ARIZONA LIFE INSURANCE TEST 2026 PAPER QUESTIONS
AND SOLUTIONS RATED A+
✔✔Policy face - ✔✔Usually the first page of the insurance policy. Policy number, name
of insured, policy issue date, the amount of premium, and limits on policy.
✔✔Insuring clause - ✔✔Also appears on policy face, sets outs the essential elements of
the insurance. Promise to pay for losses covered by the policy in exchange for the
premium
✔✔Conditions - ✔✔Rights and duties of both parties, provisions that apply to both the
insured and the insurer
✔✔Exclusions - ✔✔Company states what it will not do or pay for in the policy.
✔✔Rules of construction - ✔✔Help identify and establish the intent of the parties to the
contract
✔✔Utmost good faith - ✔✔Each party is entitled to rely on the representations of each
other acting in good faith with now attempts to deceive or conceal
✔✔Aleatory contract - ✔✔Performance is based upon an uncertain event
✔✔Adhesion - ✔✔Insurance company drafts the wording of the contract and the
insured simply adheres to it
✔✔Unilateral - ✔✔Only one party of the contract is legally required to do something.
✔✔Conditional contracts - ✔✔Conditions must be met to make the certain contract
legally enforceable. Ex insurance interest present in order to receive the Benefit from a
loss
✔✔Warranty - ✔✔Something that becomes parts of the contradict itself and is a
statement that is guaranteed to be true
✔✔Representation - ✔✔Statement believed to be true by the best of ones knowledge
✔✔Impersonation - ✔✔Means assuming the name and identity of another person
committing fraud (false pretenses)
✔✔Concealment - ✔✔Failure to disclose know facts
✔✔Material information - ✔✔Obtaining the correct demographics and information on the
applicant
, ✔✔Fraud - ✔✔Intentional act designed to deceive and induce another part to part with
something of value
✔✔Parol evidence rule - ✔✔Limits the impact of waiver and estoppel on contract terms
by disallowing oral evidence based on statements made before the contract was
created.
✔✔Void contract - ✔✔An agreement without legal effect
✔✔Voidable contract - ✔✔A formal agreement between two parties that may be
rendered unenforceable for a number of legal reasons
✔✔Third part ownership - ✔✔Policy owned by someone other than the insured
✔✔Adverse selection - ✔✔Exists when the group of risks insured is more likely than the
average group to experience loss
✔✔Attending physician statement - ✔✔Designed to obtain more specific information
about a particular medical problem revealed in the application
✔✔Agents statement. - ✔✔Information about proposed insureds financial status, habits,
general character, and any other risk based assumptions
✔✔Investigative consumer report - ✔✔Includes information on a consumers character,
general reputation, personal habits and mode of living that is obtained through
investigation
✔✔Medical information bureau - ✔✔Another source of information which may aid the
underwriter in determining whether or not to accept risk
✔✔Standard risk - ✔✔Reflect average exposures and fall into normal range. Standard
risk rate premiums
✔✔Substandard risk - ✔✔Reflect on above average risk of loss due to health,
occupation, habbits or other factors but still an acceptable range relatively higher
premiums
✔✔Preferred risks - ✔✔Below average risk of loss, these risks may be insured at
preferred or discounted premium rates
✔✔Declined risk - ✔✔Is one that an insurer has decided not to insure. Usually does not
happen but could
AND SOLUTIONS RATED A+
✔✔Policy face - ✔✔Usually the first page of the insurance policy. Policy number, name
of insured, policy issue date, the amount of premium, and limits on policy.
✔✔Insuring clause - ✔✔Also appears on policy face, sets outs the essential elements of
the insurance. Promise to pay for losses covered by the policy in exchange for the
premium
✔✔Conditions - ✔✔Rights and duties of both parties, provisions that apply to both the
insured and the insurer
✔✔Exclusions - ✔✔Company states what it will not do or pay for in the policy.
✔✔Rules of construction - ✔✔Help identify and establish the intent of the parties to the
contract
✔✔Utmost good faith - ✔✔Each party is entitled to rely on the representations of each
other acting in good faith with now attempts to deceive or conceal
✔✔Aleatory contract - ✔✔Performance is based upon an uncertain event
✔✔Adhesion - ✔✔Insurance company drafts the wording of the contract and the
insured simply adheres to it
✔✔Unilateral - ✔✔Only one party of the contract is legally required to do something.
✔✔Conditional contracts - ✔✔Conditions must be met to make the certain contract
legally enforceable. Ex insurance interest present in order to receive the Benefit from a
loss
✔✔Warranty - ✔✔Something that becomes parts of the contradict itself and is a
statement that is guaranteed to be true
✔✔Representation - ✔✔Statement believed to be true by the best of ones knowledge
✔✔Impersonation - ✔✔Means assuming the name and identity of another person
committing fraud (false pretenses)
✔✔Concealment - ✔✔Failure to disclose know facts
✔✔Material information - ✔✔Obtaining the correct demographics and information on the
applicant
, ✔✔Fraud - ✔✔Intentional act designed to deceive and induce another part to part with
something of value
✔✔Parol evidence rule - ✔✔Limits the impact of waiver and estoppel on contract terms
by disallowing oral evidence based on statements made before the contract was
created.
✔✔Void contract - ✔✔An agreement without legal effect
✔✔Voidable contract - ✔✔A formal agreement between two parties that may be
rendered unenforceable for a number of legal reasons
✔✔Third part ownership - ✔✔Policy owned by someone other than the insured
✔✔Adverse selection - ✔✔Exists when the group of risks insured is more likely than the
average group to experience loss
✔✔Attending physician statement - ✔✔Designed to obtain more specific information
about a particular medical problem revealed in the application
✔✔Agents statement. - ✔✔Information about proposed insureds financial status, habits,
general character, and any other risk based assumptions
✔✔Investigative consumer report - ✔✔Includes information on a consumers character,
general reputation, personal habits and mode of living that is obtained through
investigation
✔✔Medical information bureau - ✔✔Another source of information which may aid the
underwriter in determining whether or not to accept risk
✔✔Standard risk - ✔✔Reflect average exposures and fall into normal range. Standard
risk rate premiums
✔✔Substandard risk - ✔✔Reflect on above average risk of loss due to health,
occupation, habbits or other factors but still an acceptable range relatively higher
premiums
✔✔Preferred risks - ✔✔Below average risk of loss, these risks may be insured at
preferred or discounted premium rates
✔✔Declined risk - ✔✔Is one that an insurer has decided not to insure. Usually does not
happen but could
