portion of death benefit
-Face amount paid to beneficiary at death is reduced by the amount paid out while living
-Money must be used to pay hospital bills
Accidental Death Benefit Rider - CORRECT ANSWER: -Type of Insurance Rider
-Death must occur within 90 days of accident or it is assumed to be form of natural
causes
-Doesn't cover death due to sickness only accidents
Adjustable Whole Life----TEST - CORRECT ANSWER: -Sold to clients with fluctuating
incomes----TEST
-Combination of term and whole life----TEST
-Coverage may not be increased without physical exam---TEST
Annuity Pay-Out Options - CORRECT ANSWER: -Contractual; cannot be changed once
selected
-Amount received in excess of cost are taxable as ordinary income
-For life
-Cash surrender under age 59.5 subject to IRS 10% penalty
-Non-qualified=Funded with after tax dollars
,Assignments - CORRECT ANSWER: -Absolute assignment is permanent change of
ownership--TEST
-Collateral assignment is temporary
-Often used when insurance is required as a condition to a loan---TEST
Beneficiary Designations - CORRECT ANSWER: -Primary beneficiary receives
proceeds when insured dies
-Can have as many primaries as wanted
-Guardian must be appointed for children
-Company may designate irrevocable beneficiary
-Common disaster clause
-Applies if insured and primary beneficiary both day as a result of the same accident
-Insured always dies last even if not the case
-Primary beneficiary must die within 10 days for clause to be enacted
Business Disability Buyout Policy - CORRECT ANSWER: -Utilizes buy-sell agreement
-Lump Sum
-Paid to able partner
-Premiums not tax deductible
-Proceeds not taxable
Business Overhead Expense Policy (BOE) - CORRECT ANSWER: -Includes on going
business expenses ex. rent, wages, utilities
-Premiums tax deductible
Changes in the Application - CORRECT ANSWER: Can never make changes unless
the applicants initials have changed
COAL - CORRECT ANSWER: -Four elements required to have a legal contract
-C=Consideration
, -O=Offer
-A=Acceptance
-L=Legal
Collecting Initial Premiums & Issuing Conditional Receipts - CORRECT ANSWER: -
Producers gives applicant a conditional receipt
-C.O.D. Collect on delivery submittal applications
-No coverage exists since no premium has been paid
-Producer delivers policy and collects premium, now the coverage begins
-Producer also obtains a statement of good health
-Life and health producers never use binders-verbal agreement, they are not allowed
Combination Plans & Life Insurance Policy Variations - CORRECT ANSWER: -Joint Life
Policy
-Survivorship Life Policy
Consequences of Accepting an Incomplete Application - CORRECT ANSWER: -
Constitutes a waiver, the voluntary act of giving up legal rights
-Estoppel- Inability to enforce legal rights once given up - 2 years
Consideration - CORRECT ANSWER: -Required for legal contract
-Applicant's consideration is the premium paid + applicant's statements on application
-Insurer's consideration is their promise to provide coverage in return
Consideration Clause - CORRECT ANSWER: -An exchange of values
-Pays first premium then answers questions on application
-Representation is truth to the best of your knowledge
-Company agrees to provide coverage in exchange
-No coverage unless premium is paid
Update 2024-2025 Actual Exam from Credible
Source with 110 Questions and 100% Verified
Detailed Correct Answers Guaranteed
Accelerated Death Benefits - CORRECT ANSWER: -Also known as Living Benefits
Rider, 12 months or less
-Apply when insured gets a terminal illness
-Insurer will pay out a portion of death benefit
-Face amount paid to beneficiary at death is reduced by the amount paid out while living
-Money must be used to pay hospital bills
Accidental Death Benefit Rider - CORRECT ANSWER: -Type of Insurance Rider
-Death must occur within 90 days of accident or it is assumed to be form of natural
causes
-Doesn't cover death due to sickness only accidents
Adjustable Whole Life----TEST - CORRECT ANSWER: -Sold to clients with fluctuating
incomes----TEST
-Combination of term and whole life----TEST
-Coverage may not be increased without physical exam---TEST
Annuity Pay-Out Options - CORRECT ANSWER: -Contractual; cannot be changed once
selected
-Amount received in excess of cost are taxable as ordinary income
-For life
-Cash surrender under age 59.5 subject to IRS 10% penalty
-Non-qualified=Funded with after tax dollars
,Assignments - CORRECT ANSWER: -Absolute assignment is permanent change of
ownership--TEST
-Collateral assignment is temporary
-Often used when insurance is required as a condition to a loan---TEST
Beneficiary Designations - CORRECT ANSWER: -Primary beneficiary receives
proceeds when insured dies
-Can have as many primaries as wanted
-Guardian must be appointed for children
-Company may designate irrevocable beneficiary
-Common disaster clause
-Applies if insured and primary beneficiary both day as a result of the same accident
-Insured always dies last even if not the case
-Primary beneficiary must die within 10 days for clause to be enacted
Business Disability Buyout Policy - CORRECT ANSWER: -Utilizes buy-sell agreement
-Lump Sum
-Paid to able partner
-Premiums not tax deductible
-Proceeds not taxable
Business Overhead Expense Policy (BOE) - CORRECT ANSWER: -Includes on going
business expenses ex. rent, wages, utilities
-Premiums tax deductible
Changes in the Application - CORRECT ANSWER: Can never make changes unless
the applicants initials have changed
COAL - CORRECT ANSWER: -Four elements required to have a legal contract
-C=Consideration
, -O=Offer
-A=Acceptance
-L=Legal
Collecting Initial Premiums & Issuing Conditional Receipts - CORRECT ANSWER: -
Producers gives applicant a conditional receipt
-C.O.D. Collect on delivery submittal applications
-No coverage exists since no premium has been paid
-Producer delivers policy and collects premium, now the coverage begins
-Producer also obtains a statement of good health
-Life and health producers never use binders-verbal agreement, they are not allowed
Combination Plans & Life Insurance Policy Variations - CORRECT ANSWER: -Joint Life
Policy
-Survivorship Life Policy
Consequences of Accepting an Incomplete Application - CORRECT ANSWER: -
Constitutes a waiver, the voluntary act of giving up legal rights
-Estoppel- Inability to enforce legal rights once given up - 2 years
Consideration - CORRECT ANSWER: -Required for legal contract
-Applicant's consideration is the premium paid + applicant's statements on application
-Insurer's consideration is their promise to provide coverage in return
Consideration Clause - CORRECT ANSWER: -An exchange of values
-Pays first premium then answers questions on application
-Representation is truth to the best of your knowledge
-Company agrees to provide coverage in exchange
-No coverage unless premium is paid
