17 Free Kansas Life & Health Practice Questions: Life Insurance Provisions, Riders, Options and Exclusions (2026)
How to Use This Provisions and Riders Set
Provisions, riders, options and exclusions are Section II of Pearson's Kansas outline: 15 of the 140 scored items. This is the part of the life exam that reads the policy itself: the clauses that bind both sides, the riders you can add, what happens to cash value when a policy lapses, how proceeds can be paid and what the insurer will not cover.
Most questions in this set are one-step: a short scenario and one rule to apply. The trap is similar names, such as reduced paid-up against extended term, or a war exclusion that depends on cause against one that depends on status. These 17 questions come from LanePrep's Kansas Life & Health quiz bank and follow three areas: riders and core clauses, exclusions and how benefits are taxed and paid, and the lapse and ownership rules.
Ask what the rule changes, not what it is called. A rider adds something, an option chooses what happens next, an exclusion removes something and a provision fixes the terms.
Practice Questions 1-6: Riders, Core Clauses and Cash Value Options
Riders that add coverage without proof of insurability or return premium, the protection of the grace period, and what the lapse options do with cash value. The block also tests how interest on dividends is taxed.
Question 1 (Chapter 3)
Michael, 28, buys a new life insurance policy. He anticipates needing more coverage in the future as his family grows, but he is concerned about potential health issues making him uninsurable later. Which rider would allow him to purchase additional insurance at specified intervals without proving insurability?
- A) Payor Benefit Rider
- B) Term Rider
- C) Return of Premium Rider
- D) Guaranteed Insurability Rider
Show answer & explanation
Answer: D
The Guaranteed Insurability Rider allows the policyowner to purchase additional amounts of insurance at specified future dates or events (like marriage or birth of a child) without having to prove insurability. The Payor Benefit Rider is for juvenile policies, waiving premiums if the payor dies or becomes disabled. A Term Rider adds temporary coverage. A Return of Premium Rider returns premiums if the insured outlives the policy term.
Question 2 (Chapter 3)
Sarah, a 35-year-old professional, purchases a whole life insurance policy. She is concerned about maintaining her coverage if she were to become disabled and unable to work. Which rider should her agent recommend to address this specific concern?
- A) Guaranteed Insurability Rider
- B) Accidental Death and Dismemberment Rider
- C) Cost of Living Rider
- D) Waiver of Premium Rider
Show answer & explanation
Answer: D
The Waiver of Premium Rider is designed to waive future premium payments if the insured becomes totally disabled, ensuring the policy remains in force without the policyowner having to pay premiums during the disability. The Guaranteed Insurability Rider allows for future purchases of additional insurance without proof of insurability. The Accidental Death and Dismemberment Rider pays an additional benefit for accidental death or dismemberment. The Cost of Living Rider increases the death benefit to keep pace with inflation.
Question 3 (Chapter 3)
After missing his life insurance premium due date, Mark receives a notice from his insurer stating he has a limited period during which he can still pay the premium without losing coverage. What is this period called?
- A) The Contestable Period
- B) The Free Look Period
- C) The Reinstatement Period
- D) The Grace Period
Show answer & explanation
Answer: D
The Grace Period is a mandatory provision in life insurance policies that allows the policyowner an additional period (typically 30 or 31 days) after the premium due date to pay the premium without the policy lapsing. If the insured dies during the grace period, the death benefit is paid, minus any overdue premium. The Contestable Period is for challenging misrepresentations. The Free Look Period is for reviewing and returning a new policy. The Reinstatement Period is for restoring a lapsed policy after the grace period.
Question 4 (Chapter 3)
Upon the lapse of her whole life policy, Sarah chooses to use her accumulated cash value to purchase a new, fully paid-up permanent life insurance policy with a reduced face amount. Which non-forfeiture option did she select?
- A) Reduced Paid-Up Insurance
- B) Cash Surrender
- C) Extended Term Insurance
- D) Automatic Premium Loan
Show answer & explanation
Answer: A
The Reduced Paid-Up Insurance non-forfeiture option uses the policy's cash value as a single premium to purchase a new, fully paid-up whole life policy with a smaller face amount. This policy will remain in force for the remainder of the insured's life. Cash Surrender terminates the policy. Extended Term provides the original face amount for a limited time. Automatic Premium Loan is a provision to prevent lapse, not a non-forfeiture option chosen after lapse.
Question 5 (Chapter 3)
Thomas purchases a 20-year term life policy. He wants to ensure that if he is still alive at the end of the 20-year term, he receives all of the premiums he paid into the policy back. Which rider would accomplish this?
- A) Waiver of Premium
- B) Cash Surrender Option
- C) Reduced Paid-Up Option
- D) Return of Premium (ROP) Rider
Show answer & explanation
Answer: D
The Return of Premium (ROP) rider provides for the refund of all or a portion of the premiums paid if the insured outlives the term of the policy. Option B and C are non-forfeiture options for permanent insurance, not term riders.
Question 6 (Chapter 3)
If a policyowner elects to leave dividends with the insurance company to earn interest, which of the following statements is TRUE regarding the tax treatment of those dividends?
- A) The dividends themselves are taxable as ordinary income.
- B) The dividends are considered a return of premium and are never taxable.
- C) The interest earned on the dividends is taxable as ordinary income in the year it is credited.
- D) Both the dividends and the interest are tax-free.
Show answer & explanation
Answer: C
While life insurance dividends are generally considered a non-taxable return of premium, any interest earned on dividends left with the company (Accumulation at Interest) is taxable as ordinary income in the year it is earned.
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Practice Questions 7-12: Exclusions, Taxes and Contract Provisions
Aviation and suicide exclusions, how a surrender is taxed, the fixed period settlement option, and what the misstatement and entire contract provisions do to a claim.
Question 7 (Chapter 3)
An insured pilot dies while flying his own private plane for recreation. The insurance company denies the claim based on a specific policy provision. Which exclusion likely applied?
- A) War Exclusion
- B) Hazardous Occupation Exclusion
- C) Aviation Exclusion
- D) Suicide Clause
Show answer & explanation
Answer: C
The Aviation Exclusion typically excludes coverage for death resulting from non-commercial flight (such as private piloting) unless a higher premium was paid or the exclusion was specifically removed. Commercial airline travel is almost always covered.
Question 8 (Chapter 3)
A policyowner decides to surrender his whole life policy for its $50,000 cash value. His total premiums paid over the years were $40,000. What are the tax consequences of this transaction?
- A) The entire $50,000 is taxable as ordinary income.
- B) The entire $50,000 is tax-free.
- C) $10,000 is taxable as ordinary income.
- D) $40,000 is taxable as a capital gain.
Show answer & explanation
Answer: C
When a policy is surrendered, the portion of the cash value that exceeds the 'cost basis' (total premiums paid) is taxable as ordinary income. $50,000 - $40,000 = $10,000 taxable.
Question 9 (Chapter 3)
A beneficiary is awarded a $500,000 death benefit but does not want a lump sum. She chooses a settlement option where the insurer pays out the principal and interest over exactly 15 years. Which settlement option has she selected?
- A) Fixed Period
- B) Fixed Amount
- C) Life Income with Period Certain
- D) Interest Only
Show answer & explanation
Answer: A
The Fixed Period (or Fixed Time) option guarantees payments for a specified length of time (e.g., 15 years), regardless of the amount of each payment. Fixed Amount (B) focuses on a specific dollar amount per check until the money runs out. Life Income (C) is based on the beneficiary's life expectancy.
Question 10 (Chapter 3)
An insurer discovers after the death of an insured that the insured's gender was listed incorrectly on the application. According to the Misstatement of Age or Gender provision, what will the insurer do?
- A) Deny the claim due to material misrepresentation.
- B) Pay the full death benefit but charge the estate for the premium difference.
- C) Adjust the death benefit to what the premiums paid would have purchased for the correct gender.
- D) Refund all premiums and cancel the policy retroactively.
Show answer & explanation
Answer: C
The Misstatement of Age or Gender provision is an exception to the Incontestability clause. The insurer does not cancel the policy; instead, they adjust the benefit amount to match what the premiums actually paid would have bought for the correct age or gender.
Question 11 (Chapter 3)
An insured purchased a life insurance policy on January 1, 2023. On January 1, 2024, the insured commits suicide. What is the insurer's obligation?
- A) Pay the full death benefit to the beneficiary.
- B) Pay nothing and keep all premiums.
- C) Refund the premiums paid to the beneficiary.
- D) Pay the cash value only.
Show answer & explanation
Answer: C
The Suicide Clause typically lasts for two years. If the insured commits suicide within the first two years of the policy, the insurer's only obligation is to refund the premiums paid.
Question 12 (Chapter 3)
The Entire Contract provision prevents the insurance company from doing which of the following?
- A) Increasing the premium on a term policy.
- B) Denying a claim during the first two years.
- C) Referring to documents or bylaws not physically attached to the policy.
- D) Charging interest on a policy loan.
Show answer & explanation
Answer: C
The Entire Contract provision states that the policy and the attached application constitute the whole agreement. The insurer cannot use outside documents, such as their corporate bylaws, to deny a claim unless they are part of the physical policy.
Practice Questions 13-17: Nonforfeiture, Grace Period, War Clauses and Ownership
The reduced paid-up option seen from the policy side, a death during the grace period, a war exclusion that depends on cause, and what a policyowner can do without the beneficiary's consent.
Question 13 (Chapter 3)
When a policyowner chooses the Reduced Paid-Up non-forfeiture option, the new policy is:
- A) A term policy for a shorter duration.
- B) A whole life policy with a smaller face amount.
- C) An annuity providing a lifetime income.
- D) A variable life policy with investment options.
Show answer & explanation
Answer: B
The Reduced Paid-Up option uses the cash value as a single premium to buy a whole life policy (permanent coverage) with a lower death benefit than the original policy. It will continue to grow cash value.
Question 14 (Chapter 3)
An insured dies on the 15th day of the grace period for his whole life policy. The premium was $200 and the death benefit was $50,000. How much will the insurer pay the beneficiary?
- A) Nothing, because the premium was not paid by the due date.
- B) $49,800
- C) $50,000
- D) $50,200
Show answer & explanation
Answer: B
The grace period (typically 30 or 31 days) keeps the policy in force even if the premium is unpaid. If the insured dies during this window, the insurer pays the death benefit but subtracts the overdue premium ($50,000 - $200 = $49,800).
Question 15 (Chapter 3)
An insured has a life insurance policy with a 'Results' War Exclusion. If the insured is a civilian who dies of natural causes while visiting a country currently at war, how will the insurer respond?
- A) The claim will be denied because the insured was in a war zone.
- B) The insurer will pay the full death benefit.
- C) The insurer will only refund the premiums paid.
- D) The insurer will pay the cash value only.
Show answer & explanation
Answer: B
A 'Results' War Exclusion only denies the claim if the death is a direct result of war. Since the insured died of natural causes, the exclusion does not apply. A 'Status' clause would have denied the claim simply because the insured was in the military during wartime, regardless of the cause of death.
Question 16 (Chapter 3)
Under the 'Owner's Rights' provision, which of the following can the policyowner do WITHOUT the beneficiary's consent, assuming the beneficiary is revocable?
- A) Change the beneficiary.
- B) Take a policy loan.
- C) Assign the policy to a bank.
- D) All of the above.
Show answer & explanation
Answer: D
If a beneficiary is revocable, they have no vested interest in the policy while the insured is alive. The policyowner retains all rights, including changing the beneficiary, taking loans, and assigning the policy. If the beneficiary were irrevocable, their consent would be required for these actions.
Question 17 (Chapter 3)
Laura has a life insurance policy with an Accidental Death and Dismemberment (AD&D) rider. She was involved in a severe car accident, resulting in the loss of her right arm and permanent blindness in one eye. What benefit can she expect from her AD&D rider?
- A) Only the principal sum for death, as dismemberment is not covered.
- B) No benefit, as the rider only applies to accidental death.
- C) The full death benefit of her base life insurance policy.
- D) A percentage of the principal sum, known as the capital sum, for her dismemberment and loss of sight.
Show answer & explanation
Answer: D
An Accidental Death and Dismemberment (AD&D) rider provides benefits not only for accidental death (principal sum) but also for specific types of dismemberment or loss of sight due to an accident. These dismemberment benefits are typically a percentage of the principal sum, known as the capital sum. The full death benefit of the base policy would only be paid upon her death, not for dismemberment.
The Mistakes That Cost Marks
Mixing up the lapse options. Reduced paid-up uses the cash value as a single premium for a smaller, permanent, fully paid policy. Extended term keeps the original face amount for a limited time. Cash surrender ends the policy. Automatic premium loan is a way to prevent a lapse, not an option chosen afterwards.
Forgetting what the grace period does. The policy stays in force while the premium is overdue, so a death inside the grace period is paid, less the unpaid premium. It is not the contestable period, the free-look period or reinstatement.
Getting the tax rule backwards. Dividends are generally a return of premium and are not taxed, but interest earned on dividends left with the insurer is taxed as ordinary income when it is credited. On a surrender, only the part of the cash value above the premiums paid is taxed.
Reading a misstatement of age or gender as grounds to deny. It is an exception to incontestability. The insurer does not cancel the policy; it adjusts the benefit to what the premiums paid would have bought for the correct age or gender.
Confusing war clauses. A results clause denies a claim only when the death results from war, while a status clause denies it because the insured was in the military in wartime. A civilian who dies of natural causes is not caught by a results clause.
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 neighboring blocks of the life exam have their own sets: life insurance policy types, underwriting, policy delivery and retirement concepts and Kansas life insurance law. To see how these 15 items fit, read how many questions the exam has.
Section weights come from Pearson's Kansas content outline (publication 121703, effective March 1, 2025). Read October 2026.
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