17 Free Kansas Life & Health Practice Questions: Life Underwriting, Policy Delivery and Retirement Concepts (2026)
How to Use This Underwriting and Delivery Set
Sections III and IV of Pearson's Kansas outline cover completing the application, underwriting and delivering the policy, plus retirement and other insurance concepts: 12 plus 8, or 20 of the 140 scored items. The questions follow a policy from the application desk to the doorstep: what a producer may and may not do with the form, what underwriters rely on, what must happen at delivery, and the tax and contract ideas that sit behind it.
These 17 questions come from LanePrep's Kansas Life & Health quiz bank and follow three areas: the application, delivery and underwriting tools, the tax and planning rules, and the contract concepts every producer must be able to apply.
Ask who must act, and when. Many questions here are procedural: the applicant, the producer or the insurer has one specific duty, and the wrong options hand it to someone else.
Practice Questions 1-6: Applications, Delivery, Underwriting Tools and the MEC Test
What a producer does with an error on an application, what must be collected at delivery when no premium was paid, and what the underwriting tools and false statements do to coverage. The block also introduces the 7-pay test behind the modified endowment contract.
Question 1 (Chapter 4)
While reviewing a life insurance application after the client has left the office, a Kansas producer notices they forgot to fill in the applicant's middle name. What is the correct course of action?
- A) Fill it in and initial it on behalf of the client.
- B) Use white-out to clear the section and re-type the full name.
- C) Leave it blank and let the home office underwriter call the client.
- D) Meet with the applicant to have them provide the information and initial the change.
Show answer & explanation
Answer: D
Producers should never change an application without the applicant present. The correct procedure is to have the applicant provide the missing info or correct the error, then initial and date the change to maintain the integrity of the legal document.
Question 2 (Chapter 4)
A producer is delivering a life insurance policy to a client. The client did not pay the initial premium when the application was submitted. What must the producer collect at the time of delivery?
- A) The initial premium and a signed Statement of Good Health.
- B) A copy of the client's most recent tax return.
- C) The initial premium and a new application.
- D) A signed waiver of the contestable period.
Show answer & explanation
Answer: A
If the premium is not paid at the time of application, the policy is not in force. Upon delivery, the producer must collect the premium and a Statement of Good Health to ensure the insured's condition hasn't worsened since the application.
Question 3 (Chapter 4)
A policy that fails the '7-pay test' is classified by the IRS as:
- A) A Variable Life Policy.
- B) A Term Life Extension.
- C) A Qualified Retirement Plan.
- D) A Modified Endowment Contract (MEC).
Show answer & explanation
Answer: D
If a policy is funded too heavily in the first seven years (exceeding the 7-pay test), it becomes a MEC. MECs lose the tax-free status of policy loans and withdrawals (they are taxed LIFO and may face a 10% penalty before age 59 1/2).
Question 4 (Chapter 4)
When an applicant signs an HIV Consent form in Kansas, they are authorizing the insurer to:
- A) Perform a blood test for HIV and share positive results with the MIB and the applicant's physician.
- B) Share the test results with the applicant's employer.
- C) Decline the applicant without stating a reason.
- D) Charge a 'lifestyle' surcharge on the premium.
Show answer & explanation
Answer: A
HIV consent forms inform the applicant about the test, its purpose, and how the results will be confidentially shared with the Medical Information Bureau (MIB) and the applicant's designated doctor if results are positive.
Question 5 (Chapter 4)
Which of the following is true regarding the Medical Information Bureau (MIB)?
- A) It is a non-profit trade association that maintains medical impairment information on applicants for member insurers.
- B) It is a government agency that regulates health insurance.
- C) It provides full medical records to any producer who requests them.
- D) It determines whether a specific applicant should be accepted or declined.
Show answer & explanation
Answer: A
The MIB is a clearinghouse for medical information reported by member insurers. It helps prevent fraud and concealment by flagging inconsistencies in applications, but it does not make the final underwriting decision.
Question 6 (Chapter 4)
During an application for life insurance in Lawrence, the applicant states they have never been treated for high blood pressure. In reality, they were prescribed medication for hypertension six months ago. Because this information would have caused the insurer to charge a higher premium, it is considered:
- A) A breach of warranty
- B) An aleatory omission
- C) A conditional representation
- D) A material misrepresentation
Show answer & explanation
Answer: D
A representation is a statement believed to be true. If it is false and 'material' (meaning the insurer would have acted differently if they knew the truth), it is a material misrepresentation, which can void the contract.
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Practice Questions 7-12: Taxes, Needs Analysis, Contract Law, Privacy and Retirement Plans
How a modified endowment contract is taxed, how the human life value approach sizes coverage, and what the Gramm-Leach-Bliley Act requires before information is shared. It also asks what a contract needs to be legal, why a nonqualified plan can favor executives and what aleatory means.
Question 7 (Chapter 4)
A client in Kansas buys a life insurance policy and pays a very large single premium that exceeds the '7-pay test' limits. What is the primary tax consequence of this policy being classified as a Modified Endowment Contract (MEC)?
- A) The death benefit becomes fully taxable
- B) The premiums are now tax-deductible
- C) Policy loans and withdrawals are taxed on a Last-In, First-Out (LIFO) basis
- D) The policy must be surrendered immediately
Show answer & explanation
Answer: C
A MEC loses the favorable 'FIFO' (First-In, First-Out) tax treatment for withdrawals. Instead, any distributions (including loans) are taxed as income first, and a 10% penalty may apply if the owner is under age 59 1/2.
Question 8 (Chapter 4)
A producer is using the 'Human Life Value' approach to determine how much life insurance a father in Dodge City needs. This approach is primarily based on:
- A) The total amount of debt the father owes
- B) The estimated funeral and burial costs
- C) The father's projected future earnings and the inflation rate
- D) The specific dollar amount needed for a child's college education
Show answer & explanation
Answer: C
The Human Life Value approach calculates the present value of the individual's future earnings to determine how much capital is needed to replace that income for the family.
Question 9 (Chapter 4)
A Kansas resident applies for a life insurance policy to cover a debt they owe to an illegal gambling ring. The insurer discovers this and denies the application. Which element of a legal contract is missing?
- A) Legal Purpose
- B) Consideration
- C) Competent Parties
- D) Adhesion
Show answer & explanation
Answer: A
For a contract to be valid, it must have a legal purpose. Insuring a debt incurred through illegal activities violates this principle.
Question 10 (Chapter 4)
A Kansas insurer wants to share a customer's non-public personal financial information with a non-affiliated third-party marketing firm. According to the Gramm-Leach-Bliley Act (GLBA), what must the insurer provide to the customer first?
- A) A verbal notification during the next phone call.
- B) A copy of the producer's background check.
- C) A clear and conspicuous notice and a reasonable opportunity to 'opt out' of the disclosure.
- D) Nothing, as long as the third party is a licensed marketing firm.
Show answer & explanation
Answer: C
The GLBA requires financial institutions to provide customers with a privacy notice and the right to 'opt out' (refuse) the sharing of their non-public personal information with non-affiliated third parties.
Question 11 (Chapter 4)
A Kansas employer wants to set up a retirement plan that allows them to selectively offer benefits to only a few key executives, without meeting the broad participation requirements of ERISA. What type of plan should they use?
- A) 401(k) Plan
- B) Defined Benefit Plan
- C) Non-qualified Deferred Compensation Plan
- D) Simplified Employee Pension (SEP) IRA
Show answer & explanation
Answer: C
Non-qualified plans do not have to meet the strict non-discrimination and participation rules of ERISA, allowing employers to favor highly compensated employees or executives. Qualified plans (A, B, D) must be offered to all eligible employees.
Question 12 (Chapter 4)
In insurance, the 'Aleatory' nature of the contract is best illustrated by which of the following scenarios?
- A) An insured pays $1,000 in premiums over 20 years and receives a $1,000 dividend.
- B) The insurer and insured negotiate the terms of the policy together.
- C) An insured pays one $50 monthly premium and then dies, resulting in a $100,000 death benefit payment.
- D) The insurer is the only party legally bound to perform.
Show answer & explanation
Answer: C
An aleatory contract is one where the values exchanged are unequal. The possibility of a small premium resulting in a large payout (or years of premiums resulting in no claim) is the hallmark of an aleatory contract.
Practice Questions 13-17: Insurable Interest, Contract Concepts and Replacement
Who may insure whose life, how an unequal exchange of values defines the contract, what the insurer gives as consideration, and which duty falls on a replacing insurer.
Question 13 (Chapter 4)
A man in Topeka buys a life insurance policy on his neighbor because he thinks the neighbor is in poor health and wants to profit from the death. The insurer denies the application. What is the reason for the denial?
- A) Lack of competent parties
- B) The neighbor did not sign the application
- C) Lack of insurable interest
- D) The premium was too high
Show answer & explanation
Answer: C
Insurable interest must exist at the time of application. Generally, you have an insurable interest in yourself, close family members, or business partners/key employees. You do not have an insurable interest in a neighbor solely for financial gain.
Question 14 (Chapter 4)
A producer in Wichita is completing a life insurance application for a client who wants to insure their spouse. The spouse is present during the meeting. Which of the following sets of signatures is required by the insurer to process the application?
- A) The producer and the applicant only.
- B) The producer and the proposed insured only.
- C) The applicant and the proposed insured only.
- D) The producer, the applicant, and the proposed insured.
Show answer & explanation
Answer: D
In a third-party ownership situation (insuring a spouse), the application must be signed by the producer (witness), the applicant (policyowner), and the proposed insured (the spouse). If the insured is a minor, a parent or guardian signs on their behalf.
Question 15 (Chapter 4)
An applicant in Salina pays a $500 annual premium for a $250,000 life insurance policy. Two months later, the insured dies in an accident. The insurer pays the $250,000 benefit. This scenario, where the values exchanged are unequal, demonstrates that the contract is:
- A) Unilateral.
- B) Adhesion.
- C) Aleatory.
- D) Conditional.
Show answer & explanation
Answer: C
An aleatory contract is one where the dollar values exchanged by the parties are unequal, and the outcome depends on chance or an uncertain event (like the timing of death).
Question 16 (Chapter 4)
A producer in Wichita is helping a client replace an existing policy. Which of the following is a duty of the REPLACING insurance company?
- A) Physically destroy the old policy once the new one is issued.
- B) Send a copy of the 'Notice Regarding Replacement' to the existing insurer.
- C) Pay the first three months of premiums on the new policy.
- D) Notify the Kansas Insurance Guaranty Association of the change.
Show answer & explanation
Answer: B
The replacing insurer is required to notify the existing insurer of the proposed replacement. This allows the existing insurer the opportunity to 'conserve' the business.
Question 17 (Chapter 4)
In the formation of a life insurance contract in Kansas, the 'Consideration' provided by the insurance company is the:
- A) Payment of the producer's commission.
- B) Promise to pay the death benefit in the event of a covered loss.
- C) Underwriting expenses incurred during the application process.
- D) Initial premium payment.
Show answer & explanation
Answer: B
Consideration is something of value exchanged by both parties. The applicant's consideration is the premium and the statements in the application; the insurer's consideration is the promise to pay the benefit.
The Mistakes That Cost Marks
Fixing an application yourself. A producer who finds a blank or an error after the client has left does not fill it in or white it out. The applicant supplies or corrects the information and initials the change.
Skipping the delivery requirements. If the first premium was not paid with the application, the policy is not in force. At delivery the producer collects the initial premium and a signed statement of good health, which confirms that the insured's health has not changed since the application.
Getting the MEC rules wrong. A policy that fails the 7-pay test is a modified endowment contract. Loans and withdrawals are taxed last-in, first-out, with a 10% penalty before age 59 1/2. The death benefit is still received income-tax free.
Misreading the privacy rule. Before sharing a customer's nonpublic personal financial information with a non-affiliated third party, the insurer must give a clear notice and a reasonable chance to opt out. A verbal mention on the next call is not enough.
Blurring the contract terms. Aleatory means unequal values are exchanged, insurable interest must exist at application, the insurer's consideration is its promise to pay, and a contract needs a legal purpose. Each has its own scenario, and the options use the other terms as bait.
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 sets cover life provisions, riders, options and exclusions and the Kansas rules a producer must know, Kansas life insurance law. To see how these 20 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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