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Life & Health Insurance Exam Colorado Questions with correct Answers 2023
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Life & Health Insurance Exam ColoradoQuestions with correct Answers 2023
Traditional Whole Life - --Ordinary (Straight) Life
-Limited-Pay & Single-Premium Whole Life
-Adjustable Whole Life
-Ordinary (Straight) Life - --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
-Limited-Pay & Single-Premium Whole Life - --Premium paying period is
shorter
-Cash value still equals face amount at age 100
-20 pay life will be paid up in 20 years PL
-Life Paid up at age 65, will be paid up at 65 LP
-A single premium policy will have an immediate cash value (1-pay life)---
TEST
-Adjustable Whole Life----TEST - --Sold to clients with fluctuating incomes----
TEST
-Combination of term and whole life----TEST
-Coverage may not be increased without physical exam---TEST
-Interest/Market Sensitive Whole Life Products - --Universal Whole life
-Variable Whole life
-Variable/Universal Whole life
-Equity-Indexed Life
-Universal Whole life - --Guaranteed minimum interest rates
-Extreme flexibility regarding premium PMTs----TEST
-Most flexible product
-Target premium based on projected earnings
-Option A UL has level death benefits
-Option B UL will pay beneficiary both face amount + cash value
, -Variable Whole life - --Cash value deposited into a separate account
-Requires FINRA series 6 or 7 to sell
-Used to be called NASD
-Regulated by SEC
-Regulated by FINRA (Financial Industry Regulatory Authority)
-NYSE license not required
-Minimum death benefit (face amount) is guaranteed---TEST
-Has fixed premium---TEST
-Variable/Universal Whole life - --Requires Finra(series 6 or 7) licenses to
sell
-Allows client to self-direct cash values into sub-account---TEST
-Flexible premium
-Equity-Indexed Life - --cash value, where minimum death benefit is
guaranteed as well as the minimum earning on the cash value in the general
account
-Securities license is not required
-Fixed Premium
-Term Life - --Level Term
-Decreasing Term
-Increasing Term
-General Features of Term Insurance - --Premium goes up every year
-May be converted to whole life at current attained age regardless of health
-May be renewable up to certain age without physical
-Level Term - -Both premium and face amount are level for period of time
-Decreasing Term - --Face amount goes down but premium remains the
same
-Usually convertible to whole life regardless of health
-Premium stays the same but cost increases as face amount decreases
-Increasing Term - --Face amount goes up instead of down
-Allows beneficiary to receive the face amount + premiums or cash values
-Also known as Universal Life option B
-Special features of Term Insurance - --Renewable/Convertible to whole up
to certain date or age regardless of health
-Conversion based on current age
-May only convert to more expensive option
-Cannot convert to term
-Cannot convert to more coverage than you have
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