ARIZONA LIFE INSURANCE STUDY GUIDE 2026 QUESTIONS
AND SOLUTIONS RATED A+
✔✔Which two terms are associated directly with the way an annuity is funded?
a. Renewable or convertible
b. Single payment or periodic payments
c. Immediate or deferred
d. Increasing or decreasing - ✔✔b. Single payment or periodic payments
✔✔An insured decides to surrender his $100,000 Whole Life policy. The premiums paid
into the policy added up to $15,000. At policy surrender, the cash surrender value was
$18,000. What part of the surrender value would be income taxable?
a.$50,000
b.$15,000
c.$18,000
d.$3,000 - ✔✔d.$3,000
✔✔What is the purpose of a conditional receipt?
a.It guarantees that a policy will be issued in the amount applied for.
b.It is intended to provide coverage on a date prior to the policy issue.
c.It serves as proof that the applicant has been determined insurable.
d.It is given only to applicants who fully prepay the premium. - ✔✔b.It is intended to
provide coverage on a date prior to the policy issue
✔✔When the insured selects the extended term nonforfeiture option, the cash value will
be used to purchase term insurance with what face amount?
a.Equal to the original policy for as long as the cash values will purchase.
b.In lesser amounts for the remaining policy term of age 100.
c.The same as the original policy minus the cash value
d.Equal to the cash value surrendered from the policy - ✔✔a.Equal to the original policy
for as long as the cash values will purchase.
✔✔In Arizona, the grace period on a group life insurance policy applies to every
premium payment EXCEPT
a.The first of the year.
b.The first.
c.The last before renewal.
d.The last of the year. - ✔✔b.The first.
✔✔Which of the following is the basic source of information used by the company in the
risk selection process?
a.Warranty
b.Agent's report
c. Consumer report
, d. Application - ✔✔d. Application
✔✔Which of the following is true about the CAN-SPAM Act?
a.It regulates the frequency of sales-related phone calls that a company can make
within a given period of time.
b.It protects the right of companies to send advertisements to consumers.
c.It protects the right of charities to solicit donations from potential donors.
d.It protects consumers from receiving unwanted solicitations from companies. - ✔✔d.It
protects consumers from receiving unwanted solicitations from companies
✔✔What license or licenses are required to sell variable annuities?
a.Only a securities license
b. Both a life insurance license and a securities license
c.Only a life insurance license
d.No license is required - ✔✔b. Both a life insurance license and a securities license
✔✔What is the minimum age for a person to obtain a life insurance on him- or herself? -
✔✔15
✔✔Which of the following best describes a bail-out provision?
a.It allows the owner to receive a higher interest rate at certain timeframe.
b.It waives the surrender charge for the annuitants confined to a long-term care facility.
c.It allows the owner to surrender the annuity without a charge.
d. It decreases the annuity surrender value. - ✔✔c. It allows the owner to surrender the
annuity without a charge
✔✔In order to qualify for conversion from a group life policy that has been terminated to
an individual policy of the same coverage, a person must have been insured under the
group plan for how many years? - ✔✔5 years
✔✔If a beneficiary is NOT named for annuity benefits, to which entity will the benefit be
paid? - ✔✔The annuitant's estate
✔✔Which of the following are generally NOT considered when underwriting group
insurance?
a.The nature of the group
b.The insureds' medical history
c.The group's past claim experience
d. The size of the group - ✔✔b. The insured's medical history
✔✔Death benefits payable to a beneficiary under a life insurance policy are generally
a.Subject to income taxation by the Federal Government.
b.Exempt from income taxation if over $10,000.
c.Not subject to income taxation by the Federal Government.
AND SOLUTIONS RATED A+
✔✔Which two terms are associated directly with the way an annuity is funded?
a. Renewable or convertible
b. Single payment or periodic payments
c. Immediate or deferred
d. Increasing or decreasing - ✔✔b. Single payment or periodic payments
✔✔An insured decides to surrender his $100,000 Whole Life policy. The premiums paid
into the policy added up to $15,000. At policy surrender, the cash surrender value was
$18,000. What part of the surrender value would be income taxable?
a.$50,000
b.$15,000
c.$18,000
d.$3,000 - ✔✔d.$3,000
✔✔What is the purpose of a conditional receipt?
a.It guarantees that a policy will be issued in the amount applied for.
b.It is intended to provide coverage on a date prior to the policy issue.
c.It serves as proof that the applicant has been determined insurable.
d.It is given only to applicants who fully prepay the premium. - ✔✔b.It is intended to
provide coverage on a date prior to the policy issue
✔✔When the insured selects the extended term nonforfeiture option, the cash value will
be used to purchase term insurance with what face amount?
a.Equal to the original policy for as long as the cash values will purchase.
b.In lesser amounts for the remaining policy term of age 100.
c.The same as the original policy minus the cash value
d.Equal to the cash value surrendered from the policy - ✔✔a.Equal to the original policy
for as long as the cash values will purchase.
✔✔In Arizona, the grace period on a group life insurance policy applies to every
premium payment EXCEPT
a.The first of the year.
b.The first.
c.The last before renewal.
d.The last of the year. - ✔✔b.The first.
✔✔Which of the following is the basic source of information used by the company in the
risk selection process?
a.Warranty
b.Agent's report
c. Consumer report
, d. Application - ✔✔d. Application
✔✔Which of the following is true about the CAN-SPAM Act?
a.It regulates the frequency of sales-related phone calls that a company can make
within a given period of time.
b.It protects the right of companies to send advertisements to consumers.
c.It protects the right of charities to solicit donations from potential donors.
d.It protects consumers from receiving unwanted solicitations from companies. - ✔✔d.It
protects consumers from receiving unwanted solicitations from companies
✔✔What license or licenses are required to sell variable annuities?
a.Only a securities license
b. Both a life insurance license and a securities license
c.Only a life insurance license
d.No license is required - ✔✔b. Both a life insurance license and a securities license
✔✔What is the minimum age for a person to obtain a life insurance on him- or herself? -
✔✔15
✔✔Which of the following best describes a bail-out provision?
a.It allows the owner to receive a higher interest rate at certain timeframe.
b.It waives the surrender charge for the annuitants confined to a long-term care facility.
c.It allows the owner to surrender the annuity without a charge.
d. It decreases the annuity surrender value. - ✔✔c. It allows the owner to surrender the
annuity without a charge
✔✔In order to qualify for conversion from a group life policy that has been terminated to
an individual policy of the same coverage, a person must have been insured under the
group plan for how many years? - ✔✔5 years
✔✔If a beneficiary is NOT named for annuity benefits, to which entity will the benefit be
paid? - ✔✔The annuitant's estate
✔✔Which of the following are generally NOT considered when underwriting group
insurance?
a.The nature of the group
b.The insureds' medical history
c.The group's past claim experience
d. The size of the group - ✔✔b. The insured's medical history
✔✔Death benefits payable to a beneficiary under a life insurance policy are generally
a.Subject to income taxation by the Federal Government.
b.Exempt from income taxation if over $10,000.
c.Not subject to income taxation by the Federal Government.
