17 Free Kansas Life & Health Practice Questions: Life Insurance Policy Types (2026)
How to Use This Policy Types Set
Life policy types are Section I of Pearson's Kansas outline: 15 of the 140 scored items on the combined Life and Accident & Health exam. The section covers whole life, universal, variable and indexed life, term life, annuities and combination plans.
Most questions in this set describe a client and ask which product fits, so the skill is matching a need to the policy built for it. These 17 questions come from LanePrep's Kansas Life & Health quiz bank and follow three areas: matching the product to the client, cash value and premium flexibility, and the special policies and options the exam likes to test.
Name the need before you read the options. Permanent or temporary, level or decreasing, guaranteed or market-linked: most questions turn on exactly one of those choices.
Practice Questions 1-6: Matching the Policy to the Client
A client who wants to finish paying before retirement, a couple covering a shrinking mortgage and a saver who wants growth without market losses each need a different product. This block also compares term with whole life and asks what a variable annuity puts at risk.
Question 1 (Chapter 2)
Mr. Henderson, age 50, wants to purchase a permanent life insurance policy but prefers to complete all premium payments within 15 years, before he retires. He still wants the policy to provide coverage for the remainder of his life. Which policy type should his agent recommend?
- A) Straight Life
- B) Level Term Life
- C) Universal Life
- D) Limited-Pay Whole Life
Show answer & explanation
Answer: D
Limited-Pay Whole Life is a permanent policy where premiums are paid for a specified period (e.g., 10, 15, or 20 years, or until age 65), after which no further premiums are due, but coverage continues for the insured's entire life. This matches Mr. Henderson's desire to pay off his policy before retirement. Straight Life (another term for Ordinary Whole Life) requires premiums to be paid for the entire life of the insured. Level Term Life is temporary coverage with no cash value. Universal Life offers flexible premiums and death benefits but doesn't typically guarantee a 'paid-up' status after a specific number of payments in the same way Limited-Pay does, without careful management.
Question 2 (Chapter 2)
A young couple just purchased their first home with a 30-year mortgage. They want to ensure that if either of them passes away, the outstanding mortgage balance will be paid off. They are looking for a policy where the death benefit decreases over time, mirroring the decreasing loan balance. Which policy type would best suit their needs?
- A) Level Term Life
- B) Whole Life
- C) Joint Life (First-to-Die)
- D) Decreasing Term Life
Show answer & explanation
Answer: D
Decreasing Term Life insurance is specifically designed for situations where the need for coverage diminishes over time, such as to cover a mortgage. The death benefit gradually decreases throughout the policy term, typically aligning with the amortization schedule of a loan. Level Term Life maintains a constant death benefit. Whole Life is permanent and builds cash value. Joint Life (First-to-Die) pays upon the first death but does not inherently feature a decreasing death benefit over time unless structured specifically to do so, and is typically permanent or level term.
Question 3 (Chapter 2)
John, age 40, is planning for retirement and wants to make regular contributions to a financial product that will accumulate funds on a tax-deferred basis, with guaranteed interest rates, and then provide a steady income stream when he retires at age 65. Which annuity type would be most suitable?
- A) Flexible Premium Deferred Fixed Annuity
- B) Single Premium Immediate Annuity (SPIA)
- C) Variable Immediate Annuity
- D) Indexed Single Premium Immediate Annuity
Show answer & explanation
Answer: A
A Flexible Premium Deferred Fixed Annuity allows for multiple premium payments (flexible premiums) over time, defers income until a future date (deferred), and offers guaranteed interest rates (fixed). This aligns with John's desire to make regular contributions, accumulate funds for retirement, and have guaranteed growth. SPIAs and Immediate Annuities begin payouts immediately. Variable annuities involve market risk, and Indexed annuities tie returns to an index, but a Fixed annuity guarantees the interest rate.
Question 4 (Chapter 2)
Which of the following statements accurately describes a key difference between term life insurance and whole life insurance?
- A) Term life has a level premium for life, while whole life premiums increase over time.
- B) Whole life provides coverage for a specific period, while term life provides lifelong coverage.
- C) Term life builds cash value that can be borrowed against, while whole life does not.
- D) Whole life offers a guaranteed cash value and lasts for the insured's entire life, while term life is temporary and has no cash value.
Show answer & explanation
Answer: D
Whole life insurance is a type of permanent insurance that provides coverage for the insured's entire life and builds guaranteed cash value. Term life insurance, conversely, is temporary coverage for a specific period and typically does not build cash value. Option A is incorrect; whole life generally has level premiums for life, while term premiums may increase upon renewal. Option B is the opposite of the truth. Option C is incorrect; whole life builds cash value, term life does not.
Question 5 (Chapter 2)
Samantha is looking for a life insurance policy where the cash value growth is tied to the performance of a recognized stock market index, such as the S&P 500. However, she also wants a guarantee that her cash value will not decline due to market downturns, and typically includes a cap on potential gains. What type of policy is Samantha interested in?
- A) Variable Whole Life
- B) Universal Life
- C) Interest-Sensitive Whole Life
- D) Indexed Life
Show answer & explanation
Answer: D
Indexed Life insurance policies offer cash value growth linked to a specific market index. They typically include a 'floor' or guaranteed minimum interest rate to protect against market losses and often a 'cap' or 'participation rate' that limits the maximum gains. Variable Whole Life (A) involves direct investment in sub-accounts with market risk. Universal Life (B) credits interest based on the insurer's general account performance, often with a guaranteed minimum. Interest-Sensitive Whole Life (C) also credits interest based on current market rates but is not directly tied to an external index in the same way as Indexed Life.
Question 6 (Chapter 2)
A financial advisor is explaining the potential risks of a Variable Annuity to a client. What is the main risk the advisor would highlight regarding the cash value growth and future income payments of this product?
- A) The risk of investment loss due to poor performance of the underlying sub-accounts.
- B) The risk of the insurer defaulting on guaranteed payments.
- C) The risk that the interest rate credited to the annuity will be too low due to market conditions.
- D) The risk that the annuity will mature before the client's planned retirement date.
Show answer & explanation
Answer: A
The primary risk associated with a Variable Annuity is investment risk. The cash value and the amount of future income payments fluctuate based on the performance of the underlying investment sub-accounts chosen by the annuitant. If these investments perform poorly, the cash value can decrease, and future income payments may be lower. Option B is largely mitigated by state guaranty associations. Option C is more characteristic of a Fixed Annuity with a low guaranteed rate. Option D is incorrect as annuities are generally designed to provide income for life or a specified period, not to 'mature' in the same way a life insurance policy does.
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Practice Questions 7-12: Cash Value, Premium Flexibility and Variable Products
Only permanent policies build cash value to borrow against, universal life lets the owner choose premiums at a price, and variable products bring investment risk and licensing requirements into play. This block also covers annuity surrender charges and the re-entry option on renewable term.
Question 7 (Chapter 2)
Mr. Thompson purchased a life insurance policy several years ago and now needs to access some of its accumulated value to help pay for his child's college tuition. He wants to do this without terminating his policy. Which type of life insurance policy would typically allow him to access funds through a loan against its value?
- A) A 10-year Level Term policy
- B) An Annually Renewable Term policy
- C) A Decreasing Term policy
- D) An Ordinary Whole Life policy
Show answer & explanation
Answer: D
Only permanent life insurance policies, such as Ordinary Whole Life, accumulate cash value that can be accessed by the policyholder through policy loans. Term life insurance policies (A, B, C) are 'pure protection' and do not build cash value, therefore, they do not offer policy loans.
Question 8 (Chapter 2)
Sarah is considering a Universal Life insurance policy. Her agent explains that she has flexibility in her premium payments. What is the difference between the 'minimum premium' and the 'target premium' in a Universal Life policy?
- A) The minimum premium is the lowest amount required to keep the policy in force for a short period, while the target premium is a recommended amount to keep the policy in force until maturity or age 100.
- B) The minimum premium guarantees the death benefit for one year, while the target premium guarantees it for the life of the policy.
- C) The minimum premium is the initial payment, and the target premium is the maximum amount allowed by the IRS.
- D) The minimum premium funds the cash value, while the target premium covers the cost of insurance.
Show answer & explanation
Answer: A
In Universal Life, the minimum premium is the lowest amount that must be paid to keep the policy in force for a short period, often just covering the monthly deductions for the cost of insurance and expenses. The target premium is a higher, recommended premium amount designed to keep the policy in force and accumulate cash value over the long term, typically until maturity or age 100, assuming projected interest rates and charges. Option B, C, and D are incorrect descriptions.
Question 9 (Chapter 2)
Mrs. Green has an Annually Renewable Term (ART) life insurance policy. Her agent explains that while her policy is renewable, she might qualify for lower premiums in the future if she proves her insurability again. What specific feature allows her to potentially obtain lower renewal premiums by demonstrating continued good health?
- A) Convertibility option
- B) Re-entry option
- C) Waiver of premium rider
- D) Guaranteed insurability rider
Show answer & explanation
Answer: B
The re-entry option in a renewable term policy allows the insured to demonstrate evidence of insurability at the time of renewal. If they qualify, they can 're-enter' the policy at a lower premium rate than the standard renewal rate for their attained age, which is typically higher without re-entry. Convertibility allows changing to a permanent policy. Waiver of premium is a rider for disability. Guaranteed insurability allows purchasing additional coverage without proof of insurability.
Question 10 (Chapter 2)
Ms. Chen purchased a deferred annuity. Her agent informs her about potential surrender charges. When are surrender charges typically applied to an annuity?
- A) Only during the annuity period when payments are being received.
- B) When the annuitant dies and the death benefit is paid out.
- C) If the policyholder withdraws funds or surrenders the annuity during the accumulation period.
- D) Annually, as a fee for managing the annuity's investments.
Show answer & explanation
Answer: C
Surrender charges are fees imposed by the insurance company if the policyholder withdraws funds from an annuity or surrenders the contract entirely during the accumulation period, typically within the first few years after purchase. These charges compensate the insurer for expenses incurred in issuing the policy and for potential losses on investments. They are not applied during the annuity period, upon death, or as annual investment management fees (though other fees may apply).
Question 11 (Chapter 2)
An agent is helping a client, Sarah, who wants a policy that combines the flexible premium features of Universal Life with the investment choice of Variable Life. Sarah is willing to accept market risk for higher potential returns. Which licensing must the agent hold to sell this specific product in Kansas?
- A) A Life Insurance license only.
- B) A Life Insurance license and a Health Insurance license.
- C) A Life Insurance license and a FINRA securities registration (such as Series 6 or 7).
- D) A Kansas Variable Contracts license only, with no Life license required.
Show answer & explanation
Answer: C
Variable Universal Life (VUL) is considered a security because the cash value is held in a separate account and invested in the stock market. Therefore, the producer must be licensed for Life insurance and registered with FINRA (Financial Industry Regulatory Authority).
Question 12 (Chapter 2)
In a Variable Whole Life policy, which of the following is guaranteed?
- A) The cash value growth rate.
- B) A minimum death benefit.
- C) The performance of the separate account sub-accounts.
- D) That the policy will never require a prospectus.
Show answer & explanation
Answer: B
Variable Whole Life policies guarantee a minimum death benefit (the face amount), but the cash value is not guaranteed as it fluctuates with the performance of the separate account.
Practice Questions 13-17: Juvenile Policies, Conversion, Payouts and Premium Choices
How a jumping juvenile policy changes at the stated age, how an attained-age conversion is priced and which annuity payout option pays the most. The block closes with the risk of paying only the minimum on a universal life policy and the use of single-premium whole life.
Question 13 (Chapter 2)
Mr. Miller buys a 'Jumping Juvenile' policy for his newborn daughter. What is the defining characteristic of this policy when the child reaches age 21?
- A) The premium increases five-fold.
- B) The face amount increases significantly, usually five times, without a premium increase.
- C) The policy automatically converts to a Term policy.
- D) The child must prove insurability to keep the policy active.
Show answer & explanation
Answer: B
A Jumping Juvenile policy is a form of permanent life insurance where the face amount 'jumps' (usually to 5 times the original amount) when the child reaches a certain age (usually 21), while the premium remains level.
Question 14 (Chapter 2)
Which annuity payout option provides the highest monthly income for an individual, but carries the highest risk of total loss of principal upon the annuitant's death?
- A) Life with 10-Year Period Certain.
- B) Joint and Survivor Life.
- C) Life Only (Straight Life).
- D) Unit Refund Life.
Show answer & explanation
Answer: C
Life Only (Straight Life) provides the highest monthly payment because it is based solely on the annuitant's life expectancy with no guarantees for beneficiaries. Payments stop immediately upon death.
Question 15 (Chapter 2)
When converting a Term policy to a Whole Life policy at 'Attained Age,' how is the new premium determined?
- A) Based on the insured's age at the time the original term policy was issued.
- B) Based on the insured's age at the time of the conversion.
- C) It is always a flat $100 per month regardless of age.
- D) The premium is the same as the term policy premium.
Show answer & explanation
Answer: B
Attained Age conversion bases the new permanent policy's premium on the insured's current age at the time of conversion, which results in a higher premium than an 'Original Age' conversion.
Question 16 (Chapter 2)
Sarah has a Universal Life (UL) policy. She understands that the policy has flexible premiums, but is concerned about maintaining her coverage. Her agent explains that if she consistently pays only the 'minimum premium,' rather than the 'target premium,' what is the most likely long-term consequence for her policy?
- A) The policy's cash value will grow much faster than anticipated.
- B) The death benefit will automatically increase to compensate for lower payments.
- C) The policy's cash value may be depleted, potentially leading to policy lapse.
- D) The cost of insurance charges will be waived indefinitely.
Show answer & explanation
Answer: C
In a Universal Life policy, the 'minimum premium' is often insufficient to cover the cost of insurance and administrative expenses over the long term, especially in later years. Consistently paying only the minimum can deplete the cash value, as charges are deducted from it, eventually leading to the policy lapsing if the cash value cannot cover the costs. The target premium is designed to keep the policy in force until maturity. Options A, B, and D are incorrect; lower payments would not accelerate cash value growth, increase the death benefit, or waive charges.
Question 17 (Chapter 2)
Mr. Johnson, age 60, recently received a large inheritance and wants to purchase a life insurance policy that is fully paid for with a single payment. He desires immediate, substantial cash value accumulation and a guaranteed death benefit for the rest of his life, without any future premium obligations. Which type of policy is best suited for his needs?
- A) Limited-Pay Whole Life
- B) Annually Renewable Term
- C) Single-Premium Whole Life
- D) Universal Life
Show answer & explanation
Answer: C
Single-Premium Whole Life (SPWL) is designed to be fully paid with one large upfront premium. This allows for immediate and significant cash value accumulation and provides permanent, guaranteed death benefit coverage for the insured's entire life without any further premium payments. Limited-Pay Whole Life (A) requires payments over a set period (e.g., 10 or 20 years), not a single payment. Annually Renewable Term (B) is temporary coverage with no cash value. Universal Life (D) offers flexible premiums but typically involves ongoing payments, not a single lump sum for full payment.
The Mistakes That Cost Marks
Mixing up the ways to pay for permanent coverage. Limited-pay whole life stays permanent and is paid up after a set period; single-premium whole life is paid with one deposit; universal life has flexible premiums and does not promise a paid-up date by itself. The wording of the client's goal usually names the one you want.
Treating the minimum premium as enough. A universal life policy kept alive on the minimum premium can see its cash value drained by charges and eventually lapse. The target premium is the one built to carry the policy to maturity.
Expecting a loan from term insurance. Policy loans come from cash value, and term policies have none. If a scenario needs money from the policy without ending it, the answer is permanent coverage.
Blurring indexed and variable. Indexed life links growth to an index with a floor and usually a cap. The owner of a variable policy carries the investment risk, and the guarantee is limited to a minimum death benefit. Kansas treats variable life and variable annuities as their own line of authority and asks for proof of FINRA registration (Series 6 or 7), so a Life line alone is not enough to sell them.
Choosing life only because it pays the most. Life only gives the highest annuity payment and nothing to anyone after the annuitant dies. Check the scenario for a spouse or beneficiary before you pick it.
Your Next Step
The course is audio you can play on the road, and Chapter 1 is free, no signup. The rest of the free questions are on the Kansas Life & Health practice questions hub. The next blocks of the life exam have their own sets: provisions, riders, options and exclusions and underwriting, policy delivery and retirement concepts. To see where these 15 items fit, read how many questions the exam has and how hard the exam is.
Section weights come from Pearson's Kansas content outline (publication 121703, effective March 1, 2025). Read October 2026.
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