ARIZONA LIFE INSURANCE EVALUATION EXAM 2026
QUESTIONS AND SOLUTIONS RATED A+
✔✔Transfer - ✔✔Transferring the risk of loss to another party, usually an insurance
company more wiling to bear the risk.
✔✔Avoidance - ✔✔Avoiding the risk in the first place, not undertaking a chance that
can result in a chance of loss
✔✔Reduction - ✔✔When risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
✔✔Retention - ✔✔Doing nothing about the risk, people assume or retain the overall risk
✔✔Law of large numbers - ✔✔Ability to make predictions of losses in a group is based
upon the law of large numbers
✔✔Insurable interest - ✔✔Person having legitimate interest and can benefit from
preservation of the life or the property insured
✔✔Deductible - ✔✔The initial amount of a covered loss that the insured must pay In
order for insurer to pay for the remainder of the claim
✔✔Elimination period - ✔✔The number of days an insured must be disabled before
disability income benefits become payable
✔✔Co insurance - ✔✔Within a specific coverage range the insured and the insurer will
share the allowed expenses
✔✔Property insurance - ✔✔Protects the insured against the financial consequences of
the direct or consequential loss
✔✔Casualty insurance - ✔✔Protects the insured against the financial consequences of
legal liability including that for death,injury, disability or damage to real or personal
property
✔✔Life insurance - ✔✔Insurance coverage on human lives including endowments and
annuities and may include benefits based upon accidental death or benefits for disability
✔✔Annuity - ✔✔Provides guaranteed income for the life of an annuitant, protecting an
individual from the risk of living to long
, ✔✔Accident and health or sickness insurance - ✔✔Protects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
✔✔Variable life and variable annuity products - ✔✔Insurance coverage provided under
variable life insurance contracts and variable annuities. Variable carry investment risk
an require an insurance license and a securities License
✔✔Credit insurance - ✔✔Limited line of insurance protecting the insured who is usually
a creditor, if unable to repay debts or results of illness
✔✔Private commercial insurers - ✔✔Profit making insurance company
✔✔Private non commercial insurers - ✔✔Non profit service organization
✔✔U.S. Government insurers - ✔✔Special non profit insurer
✔✔Stocks insurance company - ✔✔Consists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as there is
no dividends
✔✔Non participating company - ✔✔Policy holders do not receive dividends from stock
ownership
✔✔Participating company - ✔✔Policy holders receive dividends and participate in them
✔✔Mutual insurers - ✔✔No stock holders, ownership rests with the policy holders also
known as policy holders.
✔✔Reciprocal insurers - ✔✔Are unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal is
known as a subscriber.
✔✔Fraternal insurers - ✔✔Are primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated with
that particular group
✔✔Lloyds of London - ✔✔Is not a physical insurance company but acts as a meeting
Place and services to its members who transact insurance
✔✔Reinsurers - ✔✔Make up a specialized branch of the insurance industry that insures
the insurers. This is when an insurance company transfers a portion of the risk to
another insurer.
QUESTIONS AND SOLUTIONS RATED A+
✔✔Transfer - ✔✔Transferring the risk of loss to another party, usually an insurance
company more wiling to bear the risk.
✔✔Avoidance - ✔✔Avoiding the risk in the first place, not undertaking a chance that
can result in a chance of loss
✔✔Reduction - ✔✔When risks cannot be avoided, they may be able to be reduced
Reducing the potential loss that might occur or by reducing the amount the potential
loss if it occurs
✔✔Retention - ✔✔Doing nothing about the risk, people assume or retain the overall risk
✔✔Law of large numbers - ✔✔Ability to make predictions of losses in a group is based
upon the law of large numbers
✔✔Insurable interest - ✔✔Person having legitimate interest and can benefit from
preservation of the life or the property insured
✔✔Deductible - ✔✔The initial amount of a covered loss that the insured must pay In
order for insurer to pay for the remainder of the claim
✔✔Elimination period - ✔✔The number of days an insured must be disabled before
disability income benefits become payable
✔✔Co insurance - ✔✔Within a specific coverage range the insured and the insurer will
share the allowed expenses
✔✔Property insurance - ✔✔Protects the insured against the financial consequences of
the direct or consequential loss
✔✔Casualty insurance - ✔✔Protects the insured against the financial consequences of
legal liability including that for death,injury, disability or damage to real or personal
property
✔✔Life insurance - ✔✔Insurance coverage on human lives including endowments and
annuities and may include benefits based upon accidental death or benefits for disability
✔✔Annuity - ✔✔Provides guaranteed income for the life of an annuitant, protecting an
individual from the risk of living to long
, ✔✔Accident and health or sickness insurance - ✔✔Protects the insured against
financial loss cause by sickness, bodily injury, accidental death, and may include
benefits for disability income
✔✔Variable life and variable annuity products - ✔✔Insurance coverage provided under
variable life insurance contracts and variable annuities. Variable carry investment risk
an require an insurance license and a securities License
✔✔Credit insurance - ✔✔Limited line of insurance protecting the insured who is usually
a creditor, if unable to repay debts or results of illness
✔✔Private commercial insurers - ✔✔Profit making insurance company
✔✔Private non commercial insurers - ✔✔Non profit service organization
✔✔U.S. Government insurers - ✔✔Special non profit insurer
✔✔Stocks insurance company - ✔✔Consists of stockholders also known as share
holders whip own shares in the company, this is considered non participating as there is
no dividends
✔✔Non participating company - ✔✔Policy holders do not receive dividends from stock
ownership
✔✔Participating company - ✔✔Policy holders receive dividends and participate in them
✔✔Mutual insurers - ✔✔No stock holders, ownership rests with the policy holders also
known as policy holders.
✔✔Reciprocal insurers - ✔✔Are unincorporated groups of people that provide
insurance for one another through individual indemnity agreements. Each reciprocal is
known as a subscriber.
✔✔Fraternal insurers - ✔✔Are primarily life insurance carriers that exists as social
organizations and usually engage in charitable, customed to individuals associated with
that particular group
✔✔Lloyds of London - ✔✔Is not a physical insurance company but acts as a meeting
Place and services to its members who transact insurance
✔✔Reinsurers - ✔✔Make up a specialized branch of the insurance industry that insures
the insurers. This is when an insurance company transfers a portion of the risk to
another insurer.
