COLORADO INSURANCE EXAM-LIFE

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COLORADO INSURANCE EXAM-LIFE

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -72 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Issuing sales material with exaggerated statements about policy benefits is an example of

Answer:

misrepresentation Question 2: How long is the free-look period for life insurance policies issued in Colorado?

Answer:

15 days Question 3: An individual has just borrowed $10,000 from his bank on a 5-year installment loan requiring monthly payments. What type of life insurance policy would be best suited to this situation?

Answer:

Decreasing term

Question 4: The paid-up addition option uses the dividend

Answer:

To purchase a smaller amount of the same type of insurance as the original policy.

Question 5: Reflecting a premium received as a business asset on the producer's financial statement Using balances in customer accounts as collateral for a loan to a producer Remitting a return premium to an insured 31 days after the producer received it from the insurer

Answer:

fiduciary funds

Question 6: rebating, defamation, and boycotting are examples of

Answer:

unfair trade practices in the business of insurance

Question 7: Which policy component decreases in decreasing term insurance?

Answer:

face amount

Question 8: Which policy components contains the company's promise to pay?

Answer:

insuring clause Question 9: The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Answer:

reduction of premium Question 10: An insured has had a life insurance policy that he purchased 3 years ago when he was 40 years old. He is killed in an automobile accident and it is discovered that he is actually 45 years old, and not 43, as stated on the application. What will the company do?`

Answer:

pay a reduced death benefit

Question 11: What's NOT a legal example of insurable interest?

Answer:

STOLI agreement

Question 12: In a survivorship life policy, when does the insurer pay the death benefit?

Answer:

Upon the last death Question 13: Methods used to pay the death benefits to a beneficiary upon the insured's death are called

Answer:

Settlement Options Question 14: All insurers that terminate employment with a producer are required to notify the Commissioner within how many days following the effective date of the termination?

Answer:

30 days

Question 15: Premiums are not tax deductible as a business expense.

Answer:

separate accounts Question 16: The policyowner pays for her life insurance annually. Until now, she has collected a nontaxable dividend check each year. She has decided that she would rather use the dividends to help pay for her next premium. What option would allow her to do this?

Answer:

Reduction of premium

Question 17: Third-party ownership

Answer:

appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner Question 18: Within how many days of requesting an investigative consumer report must an insurer notify the consumer in writing that the report will be obtained?

Answer:

3

Question 19: Employer contributions made to a qualified plan

Answer:

Are subject to vesting requirements.

Question 20: dividends are participating policies are

Answer:

dividends are not taxable

Question 21: Equity indexed annuities

Answer:

seek higher returns Question 22: Under what circumstance will the proceeds payable under an employee's group life be taken to pay to a creditor of the employee?

Answer:

When the creditor is named as the beneficiary of the proceeds by the insured employee Question 23: Who has the right to assign incidents of ownership under a group life insurance policy?

Answer:

the individual insured Question 24: An individual with a legal interest in the continued life of the insured defines the principle known as

Answer:

insurable interest

Question 25: The regulations regarding replacement apply to

Answer:

renewable term

Question 26: What may last for the lifetime of the annuitant.

Answer:

annuity period