Life Products & Riders
21%of exam
Underwriting & Retirement Concepts
20%of exam
UnderwritingApplication ProcessRetirement PlansContract LawTax Treatment
Health Products & Provisions
22%of exam
Social Insurance & Health Concepts
8%of exam
MedicareMedicaidCoordination Of BenefitsManaged CareCost Containment
Kansas State Law & Regulation
29%of exam
KID AuthorityUnfair Trade PracticesGuaranty AssociationLife-Specific LawHealth-Specific Law
Quick Facts
- Exam Code
- 12-KS-05
- Questions
- 154 (140 scored)
- Time Limit
- 150 minutes
- Passing Score
- 70%
- Exam Fee
- $64
- Format
- Pearson VUE CBT
- Level
- State producer license
- Blueprint
- Mar 1, 2025
Nonforfeiture Options
Cash, Reduced Paid-Up, or Extended Term
Cash: lump sum nowReduced: smaller paid-up policyExtended: same face amount
Whole Life vs Term Life
Whole Life
- Lifetime coverage
- Builds cash value
- Level premium
Term Life
- Temporary coverage
- No cash value
- Lower premium
Permanent vs temporary coverage
Life Product Picker
- Need lifetime coverage→Whole Life(Level premium)
- Want flexible premium→Universal Life(Adjustable coverage)
- Need cheapest temporary coverage→Term Life(No cash value)
- Want market-linked cash growth→Variable or VUL(Securities risk applies)
- Fund retirement tax-deferred→Deferred Annuity(Accumulation phase)
- Need income immediately→Immediate Annuity(Payout phase now)
Life Product Types
- Whole Life
- Level premium, cash value
- Universal Life
- Flexible premium, adjustable benefit
- Variable Life
- Securities-backed, cash value varies
- Variable Universal Life
- Flexible premium plus securities risk
- Term Life
- Temporary, level or decreasing
- Indexed Life
- Index-linked crediting with floor
- Limited-Pay Whole Life
- Premiums stop, coverage continues
Settlement Options
Lump, Interest, Period, Amount, or Life Income
Lump: one-time payoutInterest: insurer holds fundsLife Income: pays until death
Annuities
- Immediate Annuity
- Payout begins right away
- Deferred Annuity
- Payout starts later, accumulates
- Fixed Annuity
- Guaranteed interest rate return
- Variable Annuity
- Subaccounts, securities-based returns
- Indexed Annuity
- Index-linked with guaranteed floor
- Annuitization
- Converts value to income
Life Policy Riders
- Waiver of Premium
- Waives premium if disabled
- Guaranteed Insurability
- Buy more, no proof
- Accidental Death Benefit
- Extra payout for accidents
- LTC Rider
- Accelerates benefit for care
- Return of Premium
- Refunds premiums at term-end
- Payor Benefit
- Waives premium if payor dies
- Cost of Living Rider
- Increases benefit with inflation
Nonforfeiture & Settlement Options
- Cash Surrender
- Take cash value now
- Reduced Paid-Up
- Smaller, fully paid policy
- Extended Term
- Same face, limited time
- Lump Sum
- One-time full payout
- Interest Only
- Insurer holds, pays interest
- Fixed Period
- Income for set years
- Fixed Amount
- Set payment until exhausted
- Life Income
- Payments continue for life
Unique Contract Elements
Aleatory, Unilateral, Adhesion, and Conditional
Aleatory: unequal value exchangeUnilateral: only insurer promisesAdhesion: insurer drafted terms
Qualified vs Nonqualified Plans
Qualified Plan
- IRS approved
- ERISA rules apply
- Contribution limits apply
Nonqualified Plan
- No IRS approval
- Flexible design
- Used for executives
IRS approval status differs
Underwriting & Application
- Insurable Interest
- Required at time of application
- Field Underwriting
- Agent's initial risk screen
- MIB Report
- Prior application history check
- APS
- Attending physician's medical statement
- Risk Classification
- Standard, substandard, or preferred
- Consideration
- Premium plus completed application
Contract Law Elements
- Offer and Acceptance
- Application then policy issued
- Legal Purpose
- Contract must be lawful
- Competent Parties
- Legal capacity to contract
- Aleatory
- Unequal value exchanged
- Adhesion
- Insurer wrote, insured accepts
- Unilateral
- Only insurer makes promise
- Conditional
- Payment depends on event
Retirement & Tax Treatment
- Qualified Plan
- IRS-approved, ERISA-covered plan
- Nonqualified Plan
- No IRS approval required
- MEC
- Overfunded life, taxed as annuity
- Group Life Tax
- First $50k is tax-free
- Dividends
- Return of premium, untaxed
- 1035 Exchange
- Tax-free policy replacement
HMO vs PPO
HMO
- Network only
- PCP referral needed
- Lower cost
PPO
- Out-of-network allowed
- No referral needed
- Higher cost
Closed network vs open network
Health Plan Picker
- Want gatekeeper, lowest cost→HMO(Network only)
- Want flexible network choice→PPO(Out-of-network allowed)
- Want HMO/PPO hybrid→POS Plan(Referral optional)
- Pairing with an HSA→HDHP(High deductible required)
- Covering long custodial care→LTC Policy(ADL trigger needed)
- Replacing disabled income→DI Policy(Own-occupation definition)
Health Policy Types
- Basic Medical
- Hospital, surgical, medical expense
- Major Medical
- Broad, high-limit coverage
- HMO
- Network, primary care gatekeeper
- PPO
- Network with out-of-network option
- POS Plan
- HMO/PPO hybrid design
- HDHP
- High deductible, pairs with HSA
Grace Period vs Reinstatement
Grace Period
- Before policy lapses
- Pay late premium
- Coverage continues
Reinstatement
- After policy lapses
- May need new proof
- Restores coverage
Prevent lapse vs restore
Disability & LTC
- Individual DI
- Own-occupation income replacement
- Business Overhead Expense
- Covers costs, disabled owner
- Residual Disability
- Partial income loss benefit
- Elimination Period
- Waiting period before benefits
- LTC Levels
- Skilled, intermediate, custodial care
- LTC Trigger
- ADL loss or cognitive impairment
Mandatory Policy Provisions
- Entire Contract
- Policy plus attached application
- Incontestable Clause
- Insurer can't contest coverage
- Grace Period
- Time to pay late premium
- Reinstatement
- Restores a lapsed policy
- Free Look
- Cancel free within window
- Time Limit on Defenses
- Health version of incontestability
Health Riders & Accounts
- HSA
- Tax-advantaged, pairs with HDHP
- FSA
- Employer plan, use-it-or-lose-it
- HRA
- Employer-funded reimbursement account
- Guaranteed Insurability Rider
- Buy more, no new proof
- Future Increase Option
- Add coverage without proof
- Impairment Rider
- Excludes one named condition
Medicare Parts
A=Hospital, B=Medical, C=Advantage, D=Drugs
A: hospital staysB: doctor visitsC: private Advantage plansD: prescription drugs
Medicare vs Medicaid
Medicare
- Age or disability based
- Federal program
- Not income-tested
Medicaid
- Income based
- State/federal joint program
- Needs tested
Age-based vs need-based
Coordination & Managed Care
- COB
- Prevents duplicate claim payment
- Primary Payer
- Pays claim first
- Managed Care
- Controls cost and utilization
- Cost Containment
- Reduces unnecessary care spending
- Subrogation
- Insurer recovers from third party
- COBRA
- Continues group coverage after job loss
Kansas CE Rule
18 hours, 2 years, 3 ethics, no carryover
18 total CE hours3 required ethics hoursNo rollover to next cycle
Rebating vs Twisting
Rebating
- Illegal extra value
- Same insurer
- Inducement to buy
Twisting
- Misrepresents to replace
- Crosses insurers
- Induces policy lapse
Inducement vs replacement fraud
Kansas Compliance Picker
- Misrepresenting to replace policy→Flag as twisting(K.S.A. 40-2404)
- Offering illegal extra value→Flag as rebating(K.S.A. 40-2404(8))
- Tracking CE compliance→18 hrs per 2 years(3 ethics hours)
- Insurer becomes insolvent→KLHIGA covers claims(Guaranty association)
- Verifying producer authority→Check KID license status(Resident or nonresident)
- Client wants a refund→Apply free look(KAR 40-2-15)
Kansas Unfair Trade Practices
- Rebating
- Illegal inducement to buy
- Twisting
- Misrepresent to replace policy
- Misrepresentation
- False statement about policy
- False Advertising
- Deceptive marketing material
- Defamation
- False statement about competitor
- Boycott/Coercion/Intimidation
- Prohibited competitive pressure
- Unfair Discrimination
- Different terms, same risk class
Guaranty Association & CE
- KLHIGA
- Life/health insolvency protection fund
- CE Requirement
- 18 hours every 2 years
- Ethics CE
- 3 hours required each cycle
- Address Change
- Report within 30 days
- Exam Validity
- Scores valid for 2 years
- CE Carryover
- Excess hours do not roll
Kansas Life-Specific Law
- Policy Replacement
- KAR 40-2-12 duties apply
- Right to Return
- Free look under KAR 40-2-15
- Beneficiary Protection
- Shielded from insured's creditors
- Viatical Settlement
- Sale of a life policy
- Annuity Suitability
- KAR 40-1-53 standard applies
Kansas Health-Specific Law
- Med Supp Rules
- KAR 40-4-35 standards
- LTC Rules
- KAR 40-4-37 series
- Blanket Insurance
- K.S.A. 40-2210 group coverage
- Small Employer Act
- Group health availability law
- ACA Navigators
- Assist marketplace enrollment
- Continuation Rights
- Extends group coverage temporarily
Common Traps
Rebating vs Twisting
Rebating gives extra value ≠ Twisting misrepresents to replace
HMO vs PPO Network
HMO uses closed network ≠ PPO allows open network
Medicare vs Medicaid
Medicare is age-based ≠ Medicaid is need-based
Whole vs Universal Life
Whole has fixed premium ≠ Universal has flexible premium
Grace Period vs Reinstatement
Grace applies before lapse ≠ Reinstatement applies after lapse
Waiver vs Payor Benefit
Waiver: insured becomes disabled ≠ Payor: payor dies or disabled
Common vs Line-Specific Law
Common law covers all lines ≠ Line-specific covers one line only
Last Minute
- 1.154 questions: 140 scored + 14 pretest
- 2.150 minutes, 70% passing score
- 3.$64 fee, Pearson VUE delivery
- 4.40 of 140 = Kansas law
- 5.No prelicensing hours required
- 6.18 CE hours, 3 ethics
- 7.Scores valid for 2 years
- 8.Twisting = misrepresent to replace
- 9.Rebating = illegal extra value
- 10.HMO closed, PPO open network
- 11.Medicare age-based, Medicaid need-based
- 12.Free look = KAR 40-2-15
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