2025 KENTUCKY LIFE INSURANCE RELIABLE EXAM
QUESTION WITH ANSWERS 2025/2026
Ten-Day Free Look - Examination period, commonly 10 days (30 days concerning
policy replacement,) beginning the day the policyowner receives the policy. If returned
during this period, the PO receives full refund of all premiums paid. If insured dies,
beneficiary receives policy proceeds.
Policyowner's Rights - incidence of ownership
1. name the beneficiary
2. select a settlement option
3. assign the policy
4. utilize cash value to obtain a loan or cash
5. entitled to cash surrender value
6. establish premium schedule
7. decide how to use dividends paid by the company
8. With convertible term, can convert the policy from term to permanent
Note: paying premium or being insured are not incidents of ownership
Primary Beneficiary - The person who is named as first to receive benefits from a policy.
Contingent Beneficiary - An alternate beneficiary designated to receive the policy
proceeds in the event that the primary beneficiary dies before the insured.
Revocable Beneficiary - the policyholder reserves the right to change the beneficiary
designation without the beneficiary's consent
Irrevocable Beneficiary - beneficiary cannot be changed
- used by banks or in divorces
- if beneficiary wants the contract, he can get it
Minors as Beneficiaries - Insurance company can hold the proceeds, paying interest on
them until the beneficiary reaches legal age
Class Designation - 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."
Per Capita Designation - Equal shares all around
Per-capita beneficiary designations also provide that your primary beneficiary's share
will go to his/her heirs; should your primary beneficiary predecease you, his/her share
would be divided equally among your successor heirs.
, Per Stirpes Designation - Percentage originally bequeathed passed on to sub-heirs and
split between them
In the event your primary beneficiary predeceases you, a per-stirpes beneficiary
designation provides that the share he/she would have received goes to his/her heirs
Common Disaster Provision - Sometimes added to a policy and designed to provide an
alternative beneficiary in the event that the insured as well as the original beneficiary
dies as the result of a common accident.
Uniform Simultaneous Death Act - 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.
Spendthrift Beneficiary - -Proceeds paid other than in a lump sum
-Protected from creditors while held by insurance company
- No transfer of proceeds
- No continuation of proceeds
- No encumbering the proceeds (borrowing on strength of the policy)
Contestable Clause - Once a policy has in force for a specified period, even if fraud is
discovered, no voiding of policy
Misstatement of Age Clause - Provides that if misstatement of age is discovered after
policy issue, the company can, if the insured is currently alive, adjust the premium
amount on future premiums and request
payment of the additional premium the policyholder should have paid; or if the insured
has died, adjust the face amount of the policy to fit the premium that was paid at the
correct age before paying the claim // not material enough to void policy
Suicide Clause - if the insured commits suicide within two years after the policy is
issued, the face amount of insurance will not be paid; there is only a refund of the
premiums paid if after the time limit. Applies whether insured is sane or insane
Grace Period Provision - Prevents policies from lapsing if a policyowner forgets or
neglects to pay their premium it gives them a usual grace period of 30 days
Reinstatement Clause - Three conditions: policy owner must pay back all premiums
plus interest, must show proof of insurability, less than 3 years must have elapsed
Privilege of Change Clause - 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
Automatic Premium Loan Provision - 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 WITH ANSWERS 2025/2026
Ten-Day Free Look - Examination period, commonly 10 days (30 days concerning
policy replacement,) beginning the day the policyowner receives the policy. If returned
during this period, the PO receives full refund of all premiums paid. If insured dies,
beneficiary receives policy proceeds.
Policyowner's Rights - incidence of ownership
1. name the beneficiary
2. select a settlement option
3. assign the policy
4. utilize cash value to obtain a loan or cash
5. entitled to cash surrender value
6. establish premium schedule
7. decide how to use dividends paid by the company
8. With convertible term, can convert the policy from term to permanent
Note: paying premium or being insured are not incidents of ownership
Primary Beneficiary - The person who is named as first to receive benefits from a policy.
Contingent Beneficiary - An alternate beneficiary designated to receive the policy
proceeds in the event that the primary beneficiary dies before the insured.
Revocable Beneficiary - the policyholder reserves the right to change the beneficiary
designation without the beneficiary's consent
Irrevocable Beneficiary - beneficiary cannot be changed
- used by banks or in divorces
- if beneficiary wants the contract, he can get it
Minors as Beneficiaries - Insurance company can hold the proceeds, paying interest on
them until the beneficiary reaches legal age
Class Designation - 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."
Per Capita Designation - Equal shares all around
Per-capita beneficiary designations also provide that your primary beneficiary's share
will go to his/her heirs; should your primary beneficiary predecease you, his/her share
would be divided equally among your successor heirs.
, Per Stirpes Designation - Percentage originally bequeathed passed on to sub-heirs and
split between them
In the event your primary beneficiary predeceases you, a per-stirpes beneficiary
designation provides that the share he/she would have received goes to his/her heirs
Common Disaster Provision - Sometimes added to a policy and designed to provide an
alternative beneficiary in the event that the insured as well as the original beneficiary
dies as the result of a common accident.
Uniform Simultaneous Death Act - 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.
Spendthrift Beneficiary - -Proceeds paid other than in a lump sum
-Protected from creditors while held by insurance company
- No transfer of proceeds
- No continuation of proceeds
- No encumbering the proceeds (borrowing on strength of the policy)
Contestable Clause - Once a policy has in force for a specified period, even if fraud is
discovered, no voiding of policy
Misstatement of Age Clause - Provides that if misstatement of age is discovered after
policy issue, the company can, if the insured is currently alive, adjust the premium
amount on future premiums and request
payment of the additional premium the policyholder should have paid; or if the insured
has died, adjust the face amount of the policy to fit the premium that was paid at the
correct age before paying the claim // not material enough to void policy
Suicide Clause - if the insured commits suicide within two years after the policy is
issued, the face amount of insurance will not be paid; there is only a refund of the
premiums paid if after the time limit. Applies whether insured is sane or insane
Grace Period Provision - Prevents policies from lapsing if a policyowner forgets or
neglects to pay their premium it gives them a usual grace period of 30 days
Reinstatement Clause - Three conditions: policy owner must pay back all premiums
plus interest, must show proof of insurability, less than 3 years must have elapsed
Privilege of Change Clause - 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
Automatic Premium Loan Provision - 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.
