Kentucky Life & Health Insurance Exams (New 2024/ 2025 Updates ALL BUNDLED TOGETHER WITH COMPLETE SOLUTIONS) Questions and Verified Answers| 100 % Correct| Grade A

Kentucky Health Insurance Exam | Study
Questions and Verified Answers| 100 %
Correct| Grade A (New 2024/ 2025 Update)
QUESTION
Individuals who itemize deductions can claim deductions for medical expenses not covered by
health insurance that exceed what percent of their adjusted gross income? A. 5% B. 7% C. 10%
D. 15%
Answer:
C. 10%
QUESTION
What is another name for an Administrative Services only arrangement? A. Self funding B.
Third party administrator C. A modified fully insured plan D. Modified endowment contract
Answer:
B. Third party administrator
QUESTION
Social Security Supplement SIS or Social Security riders would provide for the payment of
income benefit in each of the situations except A. If the insured has been denied coverage under
social security B. When the amount payable under social security is more than the amount
payable under the rider. C. When used to replace or supplement benefits payable under other
social insurance programs D. When the insured is eligible for Social Security benefits but before
the benefits begin
Answer:
B. When the amount payable under social security is more than the amount payable under the
rider.

QUESTION
The provision in a health insurance policy that ensures that the insurer cannot refer to any
document that is not contained in the contract is the… A. Entire contract clause. B. Time limit on
certain defenses clause. C. Incontestability clause D. Legal action
Answer:
A. Entire contract clause
QUESTION
Which clause states that a representation may NOT be contested after a two-year period? A.
Free look. B. Noto contendere C. Grace period D. Incontestability
Answer:
D. Incontestability
QUESTION
The total of all assessments upon a member insurer for each account cannot legally exceed what
percent of the insurer’s premium received in this state during the calendar year preceding the
assessment? A. 2% B. 12% C. 5% D. 20%
Answer:
A. 2%
QUESTION
If all required conditions are met and the insured does not have Medicare hospital coverage.
Medicare Part B will cover how many home health days? A. 20 per year B. 30 per year C. 50 per
year D. Unlimited
Answer:
D. unlimited
QUESTION

The benefits received by the business in a disability buy sell policy are…A. partially taxable B.
fully taxable C. income tax free d. tax deductible
Answer:
C. income tax free
QUESTION
In reference to the standard Medicare supplement benefits plans what does the term standard
mean? A. coverage options and conditions comply but will carry from provider to provider. B.
All plans must include basic benefits a-n. C. coverage options are developed for average
individuals. D. All providers will have the same coverage options and conditions for each plan
Answer:
D. All providers will have the same coverage options and conditions for each plan.
QUESTION
The full premium was submitted with the application for life insurance, and the policy was
issued two weeks later as requested. When does the policy coverage become effective? A. as of
the first of the month after the policy issue. B. As of the policy issue date C. as of the application
date D. As of the policy delivery date
Answer:
C. as of the application date
QUESTION
Under what type of group health plan does the insurer issue the plan on one year renewable term
basis and the premium for each year only pays for that year’s coverage? A. Annual fully insured
B. convention fully insured C. modified fully insured. D. premium daily arrangement
Answer:
B. conventional fully insured.
QUESTION

An insured is involved in an accident that renders him permanently deaf, although he does not
sustain any other major injuries. The insured is still able to perform his current job. To what
extend will he receive presumptive disability benefits? A. No benefits B. Full benefits C. Partial
benefits D. full benefits for 2 years.
Answer:
B. full benefits
QUESTION
Under a disability income policies benefits are usually limited to approximately ……of the total
weekly benefit for time lost to minor surgery, consultations, etc. A. 10% B. 15% C. 20% D. 25%
Answer:
A. 10%
QUESTION
All of the following are considered to be basic benefits of an HMO plan, Except A. preventive
services B. Out of area service C. Diagnostic laboratory Services D. Prescription drugs.
Answer:
D. prescription drugs
QUESTION
How soon following the occurrence of a covered loss must an insured submit written proof of
such loss to the insurance company? A. As soon as possible B. within 20 days c. within 60 days
d. within 90 days or as soon as reasonable possible but not to exceed 1 year
Answer:
D. within 90 days or as soon as reasonably possible but not to exceed 1 year.
QUESTION
The Federal Fair credit reporting act a. regulated telemarketing. b. prevents money laundering c.
regulates consumer reports d. protects customer privacy
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Kentucky Health Insurance Exam (New
2024/ 2025 Update) Questions and Verified
Answers| 100 % Correct| Grade A
QUESTION
The Medical Information Bureau (MIB) was created to protect

Insureds from unreasonable underwriting requirements by the insurance companies.
Medical examiners that perform insurance physical examinations.
Insurance companies from adverse selection by high risk persons.
Insurance departments from lawsuits by policyowners.
Answer:
Insurance compa- nies from adverse selection by high risk persons.
QUESTION
What term is used to describe when the medical caregiver provides ser- vices to only members
or subscribers of a health organization, and contrac- tually is not allowed to treat other patients?
Closed panel
Corridor
Probationary
Open panel
Answer:
Closed panel
QUESTION
In insurance, an offer is usually made when
The insurer approves the application and receives the initial premium.
The agent hands the policy to the policyholder.
An agent explains a policy to a potential applicant.
An applicant submits an application to the insurer.
Answer:

An applicant submits an application to the insurer.
QUESTION
What is the term used for an applicant’s written request to an insurer for the company to issue a
contract, based on the information provided?

Policy Request
Insurance Request Form
Request for Insurance
Application
Answer:
Application
QUESTION
All of the following are correct about the required provisions of a health insurance policy
EXCEPT
A reinstated policy provides immediate coverage for an illness.
Proof-of-loss forms must be sent to the insured within 15 days of notice of claim.
A grace period of 31 days is found in an annual pay policy.
The entire contract clause means the signed application, policy, endorse- ments, and
attachments constitute the entire contract.
Answer:
A reinstated policy provides immediate coverage for an illness.
QUESTION
A hearing may be held when requested in writing, when required by the
Insurance Code, or when
An insurance company feels it should be required.
A foreign insurance company is involved.
The Commissioner finds it necessary.
The Governor feels it would be beneficial.
Answer:
The Commissioner finds it neces- sary.

QUESTION
Most LTC plans have which of the following features?

Variable premiums
Open enrollment
Guaranteed renewability
No elimination period
Answer:
Guaranteed renewability
QUESTION
An insured has medical insurance coverage through 2 different providers, both covering the
same expenses on an expense-incurred basis. Neither
company knows in advance that the insured has coverage through any other insurers. The insured
submits a claim to both insurers. How should the claim be handled?
Each insurer should pay a proportionate share of the claim.
One of the insurers will pay fully, while the other will not pay any benefits.
Once the insurers discover the duplicate coverage, the policies would most likely be cancelled,
and no claim paid.
The insured should receive full benefits from each insurer.
Answer:
Each insurer should pay a proportionate share of the claim.
QUESTION
What is the purpose of a conditional receipt?
It is given only to applicants who fully prepay the premium.
It is intended to provide coverage on a date prior to the policy issue.
It guarantees that a policy will be issued in the amount applied for.
It serves as proof that the applicant has been determined insurable.
Answer:
It is intended to provide coverage on a date prior to the policy issue.

QUESTION
Rose bought three policies from the same insurer. Her benefits have exceeded the maximum
allowed by the insurer. Which of the following will happen?

Full distribution of each policy’s benefit
Termination of two of the policies
Termination of all of the policies
Pro rata benefit reduction
Answer:
Pro rata benefit reduction
QUESTION
For an individual who is eligible for Medicare at age 65, and who is still employed and covered
under the employer’s plan, which of the following is true?
The employer plan is discontinued, and Medicare is primary coverage.
The employer plan continues, and Medicare is not available until the individ- ual is retired.
The employer plan is primary coverage, and Medicare is secondary cover- age.
The employer plan is secondary coverage, and Medicare is primary cover- age.
Answer:
The employer plan is primary coverage, and Medicare is secondary coverage.
QUESTION
Under the mandatory uniform provision Notice of Claim, the first notice of injury or sickness
covered under an accident and health policy must contain
A statement from the insured’s employer showing that the insured was unable to work.
An estimate of the total amount of medical and hospital expense for the loss.
A complete physician’s statement.
A statement that is sufficiently clear to identify the insured and the nature of the claim.
Answer:
A statement that is sufficiently clear to identify the insured and the nature of the claim.
QUESTION
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Kentucky Life and Health Insurance Exam
Prep| Questions and Verified Answers| 100 %
Correct| Grade A (New 2024/ 2025 Update)
QUESTION
how many days do you have to send the claim forms for filing proof of loss
Answer:
15 days
QUESTION
how long does the insurer have to pay claims
Answer:
30 days
QUESTION
what happens if insurer does not pay claim within 30 days
Answer:
must pay 12% interest and can collect attorney fees incurred to collect claim
QUESTION
how long do insurers have to acknowledge and respond to written communications relating to a
claim
Answer:
15 days

QUESTION
how long do insurers have to notify if a claim is denied
Answer:
15 days
QUESTION
IN THE TYPICAL INSURANCE SALE, WHO MAKES THE INITIAL OFFER
Answer:
the applicant makes the initial offer through the application and premium deposit
QUESTION
in what common situation would an insurer make a counteroffer to the applicant
Answer:
someone has elevated risk factors
QUESTION
identify and explain 5 legal characteristics of insurance contracts
Answer:
contract of adhesion
aleatory
personal
unilateral
conditional
QUESTION
what is the difference between a valued contract and an indemnity contract
Answer:

indemnity contract (health) pays for things at face value
valued contracts (life) will pay stated amount regardless of value
QUESTION
explain the difference between a representation and a warranty, and how they relate to statments
made by an insurance applicant
Answer:
warranty is a promise made by the insurer, a statement presented as absolute truth
representation is believed to be true to the best of the applicants knowledge
misrepresentation (lying on an app) can void a contract
QUESTION
whats the difference between a waiver and estoppel and how are they related
Answer:
waiver- when one party willingly gives up (waives) rights
estoppel- legal inability to impost a right once its been waived
through actions you can effectively waive your right and it can estoppel you from unwavering
them
QUESTION
is the insurance industry regulated at the state or federal level
Answer:
state-every state usually has an insurance department
QUESTION
what is contact adhesion
Answer:
insurer determines contract and terms it as take it or live it (ambiguities)

QUESTION
what is aleatory
Answer:
one party may receive a benefit entirely out of proportion to consideration given (chance events
“life”)
QUESTION
what does personal mean in regards to contract attributes
Answer:
insurance policies are personal(insurer and insurance), but life insurance can be transferred to a
3rd party, but insured can never be changed
QUESTION
what does unilateral mean in regards to contract attributes
Answer:
one party makes promise (insurer), promises to pay benefit in a loss
QUESTION
what does conditional mean in regards to contract attributes
Answer:
insurers promise to pay benefits is conditional on specified events
QUESTION
what are 5 considerations for contracts
Answer:
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Kentucky Life and Health Insurance Exam
(New 2024/ 2025 Update) Questions and
Verified Answers| 100 % Correct| Grade A
QUESTION
The only party in an insurance contract that makes a legally enforceable promise is the
insurance company. Because of this, insurance contracts are considered to be:
conditional
aleatory
unilateral
contracts of adhesion
Answer:
unilateral
Insurance contracts are unilateral. This means that only one party (the insurer) makes any kind of
enforceable promise.
QUESTION
Which of the following statements about accumulated interest earned on dividends from an
insurance policy is TRUE?
It is not taxable
It is tax deductible
It is taxed as capital gains
It is taxed as ordinary income
Answer:
It is taxed as ordinary income
QUESTION
In a qualified retirement plan, the yearly contributions to an employee’s account:

are not tax-deductible
are restricted to minimum levels set by the IRS
are restricted to maximum levels set by the IRS
must be matched dollar-for-dollar by the employer
Answer:
are restricted to maximum levels set by the IRS
QUESTION
When an individual is planning to protect his family with life insurance, one method of doing so
is called needs analysis. What exactly does needs analysis involve?
Establishes the needs of the individual and his dependents
Takes into account the present value of future income earned by the breadwinner
Places a dollar value on the life of the individual
Establishes the investment risk level acceptable to the individual
Answer:
Establishes the needs of the individual and his dependents
QUESTION
All of these insurance products require an agent to have proper FINRA securities registration in
order to sell them, EXCEPT for:
Variable Life
Modified Whole Life
Universal Variable life
Variable Annuity
Answer:
Modified Whole Life
QUESTION

The agreement in which hospitals and physician groups in a specific area contract with an
insurance company to provide medical care at predetermined costs is:
Preferred Provider Organization (PPO)
Health Maintenance Organization (HMO)
Designated Provider Organization (DPO)
Professional Service Organization (PSO)
Answer:
PPO
QUESTION
An insurable risk requires:
that the chance for both a loss or gain exists
the loss must be catastrophic
that the chance of loss be measurable
that the loss must be incalculable
Answer:
that the chance of loss be measurable
QUESTION
A signed good health statement would be collected by a life producer at the time of:
policy issue
application
policy delivery
physical examination
Answer:
policy delivery
QUESTION
Which of the following actions may the Commissioner take if an applicant provides misleading
information in the application for a license?

Refuse to issue the license.
Suspend the license if it has already been issued.
Impose a civil penalty.
All of the choices are correct.
Answer:
All of the choices are correct
QUESTION
Medicare bases its eligibility requirements on:
an individual’s assets
an individual’s age
an individual’s need
an individual’s employment status
Answer:
age
QUESTION
When does interest income in a deferred annuity get reported for federal income taxes?
Never
After the principal has been exhausted
When the distributions are received
During the accumulation phase
Answer:
When the distributions are received
QUESTION
Which of these statements is INCORRECT regarding the federal income tax treatment of life
insurance?
Premiums are normally not tax deductible
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Kentucky Life Insurance Exam (New 2024/
2025 Update) Questions and Verified
Answers| 100 % Correct| Grade A
QUESTION
The owner of a single premium deferred annuity is entitled to do all of these EXCEPT
Answer:
Make multiple premium payments
QUESTION
An insurance company’s voluntary refusal to enforce a contract’s provision is called a(n)
Answer:
Waiver
QUESTION
What happens when an initial offer is answered with a counteroffer?
Answer:
Initial offer is void
QUESTION
When determining the accumulation value of a deferred annuity, the total is calculated by taking
the premiums paid plus interest, and then subtracting the
Answer:
Withdrawals and expenses

QUESTION
What determines how much an annuitant is paid for a variable annuity?
Answer:
Fluctuates according to the market value of the underlying securities in a separate account
QUESTION
Which tax is normally associated with death?
Answer:
Federal estate tax
QUESTION
Which of these is true regarding the exchange of consideration among parties involved in an
insurance contract?
Answer:
Can be unequal
QUESTION
A policyowner fell behind on the premium payments of a whole life policy and it is now in the
grace period. How much will the beneficiary receive if the insured dies during this grace period
and the policy also contains an outstanding policy loan?
Answer:
Face amount minus the loan balance and past-due premium
QUESTION
An owner’s cost basis for a deferred annuity is typically the same as the
Answer:

Premiums paid into the annuity
QUESTION
Which life insurance settlement option pays lifetime benefits to two or more people?
Answer:
Joint and survivor
QUESTION
Which statement concerning a deferred annuity is correct?
Answer:
The owner can be the beneficiary, annuitant, or neither
QUESTION
Based on age criteria only, which of the co-annuitants listed below would receive the largest
monthly benefit payments in a joint and survivor annuity?
Answer:
Ages 71 and 73
QUESTION
Taking a sum of money and decreasing it in size would fit the description of
Answer:
Capital liquidation
QUESTION
Under which circumstance is the interest rate guaranteed within a market value adjusted
annuity?
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Kentucky Life Insurance Exam Prep|
Questions and Verified Answers| 100 %
Correct| Grade A (New 2024/ 2025 Update)
QUESTION
Nonforfeiture Options
Answer:
Three options available by law to policyowners that enable them to recover a policy’s cash-value
upon surrender of that policy. (1) Cash (2) Reduced Paid-Up Insurance (3) Extended Term
Insurance
QUESTION
Immediate Annuities
Answer:

Can only be funded using the Single Premium payment method
First income payment is made one payout interval from the date of annuity purchase
Typically designed to provide income immediately upon retirement
In exchange for a lump sum premium the company pays them a monthly income for the rest of
their life.
QUESTION
Deferred Annuities
Answer:
Can be funded through either the single premium payment or through periodic premium
payments
Begin payout at sometime in the future
QUESTION

Single Premium Annuity
Answer:
An Annuity purchased with one lump-sum payment, generally with after tax dollars, annuity is
paid in a set amount in period
QUESTION
Level Premium Annuity
Answer:
Annuitant agrees to make monthly payments in level amounts into the annuity during the
accumulation period.
QUESTION
Flexible Premium
Answer:
A policy feature that allows the policyholder to vary premium payments in the amount and/or
timing.
QUESTION
Premium Determination
Answer:
Annuitant’s age
Annuitant’s sex
Assumed interest rate
Income amount and payment guarantee
Loading for company expenses
QUESTION
Accumulation Units

Answer:
A variable annuity contract owner’s interest in the separate account prior to annuitization, bought
by the net purchase payment
QUESTION
Annuity Unit
Answer:
The number of annuity units denotes the share of the funds an annuitant will receive from a
variable annuity account after the accumulation period ends and benefits begin. A formula is
used to convert accumulation units to annuity units. Fixed number in amount, but payment
varies.
QUESTION
Life Annuity (no refund)
Answer:
Provides a life income to the annuitant only while the annuitant remains alive
QUESTION
Refund Life Annuity
Answer:
Life annuity payout option in which the annuitant receives income for life and the beneficiary
will receive the balance of premiums plus interest minus benefits already paid when the
annuitant dies. Two types: cash refund and installment refund.
QUESTION
Life Annuity with Period Certain
Answer:

A Life Annuity that guarantees to provide income payments for a minimum period of time or
life. Payments will continue to a beneficiary should the annuitant die during the specified period.
QUESTION
Joint Life and Survivorship Annuity
Answer:
An annuity under which payments
are made to two annuitants, with the
survivor continuing to receive payments
after the first annuitant dies.
QUESTION
Joint Life Annuity
Answer:
Payments continue to two annuitants for only as long as both live. On the death of either one,
payments stop.
QUESTION
Tax-Sheltered Annuities
Answer:
Limited exclusively for employees of religious, charity, or educational groups.

Also called 403(b) plans
Accumulation payments often come from voluntary salary reductions
The annuitant may have an individual account contract
QUESTION
Entire Contract
Answer:
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