KENTUCKY LIFE INSURANCE EXAM

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KENTUCKY LIFE INSURANCE EXAM

Actual Qs and Ans - Expert-Verified Explanation -Guaranteed passing score -100 Questions and Answers

-Format: Multiple-choice / Flashcard

Question 1: Uniform Simultaneous Death Act

Answer:

It directs that in life insurance if the insured and the primary beneficiary die at the same time the policy benefits are payable as if the insured outlived the beneficiary.

Question 2: Excluded Disability

Answer:

Self-inflicted injury, injury received in military service in time of war, injury received while committing a crime

Question 3: Automatic Premium Loan Provision

Answer:

Authorizes insurer to automatically pay any premium in default at the end of the grace period and charge the amount so paid against the life insurance policy as a policy loan.

Question 4: 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 5: Risk Corridor

Answer:

The minimum separation between the cash value and death benefit.

Question 6: Class Designation

Answer:

A beneficiary designation. Rather than specifying one or more beneficiaries by name, the policy owner designates a class or group of beneficiaries. For example, "my children."

Question 7: Premium Determination

Answer:

Annuitant's age Annuitant's sex Assumed interest rate Income amount and payment guarantee Loading for company expenses

Question 8: Grace Period Provision

Answer:

Prevents policies from lapsing if a policyowner forgets or neglects to pay their premium it gives them a usual grace period of 30 days

Question 9: Tax Advantages of Life Insurance

Answer:

Cash value earnings accumulate tax free, proceeds at death pass income tax free

Question 10: Annuities

Answer:

A fixed sum of money paid to someone each year, typically for the rest of their life.

Question 11: Aleatory Contract

Answer:

a contract where the values exchanged may not be equal but depend on an uncertain event

Question 12: Disability Recovery

Answer:

Insured resumes paying premiums

Question 13: Cash Value of ULP $0

Answer:

Contract expires, policy goes into grace period,

Question 14: Privilege of Change Clause

Answer:

As a general rule, the insurance company will allow a change to a policy that calls for higher premium than the original, usually without medical examination. If lower premium, can require proof of insurability

Question 15: Waiting Period for Waiver of Premium

Answer:

If elapses and insured is still disabled by the judgment of a company authorized physician, disability is considered permanent, varies by company, if disability proves to be permanent then refunds paid are refunded.

Question 16: Human Life Value

Answer:

The monetary value of an individual's life

Question 17: Family Maintenance Policies

Answer:

Combination of level term and permanent policies, income provided starting from insured's death

Question 18: 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 19: 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 20: Waiver of Premium

Answer:

Exempts insured from paying premiums while he is disabled during life of contract, must be specifically requested and added, subjects the company to greater risk, additional premium is charged but cash value does not increase. Disability must be total and permanent., available until a specified age (60.)

Question 21: Elements of a Contract

Answer:

Competent parties, legal purpose, offer and acceptance, consideration

Question 22: Accumulation Units

Answer:

A variable annuity contract owner's interest in the separate account prior to annuitization, bought by the net purchase payment

Question 23: Minors as Beneficiaries

Answer:

Insurance company can hold the proceeds, paying interest on them until the beneficiary reaches legal age

Question 24: Flexible Premium

Answer:

A policy feature that allows the policyholder to vary premium payments in the amount and/or timing.

Question 25: Irrevocable Beneficiary

Answer:

beneficiary cannot be changed

• used by banks or in divorces
• if beneficiary wants the contract, he can get it

Question 26: 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.