LIFE HEALTH INSURANCE EXAM COLORADO

PDF Download LIFE & HEALTH INSURANCE EXAM COLORADO Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Beneficiary Designations

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

Question 2: Coverage Begins When

Answer:

-When all conditions have been satisfied or when the underwriter approves the application ; whichever occurs first -Never any coverage unless premium has been paid

Question 3: Types of Dividend Options

Answer:

-Cash -Interest--the interest is taxable -Paid-up Additions -Apply to premium when due -One-year term insurance -New additional term policy expires in 1 year

-Selected by people who might die that year

Question 4: Joint and Survivor Annuity

Answer:

-Pays until the last party dies -Payment often adjusted upon the death of the first party because of age difference

Question 5: Discrimination in Retirement Plans

Answer:

-No discrimination may exist in favor of higher paid workers -May be set up either as a defined benefit-everyone gets the same benefit-or as a defined contribution-401 K -everyone gets the same percentage contributed

Question 6: Dividend and Dividend Options

Answer:

-Stock vs. Mutual -Own insurance in stock, no dividend -Own insurance in mutual, yes dividend -Dividends paid by a mutual insurer are not taxable because it is a return on an over payment of a premium -Dividend options may be changed at any time by owner

Question 7: Split Dollar Life Insurance

Answer:

A type of non-qualified plan

Question 8: Free Look

Answer:

-Enables insured to examine policy after delivery -May return policy and get full refund if not satisfied---TEST -15 days to do so

Question 9: Interest/Market Sensitive Whole Life Products

Answer:

-Universal Whole life -Variable Whole life -Variable/Universal Whole life -Equity-Indexed Life

Question 10: Return of Premium Rider

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

Question 11: Term Life

Answer:

-Level Term -Decreasing Term -Increasing Term

Question 12: Traditional Whole Life

Answer:

-Ordinary (Straight) Life -Limited-Pay & Single-Premium Whole Life -Adjustable Whole Life

Question 13: Group Life Insurance

Answer:

-Same for life and health -Employee receives certificate of insurance stating coverage -Convertible to whole life within 31 days of termination without evidence of insurability -Conversion based on current attained age of insured -Can only convert amount of policy not more -Cannot convert term to term -75% of eligible employees must participate (Most)---TEST -100% of eligible employees must participate (All)--TEST

Question 14: Consideration

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

Question 15: Risk Classification

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

Question 16: Insurable Interest

Answer:

-Must exist at the time of application -May be based on economics or kinship

Question 17: Types of Annuities

Answer:

-Single Premium Deferred Annuity (SPDA) -Level Premium Annuity -Flexible Premium Annuity -Immediate Annuity -Fixed Annuity -Regular -Variable Annuity -Indexed Annuity

Question 18: Ordinary (Straight) Life

Answer:

-Until 100 or Death, whichever comes first -Permanent Protection -Rates & benefits based on law of large numbers (Mortality Rate) -Guaranteed, tax-deferred interest rate -Premium level, company's risk goes down as cash value goes up -Insurer keeps the cash value if death to offset risk -Lowest net cost in long run -Client has access to cash through cash surrender or policy loan -Rates are per unit of protection (1,000 is 1 unit)---TEST -Cash value is guaranteed -Cash value will equal face amount at policy maturity