Kentucky Life Insurance Exam Study Guide with complete solutions | Latest 2025/2026 Update.

Kentucky Life Insurance Exam Study i,- i,- i,- i,- i,-




Guide with complete solutions | Latest i,- i,- i,- i,- i,- i,-




2025/2026 Update. i,-




Aleatory Contract a contract where the values exchanged
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may not be equal but depend on an uncertain event
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Contracts of Adhesion i,- i,- i,-i,- i,- One-sided in regards to preparation i,- i,- i,- i,- i,-



(prepared by the insurer) i,- i,- i,-




Contract of Utmost Good Faith
i,- Both parties bargain in good
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faith when forming and entering into the contract. The two
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parties rely upon the statements and promises of the other and
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assume no attempt to conceal or deceive has been made.
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Executory Contract i,- i,-i,- i,- A contract that has not yet been fully
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performed.


Mortality Rate Determined by dividing the average number
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of people who will die each year at each age by the entire
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population of people that age (1980 CSO table) i,- i,- i,- i,- i,- i,- i,-

,Functions of Life Insurance Create an immediate estate,
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requires no management or physical upkeep, paid in installments,
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can be used as collateral
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Final Expenses i,- i,-i,- i,- Medical and funeral expenses, outstanding
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debts


Elements of a Contract Competent parties, legal purpose,
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offer and acceptance, consideration
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Waiver Voluntary giving up of a known right or privilege, can
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be express or implied
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Estoppel A person is prohibited by virtue of his own past
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actions from claiming a right that would work to the detriment of
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another who relied on the past conduct
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Total Needs Approach
i,- Totaling the amount required to pay
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for current and future expenses
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Living Benefits of Life Insurance
i,- i,- i,- i,- i,-i,- i,- Loan value (can be used as
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collateral,) retirement benefits i,- i,-

,Human Life Value i,- i,- i,-i,- i,- The monetary value of an individual's life
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Tax Advantages of Life Insurance
i,- Cash value earnings i,- i,- i,- i,-i,- i,- i,- i,- i,-



accumulate tax free, proceeds at death pass income tax free i,- i,- i,- i,- i,- i,- i,- i,- i,-




4 Types of Life Insurance
i,- i,- i,- i,- i,-i,- i,- Permanent, Term, Industrial, Group i,- i,- i,-




Permanent Life Insurance Accumulates cash value, insurance
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protection decreases as cash value increases i,- i,- i,- i,- i,-




Term Life Insurance i,- i,- i,-i,- i,- Accumulates no cash value, only provides i,- i,- i,- i,- i,- i,-



death benefits i,-




Whole Life Insurance A permanent policy for which you pay a
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specified premium each year for the rest of your life, cash value
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accumulates, endows at age 100 i,- i,- i,- i,-




Limited-Pay Life Policies Premiums are paid to a specified agei,- i,- i,-i,- i,- i,- i,- i,- i,- i,- i,- i,-



or for a specified number of years and then stop. Protection
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remains for the rest of the insured's life.
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Endowment Policies As of 1984, no policy can endow before i,- i,-i,- i,- i,- i,- i,- i,- i,- i,- i,- i,-



age 95 because the CV and DB would be taxed
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, Single Premium Whole Life
i,- Policy is completely paid up after i,- i,- i,-i,- i,- i,- i,- i,- i,- i,- i,-



one premium, policyholder pays less than if premiums stretched
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out over several years
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Modified Endowment Contract (MEC) TAMRA: All single
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premium policies, any policy that does not satisfy the 7-pay test
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// money taken from the policy is taxed as ordinary income // if
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policy owner is younger than 59 1/2 and not disabled 10%
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penalty is assigned i,- i,-




Joint Life Policies
i,- First-to-die, contract comes to an end at
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the first death, no further insurance protection for the other
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person or persons covered by the policy
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Survivorship Policies Second-to-die, covers 2 lives and i,- i,-i,- i,- i,- i,- i,- i,- i,-



guarantees payment only when second insured dies i,- i,- i,- i,- i,- i,-




Adjustable Life Policies Policyholder can adjust face amount
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of policy, amount/frequency of premium payments, period of
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insurance protection i,-




Universal Life Insurance Flexible premium, adjustable death
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benefits, accumulates cash values: earlier models have front-end
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