KENTUCKY LIFE INSURANCE EXAM
PRACTICE QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
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1. What is the primary purpose of life insurance?
A. Investment growth
B. Protection against financial loss due to death
C. Tax evasion
D. Estate planning
Life insurance is primarily intended to provide financial protection to
beneficiaries in the event of the insured's death.
2. Which type of life insurance provides coverage for a specified term
only?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Term life insurance provides coverage for a specified period and does
not accumulate cash value.
,3. In a life insurance policy, who is the party that owns the policy?
A. Insured
B. Beneficiary
C. Policyowner
D. Insurance company
The policyowner holds the rights to the policy, including naming
beneficiaries and making changes.
4. Which type of beneficiary designation cannot be changed without
the consent of the beneficiary?
A. Revocable
B. Contingent
C. Irrevocable
D. Primary
An irrevocable beneficiary has legal rights to the policy proceeds and
cannot be changed without consent.
5. What is the grace period in a life insurance policy?
A. Time to cancel the policy
B. Time after premium due date to pay without penalty
C. Policy underwriting period
D. Contestability period
The grace period allows the policyowner extra time to pay a premium
before the policy lapses.
6. Which clause protects the insurer against misstatements on the
application?
,A. Free-look clause
B. Waiver clause
C. Incontestability clause
D. Consideration clause
The incontestability clause prevents the insurer from voiding a policy
after it has been in force for a set period (usually 2 years), except in
cases of fraud.
7. A life insurance policy owner pays $100 per month into a policy that
builds cash value. What type of policy is this likely?
A. Term life
B. Whole life
C. Group life
D. Credit life
Whole life policies have fixed premiums and build cash value over time.
8. The premium for a group life insurance policy is usually based on:
A. Individual health
B. Average age and risk of the group
C. Occupation only
D. Gender
Group life insurance premiums are determined by the overall risk
characteristics of the insured group.
9. Which of the following is NOT a standard life insurance policy
provision?
A. Assignment
, B. Grace period
C. Free-look period
D. Cash surrender loan
Cash surrender loans are a feature of cash value policies, not a standard
provision in all life insurance policies.
10. Which type of policy allows the policyholder to adjust both
premiums and coverage amounts?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Universal life insurance provides flexibility in premium payments and
death benefits.
11. What is the purpose of the “insuring clause” in a life insurance
policy?
A. Specify the premium amount
B. State the insurer’s promise to pay the death benefit
C. List policy exclusions
D. Explain dividend options
The insuring clause clearly states the insurer’s obligation to pay the
death benefit upon the insured’s death.
12. Which of the following would most likely require proof of
insurability?
A. Employer-sponsored group life
PRACTICE QUESTIONS AND CORRECT
ANSWERS (VERIFIED ANSWERS) PLUS
RATIONALES 2026 Q&A | INSTANT
DOWNLOAD PDF
1. What is the primary purpose of life insurance?
A. Investment growth
B. Protection against financial loss due to death
C. Tax evasion
D. Estate planning
Life insurance is primarily intended to provide financial protection to
beneficiaries in the event of the insured's death.
2. Which type of life insurance provides coverage for a specified term
only?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Term life insurance provides coverage for a specified period and does
not accumulate cash value.
,3. In a life insurance policy, who is the party that owns the policy?
A. Insured
B. Beneficiary
C. Policyowner
D. Insurance company
The policyowner holds the rights to the policy, including naming
beneficiaries and making changes.
4. Which type of beneficiary designation cannot be changed without
the consent of the beneficiary?
A. Revocable
B. Contingent
C. Irrevocable
D. Primary
An irrevocable beneficiary has legal rights to the policy proceeds and
cannot be changed without consent.
5. What is the grace period in a life insurance policy?
A. Time to cancel the policy
B. Time after premium due date to pay without penalty
C. Policy underwriting period
D. Contestability period
The grace period allows the policyowner extra time to pay a premium
before the policy lapses.
6. Which clause protects the insurer against misstatements on the
application?
,A. Free-look clause
B. Waiver clause
C. Incontestability clause
D. Consideration clause
The incontestability clause prevents the insurer from voiding a policy
after it has been in force for a set period (usually 2 years), except in
cases of fraud.
7. A life insurance policy owner pays $100 per month into a policy that
builds cash value. What type of policy is this likely?
A. Term life
B. Whole life
C. Group life
D. Credit life
Whole life policies have fixed premiums and build cash value over time.
8. The premium for a group life insurance policy is usually based on:
A. Individual health
B. Average age and risk of the group
C. Occupation only
D. Gender
Group life insurance premiums are determined by the overall risk
characteristics of the insured group.
9. Which of the following is NOT a standard life insurance policy
provision?
A. Assignment
, B. Grace period
C. Free-look period
D. Cash surrender loan
Cash surrender loans are a feature of cash value policies, not a standard
provision in all life insurance policies.
10. Which type of policy allows the policyholder to adjust both
premiums and coverage amounts?
A. Whole life
B. Term life
C. Universal life
D. Variable life
Universal life insurance provides flexibility in premium payments and
death benefits.
11. What is the purpose of the “insuring clause” in a life insurance
policy?
A. Specify the premium amount
B. State the insurer’s promise to pay the death benefit
C. List policy exclusions
D. Explain dividend options
The insuring clause clearly states the insurer’s obligation to pay the
death benefit upon the insured’s death.
12. Which of the following would most likely require proof of
insurability?
A. Employer-sponsored group life
