CO Life & Health common mistakes
CO Life & Health · Understand the traps and how to avoid them.
When a beneficiary question involves a child dying before the insured, the candidate counts living people equally instead of tracing family branches.
The candidate memorized 'per stirpes' and 'per capita' as labels but never practiced applying them to a family tree.
What to do instead
Draw a three-generation family tree for every beneficiary question and ask where the deceased child's share goes: down the branch for per stirpes, only to living beneficiaries for per capita.
The candidate treats the grace period and reinstatement as the same event and misses which one preserves coverage before lapse.
Both terms appear in lapse-and-premium questions, so the candidate answers from the word association rather than the timeline.
What to do instead
Build a timeline: premium due, grace period, lapse, reinstatement. Attach the requirement to each stage: grace period keeps the policy in force; reinstatement after lapse usually requires evidence of insurability and back premiums with interest.
The candidate mixes up the incontestability clause and the suicide clause because both often use a two-year period.
The candidate remembers the number but not the purpose, so a question about misrepresentation gets answered with the suicide rule or vice versa.
What to do instead
Make a three-column table: clause, what it limits, and what event starts the clock. Incontestability limits the insurer's ability to contest the policy for misrepresentation; the suicide clause limits payout if death is by suicide within the stated period.
The candidate assumes the owner can always change the beneficiary without asking whether the designation is revocable or irrevocable.
Most personal policies use revocable beneficiaries, so the candidate overgeneralizes from the common case.
What to do instead
Before answering any beneficiary-change question, identify the owner and the designation type. Revocable means the owner can change it alone; irrevocable means the beneficiary's consent is generally required.
The candidate confuses a renewable term policy with a convertible term policy.
Both features let the insured continue coverage without new evidence of insurability, so the candidate treats them as interchangeable.
What to do instead
Contrast the output: renewal continues term coverage, usually at a higher premium; conversion exchanges the term policy for a permanent policy. Ask what the insured ends up with after exercising the right.
The candidate treats coinsurance and a copayment as the same kind of cost sharing.
Both appear as 'what the insured pays,' and the candidate does not separate a percentage from a fixed dollar amount.
What to do instead
For every cost-sharing question, label the amount: fixed dollar = copay; percentage of covered expense after deductible = coinsurance. Then check whether the deductible applies before the coinsurance.
The candidate applies the deductible to every service or treats the out-of-pocket maximum as identical to the deductible.
The candidate memorizes 'deductible first' as a slogan and does not track preventive-care exceptions or the cumulative nature of the out-of-pocket limit.
What to do instead
Separate three amounts: deductible (what must be paid before certain benefits), out-of-pocket maximum (the annual cap on covered cost sharing), and premiums (never part of the out-of-pocket maximum). Check the question for preventive care or a listed exception.
The candidate answers HMO-versus-PPO questions by network name alone and ignores referral and out-of-network rules.
Both are managed-care plans, so the candidate relies on a vague 'HMOs are stricter' impression instead of the specific operational difference.
What to do instead
Compare on four points: primary care gatekeeper, referral requirement, out-of-network coverage, and claim paperwork. HMOs typically require a PCP and referrals and limit non-emergency out-of-network care; PPOs typically do not require referrals but charge more out of network.
The candidate uses 'guaranteed renewable' and 'noncancellable' as if both prevent premium increases.
Both sound like strong consumer protections, and the candidate does not separate the insurer's right to cancel from its right to raise rates.
What to do instead
State the two rights separately: guaranteed renewable means the insurer cannot cancel but can raise premiums by class; noncancellable means the insurer cannot cancel and cannot raise premiums if premiums are paid. Match the term to the right being tested.
The candidate picks a coordination-of-benefits answer by guessing which plan 'seems primary' instead of applying the plan rules in the question.
Coordination of benefits has several fact patterns, and the candidate uses a single remembered rule for every situation.
What to do instead
Identify the relationship first: dependent child, active employee versus retiree, or two policies on the same adult. Then apply the stated rule: for dependent children many plans use the birthday rule, and an active employee plan often pays before a retiree plan. If the question gives a rule, use that rule rather than a default.