Life & Health Insurance Exam Colorado Latest Update 2024-2025 Actual Exam from Credible Source with 110 Questions and 100% Verified Detailed Correct Answers Guaranteed
Accelerated Death Benefits - CORRECT ANSWER: -Also known as Living Benefits
Rider, 12 months or less -Apply when insured gets a terminal illness -Insurer will pay out a portion of death benefit -Face amount paid to beneficiary at death is reduced by the amount paid out while living -Money must be used to pay hospital bills
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
Adjustable Whole Life----TEST - CORRECT ANSWER: -Sold to clients with fluctuating incomes----TEST -Combination of term and whole life----TEST -Coverage may not be increased without physical exam---TEST
Annuity Pay-Out Options - CORRECT ANSWER: -Contractual; cannot be changed once
selected -Amount received in excess of cost are taxable as ordinary income -For life -Cash surrender under age 59.5 subject to IRS 10% penalty -Non-qualified=Funded with after tax dollars
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Assignments - CORRECT ANSWER: -Absolute assignment is permanent change of
ownership--TEST -Collateral assignment is temporary -Often used when insurance is required as a condition to a loan---TEST
Beneficiary Designations - CORRECT 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
Business Disability Buyout Policy - CORRECT ANSWER: -Utilizes buy-sell agreement -Lump Sum -Paid to able partner -Premiums not tax deductible -Proceeds not taxable
Business Overhead Expense Policy (BOE) - CORRECT ANSWER: -Includes on going
business expenses ex. rent, wages, utilities -Premiums tax deductible
Changes in the Application - CORRECT ANSWER: Can never make changes unless
the applicants initials have changed
COAL - CORRECT ANSWER: -Four elements required to have a legal contract
-C=Consideration 2 / 3
-O=Offer -A=Acceptance -L=Legal
Collecting Initial Premiums & Issuing Conditional Receipts - CORRECT ANSWER: - Producers gives applicant a conditional receipt -C.O.D. Collect on delivery submittal applications -No coverage exists since no premium has been paid -Producer delivers policy and collects premium, now the coverage begins -Producer also obtains a statement of good health -Life and health producers never use binders-verbal agreement, they are not allowed
Combination Plans & Life Insurance Policy Variations - CORRECT ANSWER: -Joint Life Policy -Survivorship Life Policy
Consequences of Accepting an Incomplete Application - CORRECT ANSWER: -
Constitutes a waiver, the voluntary act of giving up legal rights -Estoppel- Inability to enforce legal rights once given up - 2 years
Consideration - CORRECT 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
Consideration Clause - CORRECT ANSWER: -An exchange of values
-Pays first premium then answers questions on application -Representation is truth to the best of your knowledge -Company agrees to provide coverage in exchange -No coverage unless premium is paid
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