COLORADO LIFE INSURANCE EXAMS SCRIPT QUESTIONS
AND ANSWERS 2025/2026
✔✔Buy-Sell Agreement - ✔✔A legal contract that determines what will be done with a
business in the event that an owner dies or becomes disabled.
✔✔Insurable Interest - ✔✔something of value that, if lost, would cause you financial
harm
✔✔Blood or Business - ✔✔Insurable Interest
✔✔Types of Term Insurance - ✔✔level, increasing, decreasing
✔✔Level Term Insurance - ✔✔pays the same death benefit over the term of the policy
✔✔Increasing Term Insurance - ✔✔the death benefit increases over the life of the
policy, and the premium remains level
✔✔Decreasing Term Insurance - ✔✔term insurance in which the annual premium
remains constant but the face amount of the policy declines each year
✔✔According to the Entire Contract provision, a policy must contain: - ✔✔A copy of the
original application for insurance. An insurance contract must contain a copy of the
original application.
✔✔Another name for a substandard risk classification is: - ✔✔Rated. Substandard risk
classification is also referred to as "rated" since these policies could be issued with the
premium rated-up, resulting in a higher premium.
✔✔What is the official name for the Social Security program? - ✔✔Social Security is
formally called Old Age Survivors Disability Insurance - OASDI.
✔✔The policyowner wants to make sure that upon his death, the life policy will pay a
portion of the proceeds annually to his spouse, but that the principal will be paid to their
children when they reach a certain age. Which settlement option should the policyowner
choose? - ✔✔Interest only option With the interest-only option, the insurance company
retains the policy proceeds and pays interest on the proceeds to the recipient
(beneficiary) at regular intervals.
✔✔Which two terms are associated directly with the premium? - ✔✔Level or flexible A
level premium is one in which the premium payment never changes. A flexible premium
is found in Universal life policies where the insured changes their premium payment.
, ✔✔The main difference between immediate and deferred annuities is: - ✔✔When the
income payments begin. The main difference between immediate and deferred
annuities is when the income payments begin. Immediate annuities will begin payments
within the first year, while deferred annuities will not begin payments until sometime
after the first year.
✔✔If a life insurance policy develops cash value faster than a seven-pay whole life
contract, it is: - ✔✔A Modified Endowment Contract. Any cash value life insurance
policy that develops cash value faster than a seven-pay whole life contract is called a
Modified Endowment Contract. It loses the benefits of a standard life contract.
✔✔Why should the producer personally deliver the policy when the first premium has
already been paid? - ✔✔To help the insured understand all aspects of the contract. It is
the producer's responsibility to make sure that the policy is understood by the insured
and all of their questions are satisfied, and the delivery receipt is signed.
✔✔Which of the following would be deducted from the death benefit paid to a
beneficiary, if a partial accelerated death benefit had been paid while the insured was
still alive? - ✔✔Amount paid with the accelerated benefit, plus the earnings lost by the
insurance company in interest income from the accelerated benefit. If an insured
withdraws a portion of the death benefit by the use of this rider, the benefit payable at
death will be reduced by that amount, plus the amount of earnings lost by the insurance
company in interest income.
✔✔Which nonforfeiture option provides coverage for the longest period of time? -
✔✔Reduced paid-up, The reduced paid-up nonforfeiture option would provide
protection until the insured reaches 100, but the face amount is reduced to what the
cash would buy.
✔✔Which of the following allows the insurer to relieve a minor insured from premium
payments if the minor's parents have died or become disabled? - ✔✔Payor Benefit, If
the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies,
the insurer will waive the premiums until the minor reaches a certain age, such as 21.
✔✔What is the number of credits required for fully insured status for Social Security
disability benefits? - ✔✔40, The term "fully insured" refers to someone who has earned
40 quarters of coverage (10 years of work times 4 maximum annual credits).
✔✔The term "illustration" in a life insurance policy refers to: - ✔✔A presentation of
nonguaranteed elements of a policy. The term "illustration" means a presentation or
depiction that includes nonguaranteed elements of a policy of individual or group life
insurance over a period of years.
AND ANSWERS 2025/2026
✔✔Buy-Sell Agreement - ✔✔A legal contract that determines what will be done with a
business in the event that an owner dies or becomes disabled.
✔✔Insurable Interest - ✔✔something of value that, if lost, would cause you financial
harm
✔✔Blood or Business - ✔✔Insurable Interest
✔✔Types of Term Insurance - ✔✔level, increasing, decreasing
✔✔Level Term Insurance - ✔✔pays the same death benefit over the term of the policy
✔✔Increasing Term Insurance - ✔✔the death benefit increases over the life of the
policy, and the premium remains level
✔✔Decreasing Term Insurance - ✔✔term insurance in which the annual premium
remains constant but the face amount of the policy declines each year
✔✔According to the Entire Contract provision, a policy must contain: - ✔✔A copy of the
original application for insurance. An insurance contract must contain a copy of the
original application.
✔✔Another name for a substandard risk classification is: - ✔✔Rated. Substandard risk
classification is also referred to as "rated" since these policies could be issued with the
premium rated-up, resulting in a higher premium.
✔✔What is the official name for the Social Security program? - ✔✔Social Security is
formally called Old Age Survivors Disability Insurance - OASDI.
✔✔The policyowner wants to make sure that upon his death, the life policy will pay a
portion of the proceeds annually to his spouse, but that the principal will be paid to their
children when they reach a certain age. Which settlement option should the policyowner
choose? - ✔✔Interest only option With the interest-only option, the insurance company
retains the policy proceeds and pays interest on the proceeds to the recipient
(beneficiary) at regular intervals.
✔✔Which two terms are associated directly with the premium? - ✔✔Level or flexible A
level premium is one in which the premium payment never changes. A flexible premium
is found in Universal life policies where the insured changes their premium payment.
, ✔✔The main difference between immediate and deferred annuities is: - ✔✔When the
income payments begin. The main difference between immediate and deferred
annuities is when the income payments begin. Immediate annuities will begin payments
within the first year, while deferred annuities will not begin payments until sometime
after the first year.
✔✔If a life insurance policy develops cash value faster than a seven-pay whole life
contract, it is: - ✔✔A Modified Endowment Contract. Any cash value life insurance
policy that develops cash value faster than a seven-pay whole life contract is called a
Modified Endowment Contract. It loses the benefits of a standard life contract.
✔✔Why should the producer personally deliver the policy when the first premium has
already been paid? - ✔✔To help the insured understand all aspects of the contract. It is
the producer's responsibility to make sure that the policy is understood by the insured
and all of their questions are satisfied, and the delivery receipt is signed.
✔✔Which of the following would be deducted from the death benefit paid to a
beneficiary, if a partial accelerated death benefit had been paid while the insured was
still alive? - ✔✔Amount paid with the accelerated benefit, plus the earnings lost by the
insurance company in interest income from the accelerated benefit. If an insured
withdraws a portion of the death benefit by the use of this rider, the benefit payable at
death will be reduced by that amount, plus the amount of earnings lost by the insurance
company in interest income.
✔✔Which nonforfeiture option provides coverage for the longest period of time? -
✔✔Reduced paid-up, The reduced paid-up nonforfeiture option would provide
protection until the insured reaches 100, but the face amount is reduced to what the
cash would buy.
✔✔Which of the following allows the insurer to relieve a minor insured from premium
payments if the minor's parents have died or become disabled? - ✔✔Payor Benefit, If
the payor (usually a parent or guardian) becomes disabled for at least 6 months or dies,
the insurer will waive the premiums until the minor reaches a certain age, such as 21.
✔✔What is the number of credits required for fully insured status for Social Security
disability benefits? - ✔✔40, The term "fully insured" refers to someone who has earned
40 quarters of coverage (10 years of work times 4 maximum annual credits).
✔✔The term "illustration" in a life insurance policy refers to: - ✔✔A presentation of
nonguaranteed elements of a policy. The term "illustration" means a presentation or
depiction that includes nonguaranteed elements of a policy of individual or group life
insurance over a period of years.
