Kentucky Life Insurance Exam Questions with 100% Correct Answers

Elements of a Contract Correct Answer Competent parties, legal purpose, offer and acceptance, consideration Waiver Correct Answer Voluntary giving up of a known right or privilege, can be express or implied Estoppel Correct Answer A person is prohibited by virtue of his own past actions from claiming a right that would work to the detriment of another who relied on the past conduct Aleatory Contract Correct Answer a contract where the values exchanged may not be equal but depend on an uncertain event Contracts of Adhesion Correct Answer One-sided in regards to preparation (prepared by the insurer) Contract of Utmost Good Faith Correct Answer Both parties bargain in good faith when forming and entering into the contract. The two parties rely upon the statements and promises of the other and assume no attempt to conceal or deceive has been made. Executory Contract Correct Answer A contract that has not yet been fully performed. Mortality Rate Correct Answer Determined by dividing the average number of people who will die each year at each age by the entire population of people that age (1980 CSO table) Functions of Life Insurance Correct Answer Create an immediate estate, requires no management or physical upkeep, paid in installments, can be used as collateral Final Expenses Correct Answer Medical and funeral expenses, outstanding debts Total Needs Approach Correct Answer Totaling the amount required to pay for current and future expenses Living Benefits of Life Insurance Correct Answer Loan value (can be used as collateral,) retirement benefits Human Life Value Correct Answer The monetary value of an individual's life Tax Advantages of Life Insurance Correct Answer Cash value earnings accumulate tax free, proceeds at death pass income tax free 4 Types of Life Insurance Correct Answer Permanent, Term, Industrial, Group