Colorado Life & Health Insurance Exam

Traditional Whole Life

(Ans-

-Ordinary (Straight) Life

-Limited-Pay & Single-Premium Whole Life

-Adjustable Whole Life

Ordinary (Straight) Life

(Ans-

-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

(Ans-

-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

(Ans-

-Sold to clients with fluctuating incomes----TEST