Colorado Life & Health Insurance Exam |
Correctly Answered and Graded A+ |
2025/2026 Guide
Waiver of Premium & Waiver of Premium with Disability Income (WP)
- Correct Answer - -Type of Insurance Rider=Add on to coverage
-Disability income insurance added to a life policy
-6-month waiting period; if satisfy waiting period insurer will reimburse
insured for paid premiums within that period
-Premiums waived, and policy still enforced as long as insured is disable
-If added with disability income, policy pays insured's net income during
disability
Guaranteed Insurability Rider(GIR)
- Correct Answer - -Type of Insurance Rider
-Enables insured to increase coverage later regardless of health
-Option dates usually occur at 2 or 3 year intervals, if skipped the date is
lost
-At each increase, rates are based upon current age
Payor Benefit Rider
- Correct Answer - -Type of Insurance Rider
-Added to policy on child
,-Waives premium if payor dies or becomes disabled
-Expires when child reaches age 18-----TEST
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
Term Insurance Rider - Correct Answer - -Type of Insurance Rider
-Often added to whole life policy to increase coverage
-Some whole, some term
-Term portion will not cover unless insured dies within the term period
Other Insured Rider---TEST - Correct Answer - -Type of Insurance Rider
-Added to whole life policy under certain circumstances
-Adds coverage for new spouse on whole life
-Subject to insurability (Physical Exam)
-Could be used to add coverage on newborn, on current policy, term
insurance rider on child
Long-Term Care Rider - Correct Answer - -Type of Insurance Rider
,-Costs extra and may be added to a cash value policy
-Allows policy owner to take money out of policy's cash value to pay for
qualifying nursing home or home health care
Return of Premium Rider - Correct Answer - -Type of Insurance Rider
-Same as term
-Could be added to term depending upon company
-Also called return of premium term insurance (ROPT)
-If insured should live to end of term, premium is returned tax-free
Insurable Interest - Correct Answer - -Must exist at the time of
application
-May be based on economics or kinship
Medical Information and Consumer Reports - Correct Answer - -Verifies
finances, credit history, and character
-Verifies medical history through ordering Medical Information Bureau
(MIB) report
-Insurers who are MIB members report adverse health information to
them
-MIB procedures require a disclosure to the applicant of data in MIB files
upon written request of applicant
, Fair Credit Reporting Act---TEST - Correct Answer - -Federal law
protecting applicants privacy
-Applies when ordering consumer reports on applicants
-Must give applicant pre-notification
-Obtain applicant's written consent
-If insurer takes adverse action based on report:
-Post notification must be given to applicant
-Must state specific reason
-State where a copy can be found
-Insurer cannot give applicant copy of form
-If report wrong, applicant may sue to have it corrected
Risk Classification - Correct Answer - -Average client known as standard
risk
-Nonstandard or substandard pay higher rate
-Preferred risk client receives a lower than standard rate
-Most risk classification is done by adding premium surcharges
-May not use marital status as an underwriting factor--TEST
Stranger-Originated Life Insurance (STOLI)/ Investor-Originated Life
Insurance (IOLI) - Correct Answer - -Both illegal in Colorado because of
insurable interest does not exist
Correctly Answered and Graded A+ |
2025/2026 Guide
Waiver of Premium & Waiver of Premium with Disability Income (WP)
- Correct Answer - -Type of Insurance Rider=Add on to coverage
-Disability income insurance added to a life policy
-6-month waiting period; if satisfy waiting period insurer will reimburse
insured for paid premiums within that period
-Premiums waived, and policy still enforced as long as insured is disable
-If added with disability income, policy pays insured's net income during
disability
Guaranteed Insurability Rider(GIR)
- Correct Answer - -Type of Insurance Rider
-Enables insured to increase coverage later regardless of health
-Option dates usually occur at 2 or 3 year intervals, if skipped the date is
lost
-At each increase, rates are based upon current age
Payor Benefit Rider
- Correct Answer - -Type of Insurance Rider
-Added to policy on child
,-Waives premium if payor dies or becomes disabled
-Expires when child reaches age 18-----TEST
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
Term Insurance Rider - Correct Answer - -Type of Insurance Rider
-Often added to whole life policy to increase coverage
-Some whole, some term
-Term portion will not cover unless insured dies within the term period
Other Insured Rider---TEST - Correct Answer - -Type of Insurance Rider
-Added to whole life policy under certain circumstances
-Adds coverage for new spouse on whole life
-Subject to insurability (Physical Exam)
-Could be used to add coverage on newborn, on current policy, term
insurance rider on child
Long-Term Care Rider - Correct Answer - -Type of Insurance Rider
,-Costs extra and may be added to a cash value policy
-Allows policy owner to take money out of policy's cash value to pay for
qualifying nursing home or home health care
Return of Premium Rider - Correct Answer - -Type of Insurance Rider
-Same as term
-Could be added to term depending upon company
-Also called return of premium term insurance (ROPT)
-If insured should live to end of term, premium is returned tax-free
Insurable Interest - Correct Answer - -Must exist at the time of
application
-May be based on economics or kinship
Medical Information and Consumer Reports - Correct Answer - -Verifies
finances, credit history, and character
-Verifies medical history through ordering Medical Information Bureau
(MIB) report
-Insurers who are MIB members report adverse health information to
them
-MIB procedures require a disclosure to the applicant of data in MIB files
upon written request of applicant
, Fair Credit Reporting Act---TEST - Correct Answer - -Federal law
protecting applicants privacy
-Applies when ordering consumer reports on applicants
-Must give applicant pre-notification
-Obtain applicant's written consent
-If insurer takes adverse action based on report:
-Post notification must be given to applicant
-Must state specific reason
-State where a copy can be found
-Insurer cannot give applicant copy of form
-If report wrong, applicant may sue to have it corrected
Risk Classification - Correct Answer - -Average client known as standard
risk
-Nonstandard or substandard pay higher rate
-Preferred risk client receives a lower than standard rate
-Most risk classification is done by adding premium surcharges
-May not use marital status as an underwriting factor--TEST
Stranger-Originated Life Insurance (STOLI)/ Investor-Originated Life
Insurance (IOLI) - Correct Answer - -Both illegal in Colorado because of
insurable interest does not exist
