ARIZONA LIFE INSURANCE 2026 UPDATED EXAM SCRIPT
QUESTIONS AND SOLUTIONS RATED A+
✔✔Which of the following is NOT a valid contract exchange?
1. an annuity exchanged for a life insurance policy
2 an annuity exchanged for another annuity
3 a life insurance policy exchanged for another life insurance policy
4 a life insurance policy exchanged for another annuity - ✔✔an annuity exchanged for a
life insurance policy
✔✔which of these statements regarding the extended term insurance nonforfeiture
option in a life policy is accurate
evidence of insurability is required
coverage remains until death of the insured
the premium to purchase the coverage comes from the policy`s cash value
cash value will continue to grow - ✔✔the premium to purchase the coverage comes
from the policy`s cash value
✔✔a life insurance policy that includes a return of premium rider will pay the beneficiary
how much upon the insured death
total premiums paid plus the policy face amount
face amount plus interest
interest acquired plus total premiums paid
face amount minus any outstanding loan balances - ✔✔total premiums paid plus the
policy face amount
✔✔which of these is NOT considered the responsibility of a producer during the
underwriting process
collecting additional medical information if needed
promptly sending the completed application to the insurance company
,forwarding any material personal observations to the insurer
selecting the final approval date - ✔✔selecting the final approval date
✔✔which of the following is NOT guaranteed in a whole life policy
settlement options
nonforfeiture options
dividend scale
policy loan values - ✔✔dividend scale
✔✔all of these duties that a producer may be required to perform when delivering an
insurance policy EXCEPT
acquire a statement of good health signature
gather the initial premium
review policy with applicant
leave a conditional receipt with client - ✔✔leave a conditional receipt with client
✔✔laura added a children`s rider to her life insurance policy. what type of coverage was
added
level term
increasing term
decreasing term
juvenile term - ✔✔level term
✔✔what would be the disadvantage of naming a trust as a beneficiary of a life
insurance policy
trusts cannot be formed for life insurance purposes
trust administrations fees would reduce policy proceeds
trusts cannot be used if a minor is the beneficiary
,trustee must be a bank or brokerage - ✔✔trust administrations fees would reduce policy
proceeds
✔✔what does a fixed life annuity offer protection against
inflation
premature death
inadequate retirement planning
savings depletion due to longevity - ✔✔savings depletion due to longevity
✔✔a trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant
to avoid
mandatory income tax withholding on the amount transferred
paying transfer fees
paying trustee fees
ever paying income taxes on the distributions - ✔✔mandatory income tax withholding
on the amount transferred
✔✔what happens when a policy owner borrows against the cash value of his life
insurance policy
the policy proceeds would be reduced by the outstanding loan balance
no additional loans can be taken out in the future
the amount borrowed is added to the policy owners gross income for tax purposes
the interest on the loan is tax deductible - ✔✔the policy proceeds would be reduced by
the outstanding loan balance
✔✔straight whole life insurance can be accurately described in all of these statements
EXCEPT
policy protection normally expires at age 65
nonforfeiture values are available to the policy owner
provides level protection with level premiums
, cash value loans are permitted - ✔✔policy protection normally expires at age 65
✔✔which statement regarding the joint and survivor life insurance settlement options is
NOT true
age of beneficiaries plays a factor when determining the payment amounts
income continues until the last beneficiary dies
two or more beneficiaries can be paid
the amount of each installment is larger than the single life income option - ✔✔the
amount of each installment is larger than the single life income option
✔✔which statement regarding universal life insurance in correct
cash value accumulations have a guaranteed minimum interest rate
policy owner can change the face amount but not the premium
policy owner can change the premium but not the face amount
partial withdrawals cannot be made from the policy`s cash value - ✔✔cash value
accumulations have a guaranteed minimum interest rate
✔✔which of the following statements about universal life insurance in NOT true
death benefit can be increased
premiums are flexible
universal life insurance normally has a minimum guaranteed cash value for duration of
the policy
the cash value interest rate must equal or exceed a guaranteed minimum value -
✔✔universal life insurance normally has a minimum guaranteed cash value for duration
of the policy
✔✔contributions made by an employee to a qualified retirement plan are required to be
subject to income taxes
fully refundable
QUESTIONS AND SOLUTIONS RATED A+
✔✔Which of the following is NOT a valid contract exchange?
1. an annuity exchanged for a life insurance policy
2 an annuity exchanged for another annuity
3 a life insurance policy exchanged for another life insurance policy
4 a life insurance policy exchanged for another annuity - ✔✔an annuity exchanged for a
life insurance policy
✔✔which of these statements regarding the extended term insurance nonforfeiture
option in a life policy is accurate
evidence of insurability is required
coverage remains until death of the insured
the premium to purchase the coverage comes from the policy`s cash value
cash value will continue to grow - ✔✔the premium to purchase the coverage comes
from the policy`s cash value
✔✔a life insurance policy that includes a return of premium rider will pay the beneficiary
how much upon the insured death
total premiums paid plus the policy face amount
face amount plus interest
interest acquired plus total premiums paid
face amount minus any outstanding loan balances - ✔✔total premiums paid plus the
policy face amount
✔✔which of these is NOT considered the responsibility of a producer during the
underwriting process
collecting additional medical information if needed
promptly sending the completed application to the insurance company
,forwarding any material personal observations to the insurer
selecting the final approval date - ✔✔selecting the final approval date
✔✔which of the following is NOT guaranteed in a whole life policy
settlement options
nonforfeiture options
dividend scale
policy loan values - ✔✔dividend scale
✔✔all of these duties that a producer may be required to perform when delivering an
insurance policy EXCEPT
acquire a statement of good health signature
gather the initial premium
review policy with applicant
leave a conditional receipt with client - ✔✔leave a conditional receipt with client
✔✔laura added a children`s rider to her life insurance policy. what type of coverage was
added
level term
increasing term
decreasing term
juvenile term - ✔✔level term
✔✔what would be the disadvantage of naming a trust as a beneficiary of a life
insurance policy
trusts cannot be formed for life insurance purposes
trust administrations fees would reduce policy proceeds
trusts cannot be used if a minor is the beneficiary
,trustee must be a bank or brokerage - ✔✔trust administrations fees would reduce policy
proceeds
✔✔what does a fixed life annuity offer protection against
inflation
premature death
inadequate retirement planning
savings depletion due to longevity - ✔✔savings depletion due to longevity
✔✔a trustee-to-trustee transfer of rollover funds in a qualified plan allows a participant
to avoid
mandatory income tax withholding on the amount transferred
paying transfer fees
paying trustee fees
ever paying income taxes on the distributions - ✔✔mandatory income tax withholding
on the amount transferred
✔✔what happens when a policy owner borrows against the cash value of his life
insurance policy
the policy proceeds would be reduced by the outstanding loan balance
no additional loans can be taken out in the future
the amount borrowed is added to the policy owners gross income for tax purposes
the interest on the loan is tax deductible - ✔✔the policy proceeds would be reduced by
the outstanding loan balance
✔✔straight whole life insurance can be accurately described in all of these statements
EXCEPT
policy protection normally expires at age 65
nonforfeiture values are available to the policy owner
provides level protection with level premiums
, cash value loans are permitted - ✔✔policy protection normally expires at age 65
✔✔which statement regarding the joint and survivor life insurance settlement options is
NOT true
age of beneficiaries plays a factor when determining the payment amounts
income continues until the last beneficiary dies
two or more beneficiaries can be paid
the amount of each installment is larger than the single life income option - ✔✔the
amount of each installment is larger than the single life income option
✔✔which statement regarding universal life insurance in correct
cash value accumulations have a guaranteed minimum interest rate
policy owner can change the face amount but not the premium
policy owner can change the premium but not the face amount
partial withdrawals cannot be made from the policy`s cash value - ✔✔cash value
accumulations have a guaranteed minimum interest rate
✔✔which of the following statements about universal life insurance in NOT true
death benefit can be increased
premiums are flexible
universal life insurance normally has a minimum guaranteed cash value for duration of
the policy
the cash value interest rate must equal or exceed a guaranteed minimum value -
✔✔universal life insurance normally has a minimum guaranteed cash value for duration
of the policy
✔✔contributions made by an employee to a qualified retirement plan are required to be
subject to income taxes
fully refundable
