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Colorado Life Insurance Final Exam
Return of premium - The life insurance rider that pays the face amount plus the total premiums paid into the policy is known as: Foreign or alien - What kind of company can the Commissioner file a complaint to enjoin and restrain from continuing violations of the insurance regulations of Colorado? Yes, the interest can be paid annually, or added to the loan. - Does a loan on the cash value of a life insurance policy accrue interest, and if so, how is the interest handled? Needs - What approach calculates the amount of money a family needs immediately upon the death of the insured to pay for their expenses and basic necessities? A 41 year old lawyer who wants a policy to pay his mortgage if he dies (decreasing term life generally is used as mortgage insurance) - A decreasing term life policy would be the most appropriate for: 30 days - A producer or business entity shall report to the Commissioner any administrative action taken against the producer within: Assignment - Richard is thinking about transferring some of the ownership rights of his policy to his brother Randy. What term is used for this type of transfer? Term policy - Jeff has limited financial resources, but finds himself in a position where he needs a good deal of protection. A __________would probably best suit his needs at this time. November 7 - On November 5, Zoe fills out an application for a life policy. On November 6, the agent accepts the premium for the policy. The policy is delivered on November 7. Which date does the Free Look period start? 24 hours - Insurance producers must complete how many hours of continuing education each licensing period?
Risk classification - Jacob, James and Jonathan are triplets, and all applied for the same type of insurance coverage at the same time. For James and Jonathan the rates were the same. Jacob's rate was quite a bit higher. What is the most likely reason for this difference? Variable annuity - If the cash values of an annuity are invested in securities, it is a: Defamation - If an agent were to publish literature that is false or maliciously critical of another insurer calculated to injure a person engaged in the business of insurance, the agent would be committing: Other agents - An agent has a fiduciary responsibility to all the following, EXCEPT: Cash surrender - Alex's life policy lapsed, which Nonforfeiture option would the insurer send him the value of the policy? Variable universal life - Investment risk is completely taken by the policyowner is what type policy? The value of nonforfeiture options may decrease. - Jennifer made an additional premium payment on her Adjustable Life policy. Which of the following is not a way that her policy is affected by this payment? Contributory - What type group plan requires 75% participation? Primary - If more than one beneficiary is named, who is the first in line? In life insurance, insurable interest must be present at the time of: - Application MECs (Modified Endowment Contracts) - Over-funded life insurance policies where the proceeds are subject to taxation are called: First - After what policy year of any life insurance policy, can suicide of the policyowner not be used as defense against the payment of benefits?
30 days - How many days does an insurance producer have to report to the Commissioner any administrative action taken against them as well as any criminal prosecution that occurs in another jurisdiction? Representations - When Jason filled out his application his statements had to be ______________ to be considered legal. Survivorship life - Phil and Sarah bought a life policy in which both are insured. Sarah dies before Phil. If the policy pays the death benefit after Phil dies, it is a: Consideration Clause - The policyowner's obligation to pay the premium is the: The entire contract - The fact that the application is part of the policy is stated in: Both the applicant and the producer - Insurance producers must provide any applicant who has existing policies with a written notice of the replacement regulations which must be signed by: 12 - month period - A license is considered to be used for controlled business if the total amount of premiums on controlled business would exceed the total amount of premiums on all other insurance business during any: Key person insurance - The Beauty Shop Cosmetic Company purchases a life insurance policy on Anna, the company's leading salesperson. Which business continuation plan does this company have? His beneficiary will receive the full death benefit. - Blake died 20 days after his group life insurance coverage was terminated. He did not apply for individual coverage. Which of the following is true? A life insurance application requires the agent, proposed insured, and the policy owner if different from the insured to sign it. - Life insurance applications require a signature from Settlement options - The manner in which the proceeds of a life policy are handled are specified in what provision?
For 2 years - If a license is revoked, an insurance producer will not be eligible to apply for a new license: Guaranteed insurability - The rider that you would pick if you want to be able to add coverage in the future, without having to show proof of insurability: 2% - From the date of death to the date of the claim settlement, the annual rate of interest paid on death benefits is what percentage above the federal discount rate? Renewability is the insurer's option. - Jamie has a renewable term policy. Which of the following is not an incorrect statement about this type of policy. Application - What is the biggest source of information used in underwriting? Sex - Which of the following factors does not influence the amount that an individual receives as monthly income under Social Security? January 22, after the statement of good health is signed, and the initial premium is paid. - On January 3, an application is submitted without the initial premium. The insurer requires a medical exam, and it is completed on January 15. On January 20, the insurer issued the policy standard, and the producer delivers it on January 22. When is coverage effective? Cost of death protection deducted and current interest rate credited - What are the two most common adjustments made during a month with a universal life insurance policy? Explain the issue and collect an additional premium. - An insurance applicant submits an application with a premium. After underwriting, the insurer sends back the policy, rated, with an impairment rider. What should the producer tell the applicant at delivery? The grace period provision - Kim's policy remained in force for a certain number of days even though she forgot to pay the premium. The provision that allows this is called: Shares of stock - No insurance producer may make statements which misrepresent any insurance policy as being:
Automatic premium loan - Which of the following could be used to prevent a lapse in the payment of life insurance premiums? A group formed for the purpose of obtaining insurance - Which of the following groups is ineligible for group life insurance? Death - Colorado requires producers to avoid the use of all the following words, EXCEPT: As often as he deems necessary - How often can the Commissioner conduct a financial examination of a licensed insurer? To lower the cost of insurance - The Colorado Insurance Fraud Statute designed to accomplish all of the following, EXCEPT: At least 5 years or until the next examination by the Department, whichever is later - How much time must a replacing insurer that uses producers be able to produce copies of the notification regarding replacement? Rebating - An agent offering to waive the prospective client's first life insurance premium is engaging in which of the following unfair practices? Revocable - The beneficiary designation that allows the policy to be changed without the beneficiary's consent: A person who solicits, negotiates, effects, procures, delivers, renews, or continues policies of insurance in Colorado - An insurance producer includes which of the following people? The application does not include the premium - In a life policy, a statement of good health is needed when: Asking for the insured's signature on claim documents - Which of the following is NOT an unfair claim settlement or compromise practice?
Flexible premium deferred annuity - Becky is a 31 years old and knows she needs to start a retirement plan. She currently works in a bakery and is worried about how inflation would affect her retirement plan. Which annuity would be a good fit for her needs? The signature of the insured (unless not an adult), and the agent. - An insurance application is not complete unless it has: Class 1 Misdemeanor - Unauthorized practice of insurance is a: Group - What type of premiums payment can employers deduct as an ordinary business expense? Younger siblings of the policyholder - Riders covering additional insureds can be added to life policies and cover all but which of the following? Fiduciary - All money received by a licensee is received in what type of capacity? Policy loans are taxable as income. - Which of the following statements is not true about the tax liabilities for individual life insurance policies? Life annuity - What kind of contract pays an income to an insured until the insured dies? Coercion - What unfair trade practice manipulates through the prospect of something desirable? 15 days - All life insurance policies have a free look period of how many days? Consumer's insurance needs and financial objectives - When an insurance producer recommends a suitable annuity product to a customer, on what should the producer base their recommendation? Renewable term - Gregory recently purchased a one-year term insurance policy. At the end of the year, he can purchase an identical policy without having to show proof of insurability. Why type of policy did he purchase?
