AZ Life Insurance Exam Prep Study Guide with answers

AZ Life Insurance Exam Prep Study Guide with answers

A |Contingent |Beneficiary |has |the |__________ |right |to |collect |an |Insured's |death |benefit. |- |correct
|answer |--Secondary




What |does |the |Producer |Licensing |Model |Act |(PLMA) |provide?



-A |uniform |set |of |insurance |regulations |

-Disability |income

-A |double |payout

-Private |Life |Maturity |Assets |- |correct |answer |--A |uniform |set |of |insurance |regulations



All |but |which |of |the |following |are |true |about |Whole |life |insurance |policies?



-They |are |a |traditional |type |of |life |insurance |policy

-They |are |more |restrictive |than |adjustable |policies |

-They |are |known |for |their |very |flexible |payment |terms

-Each |premium |payment |is |the |same |

-It |is |not |easy |to |change |the |face |amount |- |correct |answer |--They |are |known |for |their |very |flexible
|payment |terms




A |life |insurance |Policy |is |a(n) |__________________ |that |requires |the |Insurer |to |pay |the |Death
|Benefit |of |the |policy |to |the |policy |Beneficiary |when |the |insured |dies. |




-Annuity

-Underwriting |

-Promise

-Contract |- |correct |answer |--Contract

,Rachel |is |the |Beneficiary |of |a |life |insurance |policy. |The |insured |has |passed |away. |She |reviews |the
|various |payout |settlement |options. |Rachel |chooses |the |option |that |operates |like |an |annuity. |What

|option |did |she |choose |for |the |payout?




-Periodic |annuitized |payout

-Fixed |period |installments

-Fixed |amount |installments

-Life |Income |- |correct |answer |--Life |Income



Aaron |wants |to |buy |an |insurance |policy |and |serve |as |the |Beneficiary |in |the |event |that |his |daughter
|Cheryl |passes |away. |What |type |of |policy |will |Aaron |purchase?




-First-party |policy

-Third-party |policy

-Second-party |policy |

-Indirect |policy

-None |of |the |above |- |correct |answer |--Third-party |policy



The |premium |for |a |Whole |life |policy |is |usually |________________ |the |premium |of |a |Term |life
|policy:




-Less |than

-The |same |as |

-Greater |than |

-Half |the |cost |of |

-One-third |of |- |correct |answer |--Greater |than



With |a |Fixed |Installment |Settlement |option:



-The |payout |is |distributed |through |fixed |level |installment |payments |over |a |specified |time |period

,-It |is |like |an |annuity

-The |proceeds |are |paid |out |monthly |from |the |face |amount |and |interest

-The |interest |is |paid |out |and |the |face |amount |is |paid |out |later |- |correct |answer |--The |payout |is
|distributed |and |fixed |and |equal |installment |payments |over |a |specified |time |period




What |is |the |term |that |relates |to |the |amount |of |money |that |an |Insured |is |entitled |to |withdraw
|from |an |annuity?




-Vesting

-Build |up |

-Defined |benefit |

-Single |Premium |Deferred |Annuity |(SPDA) |- |correct |answer |--Vesting



Edmond |suffered |from |a |kidney |condition |that |is |controlled |with |medical |treatment. |He |wants |to
|purchase |a |life |insurance |policy. |His |pre-existing |condition |prevents |him |from |getting |a |policy.




-True

-False |- |correct |answer |--False



All |but |which |of |the |following |are |true |about |having |Sole |Proprietorship |within |a |life |insurance
|policy?




-There |is |usually |a |smooth |transfer |of |a |business |to |the |beneficiary |upon |the |death |of |the |business
|owner.



-A |sole |proprietor |has |special |needs |and |risks |with |respect |to |life |coverage.

-There |are |considerable |costs |when |transitioning |from |a |dead |business |owner |to |their |beneficiary.

-When |a |sole |proprietor |dies, |so |does |their |business. |- |correct |answer |--There |is |usually |a |smooth
|transfer |of |a |business |to |the |beneficiary |upon |the |death |of |the |business |owner.




What |type |of |Universal |life |policy |offers |a |Policyholder |the |ability |to |increase |the |Cash |Value |of |the
|policy |based |on |changes |in |the |stock |index?

, -Equity-Indexed |Universal |

-Equity |Interest |

-Current |assumption

-Excess |Interest |- |correct |answer |--Equity-Indexed |Universal



Which |of |the |following |is |incorrect |about |the |taxation |of |an |individual's |life |insurance |Policy?



-Beneficiaries |typically |do |not |pay |taxes |on |the |Death |Benefit

-Premiums |are |deductible |when |the |policy |benefits |are |paid |out

-Premiums |are |generally |not |tax-deductible |in |the |year |paid

-None |of |the |above |- |correct |answer |--Premiums |are |deductible |when |the |policy |benefits |are |paid
|out




Jerry |wants |to |purchase |a |life |insurance |policy, |but |is |worried |that |his |failing |hip |will |render |him
|disabled |and |unable |to |pay |the |policy |Premiums. |What |option |could |you |suggest |to |Jerry?




-Disability |Forgiveness

-a |Qualified |policy

-a |Non-Qualified |policy

-Do |not |purchase |life |insurance

-a |Waiver |of |Premium |Rider |- |correct |answer |--a |Waiver |of |Premium |Rider



Which |of |the |following |functions |does |an |Underwriter |NOT |perform?



-the |Evaluation |of |Risk

-the |Review |of |Medical |Histories

-the |Selling |of |life |Policies

-the |Determination |of |the |Premium |Payment |amount(s) |- |correct |answer |--Sell |life |policies